Arizona Life & Health Insurance Final Exam –
Latest Exam Prep 2025/2026 | Practice Test &
Study Guide
Which of these is true regarding the exchange of consideration among parties involved
in an insurance contract? - correct answerCan be unequal
The premiums paid by an employer for his employee's group life insurance are usually
considered to be? - correct answerTax-deductible to the employer
Kevin has an existing life insurance policy and assigns it to another insurer for a new
contract. How would this transaction be treated for tax purposes? - correct answerAs a
section 1035 exchange
Which of these is NOT a common life insurance nonforfeiture option? - correct
answerLife income annuity
Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is
still able to reside in her home while receiving primary care, as opposed to moving into
a nursing home. All of the following long-term benefits encourage home health care
EXCEPT? - correct answerCustodial Care
An accident and health insurer has just received written proof of loss from one of its
insurers. The insured must now wait 60 days before? - correct answerBringing legal
action against the insurer
Health care costs can be better controlled by utilizing pre-admission testing. Pre-
admission testing can reduce the? - correct answerLength of hospitalization
The "Use ir or Lose it" rule applies to - correct answerFlexible Savings Account
fee-for-service is a method of administering health insurance benefit payments in which
- correct answerThe cost of each service is scheduled
Use of XYZ Insurance Company brochures, business cards, and rating guides is an
example of? - correct answerApparent Authority
A life insurance illustration showing future premiums being paid out of no guaranteed
values must disclose that? - correct answerThe policy owner may need to resume
premium payments depending on actual results
,When the court orders an insured to provide a child's health insurance, the insurer must
allow the child to be enrolled? - correct answerAt any time
Which of these statements is NOT a characteristic of the law of large numbers? -
correct answerRates can be calculated to compensate for losses
In Arizona, when personal information is collected from a source other then the accident
and health insurance applicant or public records, a notice or information practices must
be given to the applicant no later than the date of? - correct answerApplication
How does the cost for a survivorship life policy compare to the cost of combining two
separate individual life insurance policies? - correct answerSurvivorship life policy is
lower
How does a continuous premium whole life policy differ from a limited payment whole
life policy? - correct answerThe time period in which premiums will be paid
An agent's authority to bind an insurer to an insurance contract may be granted in the? -
correct answerAgent's contract and the insurance company's appointment
Which statement concerning the Entire Contact provision in an individual accident and
health insurance policy is TRUE? - correct answerThe agent doesn't have the authority
to change the policy or waive its provisions
Under the Fair Credit Reporting Act, which statement is true? - correct answerThe
consumer who was investigated must be advised that credit, insurance, or employment
was denied because of an unfavorable report.
Field underwriting by a producer? - correct answerMay result in the disclosure of
hazardous activity of the applicant.
When group benefits under COBRA have expired, a fully insured group policy can be
converted to a(n) - correct answerIndividual health policy
In a qualified retirement plan, the yearly contributions to an employee's account? -
correct answerAre restricted to maximum limits set by the IRS
The unwritten authority given to a producer to carry out necessary incidental acts of the
agency agreement is called? - correct answerImplied authority
Which provision makes the application part of the annuity contract? - correct
answerEntire Contract clause
Arizona Law require the Human Immunodeficiency Virus (HIV) consent form to? -
correct answerDisclose the types of individuals or organizations that may receive a copy
of the test results
, Under which marketing system do insurers solicit customers by mass media advertising
and mail without their services of an agent? - correct answerDirect Response
A policy owner has just borrowed from a life insurance policy's cash value. Which of
these statements is true? - correct answerIn the event of death, the loan amount is
deducted from the policy proceeds
According to federal fraud and false statement regulation, what is required for a
prohibited person to transact insurance business in this state? - correct answerWritten
consent from the state insurance regulatory agency
Employer-paid qualifies long-term care insurance premiums are typically? - correct
answerExcluded from the employee's gross income
When replacing a life insurance policy, which of the following is advisable? - correct
answerWait until the new policy Is issued and deliver before surrendering existing policy
Which of these may NOT be deducted from premium payments or the cash value of a
variable life insurance policy? - correct answerFederal premium taxes
A policy owner pays the first annual premium for a $50,000 Life Insurance policy and
dies one month after the policy effective fate. Which of these statements is normally
true? - correct answerBeneficiary receives $50,000 income tax-free
A life policy that has premiums that are lower than normal during the early years is
called? - correct answerModified Life
Which life insurance settlement option pays a stated monthly benefit until both principal
and interest are exhausted? - correct answerFixed amount installment option
What type of doctor-ordered care assists an individual with performing basic daily
activists such as bathing, dressing, eating? - correct answerCustodial Care
Which of these occurrences could improve an insurer's ability to reduce premiums? -
correct answerRate of earnings on investments increase
An insured covered under a Disability Income policy is disabled and collecting benefits
for a period of two months. He returns to work and is again disabled from the same
cause, whereupon benefits continue to be paid. This is an example of which of the
following? - correct answerRecurrent disability
A life annuity with a period certain is characterized as? - correct answerGuaranteeing
benefit payments for a stated minimum period of time
