ARIZONA LIFE INSURANCE EXAM 4 2026
QUESTION COLLECTION RISK MANAGEMENT
AND INSURANCE CONTRACTS MODULE
SOLVED ITEMS AND RESPONSE KEY
◉ Death Benefit. Answer: The amount paid upon the death of the
insured in a life insurance policy
◉ Cash Value. Answer: Equity amount accumulated in permanent
life insurance
◉ Estate. Answer: A person's net worth
◉ Illustrations. Answer: Presentation or depiction of nonguaranteed
elements of a life insurance policy
◉ Life Insurance. Answer: Coverage on human lives
◉ Liquidation. Answer: Selling assets in order to raise capital (such
as using cash value for capital needs)
◉ Lump-Sum. Answer: Payment of the entire benefit in one sum
,◉ Minor. Answer: A person under legal age
◉ Solvency. Answer: The ability to meet financial obligations (an
insurance company maintains enough assets to pay claims)
◉ Survivor Protection. Answer: Life insurance can provide the funds
necessary for the survivors of the insured to be able to maintain
their lifestyle in the event of the insured's death and this is called
________________
◉ Estate Conservation. Answer: Life insurance proceeds may be
used to pay inheritance taxes and federal estate taxes so that it is not
necessary for the beneficiaries to sell off the assets which is
___________________
◉ Estate Creation. Answer: The insured will have an estate worth
the amount of the life policy upon the first paid premium which is
______________
◉ Viatical Settlements. Answer: ____________________ allows someone
living with a life-threatening condition to sell their existing life
insurance policy and use the proceeds when they are most needed,
before their death
, ◉ Viator. Answer: The insured selling their life insurance in a viatical
settlement
◉ Viatical Settlement Provider. Answer: A person, other than a
viator, that enters into a viatical settlement contract (the person
buying the life insurance policy)
◉ Viatical Producer. Answer: A person who represents the viatical
settlement provider
◉ Viatical Broker. Answer: A person who represents the viator
◉ Life Settlement. Answer: Any financial transaction in which the
owner of a life insurance policy sells a policy that is no longer
needed to a third party for some form of compensation, usually cash
◉ Uses of Life Insurance. Answer: 1. Survivor Protection
2. Estate Creation and Conservation
3. Liquidity and Cash Accumulation
4. Viatical Settlements and Life Settlements
◉ Human Life Value Approach. Answer: This approach gives the
insured an estimate of what would be lost to the family in the event
of the premature death of the insured. It calculates an individual's
QUESTION COLLECTION RISK MANAGEMENT
AND INSURANCE CONTRACTS MODULE
SOLVED ITEMS AND RESPONSE KEY
◉ Death Benefit. Answer: The amount paid upon the death of the
insured in a life insurance policy
◉ Cash Value. Answer: Equity amount accumulated in permanent
life insurance
◉ Estate. Answer: A person's net worth
◉ Illustrations. Answer: Presentation or depiction of nonguaranteed
elements of a life insurance policy
◉ Life Insurance. Answer: Coverage on human lives
◉ Liquidation. Answer: Selling assets in order to raise capital (such
as using cash value for capital needs)
◉ Lump-Sum. Answer: Payment of the entire benefit in one sum
,◉ Minor. Answer: A person under legal age
◉ Solvency. Answer: The ability to meet financial obligations (an
insurance company maintains enough assets to pay claims)
◉ Survivor Protection. Answer: Life insurance can provide the funds
necessary for the survivors of the insured to be able to maintain
their lifestyle in the event of the insured's death and this is called
________________
◉ Estate Conservation. Answer: Life insurance proceeds may be
used to pay inheritance taxes and federal estate taxes so that it is not
necessary for the beneficiaries to sell off the assets which is
___________________
◉ Estate Creation. Answer: The insured will have an estate worth
the amount of the life policy upon the first paid premium which is
______________
◉ Viatical Settlements. Answer: ____________________ allows someone
living with a life-threatening condition to sell their existing life
insurance policy and use the proceeds when they are most needed,
before their death
, ◉ Viator. Answer: The insured selling their life insurance in a viatical
settlement
◉ Viatical Settlement Provider. Answer: A person, other than a
viator, that enters into a viatical settlement contract (the person
buying the life insurance policy)
◉ Viatical Producer. Answer: A person who represents the viatical
settlement provider
◉ Viatical Broker. Answer: A person who represents the viator
◉ Life Settlement. Answer: Any financial transaction in which the
owner of a life insurance policy sells a policy that is no longer
needed to a third party for some form of compensation, usually cash
◉ Uses of Life Insurance. Answer: 1. Survivor Protection
2. Estate Creation and Conservation
3. Liquidity and Cash Accumulation
4. Viatical Settlements and Life Settlements
◉ Human Life Value Approach. Answer: This approach gives the
insured an estimate of what would be lost to the family in the event
of the premature death of the insured. It calculates an individual's
