ARIZONA LIFE INSURANCE EXAM 4 2026
PRACTICE TEST PAPER POLICY TYPES AND
UNDERWRITING REVIEW SHEET FULL
SOLUTIONS
◉ taxable income may be the result from all of these modified
endowment contract (MEC) tranasactions except for
a cash value loan is taken out
automatic premium loan provision is utilized
the policy is surrendered for less than what was paid into it
dividend is issued. Answer: the policy is surrendered for less than
what was paid into it
◉ which statement regarding the life insurance premium for a
childrens rider is true
decreasing premium as each child becomes an adult
,premium remains the same no matter how many children
increasing premium as additional children are born
no premium is normally charged for a childrens rider. Answer:
premium remains the same no matter how many children
◉ which of the life insurance policies does NOT contain a cash value
provision
modified whole life
universal life
decreasing term life
adjustable life. Answer: decreasing term life
◉ what is the tax treatment of benefit payments for a non-qualified
annuity
benefit payments are always fully taxable
,benefit payments are subject to taxes only prior to age 70 1/2
benefit payments must begin at age 59 1/2 to void a penalty
benefit payments received after 70 1/2 are always tax-exempt.
Answer: benefit payment are always fully taxable
◉ the insurance coverage in a variable life insurance policy may vary
based on the value of
the AM best rating the company has received
its underlying investments
the consumer price index
the total premiums paid. Answer: its underlying investments
◉ 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
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. Answer:
relieve the insured of premium payments following an initial waiting
period after the insured becomes totally disabled
◉ 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
as section 1035 exchange
as a transfer
as a rollover
PRACTICE TEST PAPER POLICY TYPES AND
UNDERWRITING REVIEW SHEET FULL
SOLUTIONS
◉ taxable income may be the result from all of these modified
endowment contract (MEC) tranasactions except for
a cash value loan is taken out
automatic premium loan provision is utilized
the policy is surrendered for less than what was paid into it
dividend is issued. Answer: the policy is surrendered for less than
what was paid into it
◉ which statement regarding the life insurance premium for a
childrens rider is true
decreasing premium as each child becomes an adult
,premium remains the same no matter how many children
increasing premium as additional children are born
no premium is normally charged for a childrens rider. Answer:
premium remains the same no matter how many children
◉ which of the life insurance policies does NOT contain a cash value
provision
modified whole life
universal life
decreasing term life
adjustable life. Answer: decreasing term life
◉ what is the tax treatment of benefit payments for a non-qualified
annuity
benefit payments are always fully taxable
,benefit payments are subject to taxes only prior to age 70 1/2
benefit payments must begin at age 59 1/2 to void a penalty
benefit payments received after 70 1/2 are always tax-exempt.
Answer: benefit payment are always fully taxable
◉ the insurance coverage in a variable life insurance policy may vary
based on the value of
the AM best rating the company has received
its underlying investments
the consumer price index
the total premiums paid. Answer: its underlying investments
◉ 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
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. Answer:
relieve the insured of premium payments following an initial waiting
period after the insured becomes totally disabled
◉ 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
as section 1035 exchange
as a transfer
as a rollover
