Arizona Life Insurance Practice Exam Free - 2026

• A. Age 21 and a college degree
• B. Be at least 18, submit the application and fees, pass the examination (or be exempt), submit fingerprints and document lawful presence; a business entity must designate a licensed producer responsible for compliance
• C. Complete 20 hours of prelicensing education
• D. Post a $10,000 surety bond

Correct answer: B. Be at least 18, submit the application and fees, pass the examination (or be exempt), submit fingerprints and document lawful presence; a business entity must designate a licensed producer responsible for compliance

Explanation: An individual applying for an Arizona resident producer license must be at least 18, submit the application with the fees prescribed under A.R.S. 20-167, pass the examination within the year before applying unless exempt, and submit fingerprints for a criminal records check. A business entity must designate a licensed producer responsible for the entity's compliance. Arizona requires no prelicensing education. State law also requires documentation of lawful presence in the United States before a license is issued. See A.R.S. 20-284, 20-285, 41-1080.

• A. Nothing; the director tracks addresses through NIPR
• B. Report the change at her next renewal
• C. Report within 90 days
• D. Report the changes to the director within 30 days

Correct answer: D. Report the changes to the director within 30 days

Explanation: Arizona producers are licensed for one or more of the lines of authority listed in the statute, and a licensee must report any change of residence, business address, telephone number or email address, and changes in a business entity's information, to the director within 30 days. See A.R.S. 20-286.

• A. Notify the director on the prescribed form before using the assumed name
• B. Nothing; assumed names are unregulated
• C. A separate business entity license
• D. Approval from the Corporation Commission only

Correct answer: A. Notify the director on the prescribed form before using the assumed name

Explanation: A producer doing business under any name other than the licensee's legal name must notify the director, on the director's form, before using the assumed name. The license itself is not changed by the assumed name, and the licensee remains responsible for business transacted under it. See A.R.S. 20-297.

• A. The license is revoked and must be reapplied for
• B. The license continues with no changes to deadlines
• C. On written request the license is placed on inactive status; the licensee may not sell, solicit or negotiate while inactive but may receive renewal commissions on earlier sales, and renewal and continuing education deadlines are extended by the days of active service
• D. The license is transferred to a colleague

Correct answer: C. On written request the license is placed on inactive status; the licensee may not sell, solicit or negotiate while inactive but may receive renewal commissions on earlier sales, and renewal and continuing education deadlines are extended by the days of active service

Explanation: A licensee or applicant called to active military service may ask the director in writing to place the license or application on inactive status, giving the name, license number and the date service begins. While inactive, the licensee may not sell, solicit or negotiate insurance but may receive renewal or other deferred commissions on business written while active. Deadlines for renewal fees, renewal requirements and continuing education are extended by the number of days of active service, documented with the renewal application. Periodic and routine service as a reservist is not active military service. See A.R.S. 20-289.01.

• A. A beneficiary that can be changed only with the beneficiary's consent
• B. A beneficiary that the insurer can remove if premiums go unpaid
• C. A beneficiary that the policyowner can change at any time
• D. A beneficiary that may revoke the policy's settlement option

Correct answer: C. A beneficiary that the policyowner can change at any time

Explanation: A revocable beneficiary can be changed by the policyowner at any time without the beneficiary's consent. This is the most common type of beneficiary designation.

• A. A beneficiary that the policyowner may change at any time without notice
• B. A beneficiary that must be appointed by a probate court
• C. A beneficiary that gains rights only after the insured's death
• D. A beneficiary that cannot be changed without their written consent

Correct answer: D. A beneficiary that cannot be changed without their written consent

Explanation: An irrevocable beneficiary has a vested interest in the policy and cannot be changed without their written consent. This limits the policyowner's flexibility in making policy changes.

• A. Paying the entire death benefit in one payment
• B. Paying the death benefit in installments
• C. Converting the benefit to an annuity
• D. Leaving the benefit on deposit with interest

Correct answer: A. Paying the entire death benefit in one payment

Explanation: The lump sum settlement option pays the entire death benefit to the beneficiary in one single payment. This is the most common and straightforward settlement option.

• A. The insurer pays the proceeds in installments that include principal and interest
• B. The insurer holds the proceeds and pays only the interest to the beneficiary
• C. The insurer pays interest on the death benefit only while the claim is under review
• D. The beneficiary receives the proceeds in one payment plus interest accrued since death

Correct answer: B. The insurer holds the proceeds and pays only the interest to the beneficiary

Explanation: Under the interest only option, the insurance company retains the death benefit principal and pays the beneficiary only the interest earned. The beneficiary can later choose how to receive the principal.

• A. The insurer pays a fixed dollar amount until the proceeds run out
• B. The insurer pays the benefit for as long as the beneficiary lives
• C. The insurer pays the benefit over a fixed number of years
• D. The insurer holds the benefit for a fixed period and then pays a lump sum

Correct answer: C. The insurer pays the benefit over a fixed number of years

Explanation: The fixed period (installments for a fixed period) settlement option pays the death benefit in equal installments over a specified number of years until the principal and interest are exhausted.

• A. Income from the policy's cash value
• B. A single payment for the beneficiary's lifetime needs
• C. Payments until the insured's death
• D. Periodic payments for the beneficiary's entire lifetime

Correct answer: D. Periodic payments for the beneficiary's entire lifetime

Explanation: The life income settlement option provides periodic payments to the beneficiary for their entire lifetime. The payment amount depends on the death benefit amount and the beneficiary's age.

• A. The process of evaluating and classifying risk to determine insurability and premium
• B. The process of soliciting applications and delivering policies to applicants
• C. The process of investigating and settling claims after a loss has been reported
• D. The process of drafting policy forms and filing them with the state for approval

Correct answer: A. The process of evaluating and classifying risk to determine insurability and premium

Explanation: Underwriting is the process by which insurance companies evaluate applications, assess risk factors, determine if coverage will be offered, and set appropriate premium rates.

• A. The applicant presents higher-than-average risk and pays a rated premium
• B. The applicant presents average risk and qualifies for standard premium rates
• C. The applicant presents lower-than-average risk and qualifies for the lowest rates
• D. The applicant presents a risk the insurer will accept only with an exclusion rider

Correct answer: B. The applicant presents average risk and qualifies for standard premium rates

Explanation: Standard risk classification means the applicant presents an average level of risk and qualifies for standard (normal) premium rates. They are neither preferred (better than average) nor substandard (higher risk).