Arizona life and health insurance exam Latest Update 2024-2025 Exam 370 Questions and 100% Verified Correct Answers Guaranteed A+
A business becoming incorporated is an example of risk ____.
eduction
severance
retention
transfer - CORRECT ANSWER: transfer
A business may purchase an annuity for all of the following reasons EXCEPT
Structuring a liability settlement payment
informally funding a non-qualified deferred compensation plan
Accumulating assets on a tax-deferred basis
Providing a pension to employees - CORRECT ANSWER: informally funding a non-
qualified deferred compensation plan
A Keogh plan is a(n)
unqualified retirement plan for large corporations
qualified retirement plan for the self employed
tax-exempt annuity for government workers
split dollar plan for key employees - CORRECT ANSWER: qualified retirement plan for the self employed
A life annuity feature which provides benefit payments for a minimum number of years, no matter when the annuitant dies, is called
fixed period
period certain
installment refund 1 / 4
straight life - CORRECT ANSWER: period certain
A life insurance guaranteed insurability rider gives the insured the right, without proving insurability, to
purchase life insurance policies on his children as they are born
purchase life insurance on a spouse after becoming married
purchase additional life insurance at anytime
periodically purchase additional insurance - CORRECT ANSWER: periodically
purchase additional insurance
a life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured death
total premiums paid plus the policy face amount
face amount plus interest
interest acquired plus total premiums paid
face amount minus any outstanding loan balances - CORRECT ANSWER: total
premiums paid plus the policy face amount
A life insurance policyowner would like a dividend option that results in a limited current outlay of funds. Which dividend option would be chosen?
Paid-up additions
Accumulation at interest
1-year term
Reduction of premium payment - CORRECT ANSWER: Reduction of premium
payment
a life insurance policys waiver of premium rider has the ability to
waive the premium payments in the event the insured becomes financially insolvent
relieve the insured of preimum payments following an initial waiting period after the insured becomes totally disabled
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provide a policy loan to cover the premium payments in the event the insured becomes totally disabled
waive the premiums on this policy as well as any other insurance policy belonging to the insured i the event of total disability - CORRECT ANSWER: relieve the insured of premium payments following an initial waiting period after the insured becomes totally disabled
A life insurance producer's underwriting duties may include
approving or declining a life insurance application
seeking additional information requested by the insurance company
ordering an MIB report
determining the rate classification of the applicant - CORRECT ANSWER: seeking
additional information requested by the insurance company
A life policy that has premiums that are lower than normal during the early years is called
Decreasing term
Modified life
Variable life
Limited-pay life - CORRECT ANSWER: Modified life
a material change in a modified endowment contract (MEC) results in
the contract becoming void
a new contestable period
the seven pay test, adjustable for cash value, applies again
a tax penalty - CORRECT ANSWER: the seven pay test, adjustable for cash value,
applies again
A nonparticipating whole life insurance policy was surrendered for its $20,000 cash value. The total premiums paid had totaled $16,000. What were the federal income tax consequences to the policyowner on receipt of the cash value?
$16,000 was received as ordinary income and $4,000 as tax-free 3 / 4
$20,000 was received as a capital gain
$20,000 was received as ordinary income
$16,000 was received tax-free and $4,000 as ordinary income - CORRECT ANSWER:
$16,000 was received tax-free and $4,000 as ordinary income
A qualified profit-sharing plan is designed to
allow key employees to participate in the profits of the company
distribute a portion of company earnings to its employees
keep key employees from leaving the company
allow employees to elect company officers - CORRECT ANSWER: distribute a portion of company earnings to its employees
A retired couple would like to maximize the income derived from their combined life savings and have it payable until they both die. Which annuity would be their best choice?
Fixed annuity
Survivorship annuity
Joint life annuity
Joint and survivor annuity - CORRECT ANSWER: Joint and survivor annuity
A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?
If the interest rate falls below a specified level, the surrender charge is waived
If the interest rate rises above a certain level, the surrender charge is waived
It allows the Life and Health Guaranty Association to bailout the insolvent insurer
A reinsurer will make the remainder of the annuity payments if the original insurance
company becomes insolvent - CORRECT ANSWER: If the interest rate falls below a
specified level, the surrender charge is waived
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