Latest Exam Prep 2025/2026 | Practice Test &
Study Guide
Which of these is true regarding the exchange of consideration among parties involved
in an insurance contract? - correct answerCan be unequal
The premiums paid by an employer for his employee's group life insurance are usually
considered to be? - correct answerTax-deductible to the employer
Kevin has an existing life insurance policy and assigns it to another insurer for a new
contract. How would this transaction be treated for tax purposes? - correct answerAs a
section 1035 exchange
Which of these is NOT a common life insurance nonforfeiture option? - correct
answerLife income annuity
Linda is covered with long-term care insurance and has early-stage Alzheimer's. She is
still able to reside in her home while receiving primary care, as opposed to moving into
a nursing home. All of the following long-term benefits encourage home health care
EXCEPT? - correct answerCustodial Care
An accident and health insurer has just received written proof of loss from one of its
insurers. The insured must now wait 60 days before? - correct answerBringing legal
action against the insurer
Health care costs can be better controlled by utilizing pre-admission testing. Pre-
admission testing can reduce the? - correct answerLength of hospitalization
The "Use ir or Lose it" rule applies to - correct answerFlexible Savings Account
fee-for-service is a method of administering health insurance benefit payments in which
- correct answerThe cost of each service is scheduled
Use of XYZ Insurance Company brochures, business cards, and rating guides is an
example of? - correct answerApparent Authority
A life insurance illustration showing future premiums being paid out of no guaranteed
values must disclose that? - correct answerThe policy owner may need to resume
premium payments depending on actual results
,When the court orders an insured to provide a child's health insurance, the insurer must
allow the child to be enrolled? - correct answerAt any time
Which of these statements is NOT a characteristic of the law of large numbers? -
correct answerRates can be calculated to compensate for losses
In Arizona, when personal information is collected from a source other then the accident
and health insurance applicant or public records, a notice or information practices must
be given to the applicant no later than the date of? - correct answerApplication
How does the cost for a survivorship life policy compare to the cost of combining two
separate individual life insurance policies? - correct answerSurvivorship life policy is
lower
How does a continuous premium whole life policy differ from a limited payment whole
life policy? - correct answerThe time period in which premiums will be paid
An agent's authority to bind an insurer to an insurance contract may be granted in the? -
correct answerAgent's contract and the insurance company's appointment
Which statement concerning the Entire Contact provision in an individual accident and
health insurance policy is TRUE? - correct answerThe agent doesn't have the authority
to change the policy or waive its provisions
Under the Fair Credit Reporting Act, which statement is true? - correct answerThe
consumer who was investigated must be advised that credit, insurance, or employment
was denied because of an unfavorable report.
Field underwriting by a producer? - correct answerMay result in the disclosure of
hazardous activity of the applicant.
When group benefits under COBRA have expired, a fully insured group policy can be
converted to a(n) - correct answerIndividual health policy
In a qualified retirement plan, the yearly contributions to an employee's account? -
correct answerAre restricted to maximum limits set by the IRS
The unwritten authority given to a producer to carry out necessary incidental acts of the
agency agreement is called? - correct answerImplied authority
Which provision makes the application part of the annuity contract? - correct
answerEntire Contract clause
Arizona Law require the Human Immunodeficiency Virus (HIV) consent form to? -
correct answerDisclose the types of individuals or organizations that may receive a copy
of the test results
, Under which marketing system do insurers solicit customers by mass media advertising
and mail without their services of an agent? - correct answerDirect Response
A policy owner has just borrowed from a life insurance policy's cash value. Which of
these statements is true? - correct answerIn the event of death, the loan amount is
deducted from the policy proceeds
According to federal fraud and false statement regulation, what is required for a
prohibited person to transact insurance business in this state? - correct answerWritten
consent from the state insurance regulatory agency
Employer-paid qualifies long-term care insurance premiums are typically? - correct
answerExcluded from the employee's gross income
When replacing a life insurance policy, which of the following is advisable? - correct
answerWait until the new policy Is issued and deliver before surrendering existing policy
Which of these may NOT be deducted from premium payments or the cash value of a
variable life insurance policy? - correct answerFederal premium taxes
A policy owner pays the first annual premium for a $50,000 Life Insurance policy and
dies one month after the policy effective fate. Which of these statements is normally
true? - correct answerBeneficiary receives $50,000 income tax-free
A life policy that has premiums that are lower than normal during the early years is
called? - correct answerModified Life
Which life insurance settlement option pays a stated monthly benefit until both principal
and interest are exhausted? - correct answerFixed amount installment option
What type of doctor-ordered care assists an individual with performing basic daily
activists such as bathing, dressing, eating? - correct answerCustodial Care
Which of these occurrences could improve an insurer's ability to reduce premiums? -
correct answerRate of earnings on investments increase
An insured covered under a Disability Income policy is disabled and collecting benefits
for a period of two months. He returns to work and is again disabled from the same
cause, whereupon benefits continue to be paid. This is an example of which of the
following? - correct answerRecurrent disability
A life annuity with a period certain is characterized as? - correct answerGuaranteeing
benefit payments for a stated minimum period of time
