AZ Life Insurance Exam Prep Study
Guide Latest Update 2025/2026
GRADED A+
-Secondary - correct answerA Contingent Beneficiary has the __________ right to
collect an Insured's death benefit.
-A uniform set of insurance regulations - correct answerWhat does the Producer
Licensing Model Act (PLMA) provide?
-A uniform set of insurance regulations
-Disability income
-A double payout
-Private Life Maturity Assets
-They are known for their very flexible payment terms - correct answerAll but which of
the following are true about Whole life insurance policies?
-They are a traditional type of life insurance policy
-They are more restrictive than adjustable policies
-They are known for their very flexible payment terms
-Each premium payment is the same
-It is not easy to change the face amount
-Contract - correct answerA life insurance Policy is a(n) __________________ that
requires the Insurer to pay the Death Benefit of the policy to the policy Beneficiary when
the insured dies.
-Annuity
-Underwriting
-Promise
-Contract
-Life Income - correct answerRachel is the Beneficiary of a life insurance policy. The
insured has passed away. She reviews the various payout settlement options. Rachel
chooses the option that operates like an annuity. What option did she choose for the
payout?
-Periodic annuitized payout
-Fixed period installments
,-Fixed amount installments
-Life Income
-Third-party policy - correct answerAaron wants to buy an insurance policy and serve as
the Beneficiary in the event that his daughter Cheryl passes away. What type of policy
will Aaron purchase?
-First-party policy
-Third-party policy
-Second-party policy
-Indirect policy
-None of the above
-Greater than - correct answerThe premium for a Whole life policy is usually
________________ the premium of a Term life policy:
-Less than
-The same as
-Greater than
-Half the cost of
-One-third of
-The payout is distributed and fixed and equal installment payments over a specified
time period - correct answerWith a Fixed Installment Settlement option:
-The payout is distributed through fixed level installment payments over a specified time
period
-It is like an annuity
-The proceeds are paid out monthly from the face amount and interest
-The interest is paid out and the face amount is paid out later
-Vesting - correct answerWhat is the term that relates to the amount of money that an
Insured is entitled to withdraw from an annuity?
-Vesting
-Build up
-Defined benefit
-Single Premium Deferred Annuity (SPDA)
-False - correct answerEdmond suffered from a kidney condition that is controlled with
medical treatment. He wants to purchase a life insurance policy. His pre-existing
condition prevents him from getting a policy.
-True
-False
, -There is usually a smooth transfer of a business to the beneficiary upon the death of
the business owner. - correct answerAll but which of the following are true about having
Sole Proprietorship within a life insurance policy?
-There is usually a smooth transfer of a business to the beneficiary upon the death of
the business owner.
-A sole proprietor has special needs and risks with respect to life coverage.
-There are considerable costs when transitioning from a dead business owner to their
beneficiary.
-When a sole proprietor dies, so does their business.
-Equity-Indexed Universal - correct answerWhat type of Universal life policy offers a
Policyholder the ability to increase the Cash Value of the policy based on changes in
the stock index?
-Equity-Indexed Universal
-Equity Interest
-Current assumption
-Excess Interest
-Premiums are deductible when the policy benefits are paid out - correct answerWhich
of the following is incorrect about the taxation of an individual's life insurance Policy?
-Beneficiaries typically do not pay taxes on the Death Benefit
-Premiums are deductible when the policy benefits are paid out
-Premiums are generally not tax-deductible in the year paid
-None of the above
-a Waiver of Premium Rider - correct answerJerry wants to purchase a life insurance
policy, but is worried that his failing hip will render him disabled and unable to pay the
policy Premiums. What option could you suggest to Jerry?
-Disability Forgiveness
-a Qualified policy
-a Non-Qualified policy
-Do not purchase life insurance
-a Waiver of Premium Rider
-Sell life policies - correct answerWhich of the following functions does an Underwriter
NOT perform?
