ARIZONA LIFE INSURANCE EXAM 2 FINAL
EXAM 2026 COMPREHENSIVE REVIEW GUIDE
Q&A
◉ Void contract. Answer: An agreement without legal effect
◉ Voidable contract. Answer: A formal agreement between two
parties that may be rendered unenforceable for a number of legal
reasons
◉ Third part ownership. Answer: Policy owned by someone other
than the insured
◉ Adverse selection. Answer: Exists when the group of risks insured
is more likely than the average group to experience loss
◉ Attending physician statement. Answer: Designed to obtain more
specific information about a particular medical problem revealed in
the application
◉ Agents statement.. Answer: Information about proposed insureds
financial status, habits, general character, and any other risk based
assumptions
,◉ Investigative consumer report. Answer: Includes information on a
consumers character, general reputation, personal habits and mode
of living that is obtained through investigation
◉ Medical information bureau. Answer: Another source of
information which may aid the underwriter in determining whether
or not to accept risk
◉ Standard risk. Answer: Reflect average exposures and fall into
normal range. Standard risk rate premiums
◉ Substandard risk. Answer: Reflect on above average risk of loss
due to health, occupation, habbits or other factors but still an
acceptable range relatively higher premiums
◉ Preferred risks. Answer: Below average risk of loss, these risks
may be insured at preferred or discounted premium rates
◉ Declined risk. Answer: Is one that an insurer has decided not to
insure. Usually does not happen but could
◉ Mortality table. Answer: Kept records required to produce precise
predictions
, ◉ Mortality rate. Answer: The number of deaths per 1000 people, is
taken from the mortality table and is converted Into a dollar and
cents rate
◉ Morbidity. Answer: The likelihood that a person will suffer an
accident contract a disease or otherwise require medical care
◉ Claim frequency rate. Answer: How frequently claim happen
among a a particular population
◉ Net premium. Answer: The premium without expensed loading
◉ Acquisition costs. Answer: Costs in connection with putting the
policy on the books,
◉ General overhead loading. Answer: Clerical salaries, furniture,
fixtures, rent, management salaries and so forth must be considered
when determining expenses
◉ Loading for contingency funds. Answer: Once a level premium
policy had been issued, the premium can never be increased
EXAM 2026 COMPREHENSIVE REVIEW GUIDE
Q&A
◉ Void contract. Answer: An agreement without legal effect
◉ Voidable contract. Answer: A formal agreement between two
parties that may be rendered unenforceable for a number of legal
reasons
◉ Third part ownership. Answer: Policy owned by someone other
than the insured
◉ Adverse selection. Answer: Exists when the group of risks insured
is more likely than the average group to experience loss
◉ Attending physician statement. Answer: Designed to obtain more
specific information about a particular medical problem revealed in
the application
◉ Agents statement.. Answer: Information about proposed insureds
financial status, habits, general character, and any other risk based
assumptions
,◉ Investigative consumer report. Answer: Includes information on a
consumers character, general reputation, personal habits and mode
of living that is obtained through investigation
◉ Medical information bureau. Answer: Another source of
information which may aid the underwriter in determining whether
or not to accept risk
◉ Standard risk. Answer: Reflect average exposures and fall into
normal range. Standard risk rate premiums
◉ Substandard risk. Answer: Reflect on above average risk of loss
due to health, occupation, habbits or other factors but still an
acceptable range relatively higher premiums
◉ Preferred risks. Answer: Below average risk of loss, these risks
may be insured at preferred or discounted premium rates
◉ Declined risk. Answer: Is one that an insurer has decided not to
insure. Usually does not happen but could
◉ Mortality table. Answer: Kept records required to produce precise
predictions
, ◉ Mortality rate. Answer: The number of deaths per 1000 people, is
taken from the mortality table and is converted Into a dollar and
cents rate
◉ Morbidity. Answer: The likelihood that a person will suffer an
accident contract a disease or otherwise require medical care
◉ Claim frequency rate. Answer: How frequently claim happen
among a a particular population
◉ Net premium. Answer: The premium without expensed loading
◉ Acquisition costs. Answer: Costs in connection with putting the
policy on the books,
◉ General overhead loading. Answer: Clerical salaries, furniture,
fixtures, rent, management salaries and so forth must be considered
when determining expenses
◉ Loading for contingency funds. Answer: Once a level premium
policy had been issued, the premium can never be increased