-the Evaluation of Risk
-the Review of Medical Histories
-the Selling of life Policies
-the Determination of the Premium Payment amount(s)
Guide Latest Update 2025/2026
GRADED A+
-Secondary - correct answerA Contingent Beneficiary has the __________ right to
collect an Insured's death benefit.
-A uniform set of insurance regulations - correct answerWhat does the Producer
Licensing Model Act (PLMA) provide?
-A uniform set of insurance regulations
-Disability income
-A double payout
-Private Life Maturity Assets
-They are known for their very flexible payment terms - correct answerAll but which of
the following are true about Whole life insurance policies?
-They are a traditional type of life insurance policy
-They are more restrictive than adjustable policies
-They are known for their very flexible payment terms
-Each premium payment is the same
-It is not easy to change the face amount
-Contract - correct answerA life insurance Policy is a(n) __________________ that
requires the Insurer to pay the Death Benefit of the policy to the policy Beneficiary when
the insured dies.
-Annuity
-Underwriting
-Promise
-Contract
-Life Income - correct answerRachel is the Beneficiary of a life insurance policy. The
insured has passed away. She reviews the various payout settlement options. Rachel
chooses the option that operates like an annuity. What option did she choose for the
payout?
-Periodic annuitized payout
-Fixed period installments
,-Fixed amount installments
-Life Income
-Third-party policy - correct answerAaron wants to buy an insurance policy and serve as
the Beneficiary in the event that his daughter Cheryl passes away. What type of policy
will Aaron purchase?
-First-party policy
-Third-party policy
-Second-party policy
-Indirect policy
-None of the above
-Greater than - correct answerThe premium for a Whole life policy is usually
________________ the premium of a Term life policy:
-Less than
-The same as
-Greater than
-Half the cost of
-One-third of
-The payout is distributed and fixed and equal installment payments over a specified
time period - correct answerWith a Fixed Installment Settlement option:
-The payout is distributed through fixed level installment payments over a specified time
period
-It is like an annuity
-The proceeds are paid out monthly from the face amount and interest
-The interest is paid out and the face amount is paid out later
-Vesting - correct answerWhat is the term that relates to the amount of money that an
Insured is entitled to withdraw from an annuity?
-Vesting
-Build up
-Defined benefit
-Single Premium Deferred Annuity (SPDA)
-False - correct answerEdmond suffered from a kidney condition that is controlled with
medical treatment. He wants to purchase a life insurance policy. His pre-existing
condition prevents him from getting a policy.
-True
-False
, -There is usually a smooth transfer of a business to the beneficiary upon the death of
the business owner. - correct answerAll but which of the following are true about having
Sole Proprietorship within a life insurance policy?
-There is usually a smooth transfer of a business to the beneficiary upon the death of
the business owner.
-A sole proprietor has special needs and risks with respect to life coverage.
-There are considerable costs when transitioning from a dead business owner to their
beneficiary.
-When a sole proprietor dies, so does their business.
-Equity-Indexed Universal - correct answerWhat type of Universal life policy offers a
Policyholder the ability to increase the Cash Value of the policy based on changes in
the stock index?
-Equity-Indexed Universal
-Equity Interest
-Current assumption
-Excess Interest
-Premiums are deductible when the policy benefits are paid out - correct answerWhich
of the following is incorrect about the taxation of an individual's life insurance Policy?
-Beneficiaries typically do not pay taxes on the Death Benefit
-Premiums are deductible when the policy benefits are paid out
-Premiums are generally not tax-deductible in the year paid
-None of the above
-a Waiver of Premium Rider - correct answerJerry wants to purchase a life insurance
policy, but is worried that his failing hip will render him disabled and unable to pay the
policy Premiums. What option could you suggest to Jerry?
-Disability Forgiveness
-a Qualified policy
-a Non-Qualified policy
-Do not purchase life insurance
-a Waiver of Premium Rider
-Sell life policies - correct answerWhich of the following functions does an Underwriter
NOT perform?
-the Evaluation of Risk
-the Review of Medical Histories
-the Selling of life Policies
-the Determination of the Premium Payment amount(s)
