ARIZONA LIFE INSURANCE EXAM 2024 ACTUAL EXAM 2
VERSIONS (VERSION A AND B) COMPLETE 500
QUESTIONS WITH DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) / ALREADY GRADED A+
Insurance - ANSWER: a contract that idemnifies another against loss, damage or
liability from an unknown event.
Indemnify - ANSWER: To make a person whole by restoring that person to the same
financial position that existed before the loss.
Policyowner - ANSWER: The insured
Premium - ANSWER: A set amount of money for the insurance
Insurer - ANSWER: The insurance company
Insured - ANSWER: Person covered by insurance
Policy - ANSWER: Legal document of a contract of insurance
Loss - ANSWER: Reduction in the value of an asset
Claim - ANSWER: Demand for payment of the insurance benefit to the person named
in the policy
Risk - ANSWER: Evaluated by two things: possibility of loss and the uncertainty of
whether or not the loss will occur
Uncertaintiy of financial loss
Pure Risk - ANSWER: There is only a chance of loss only one insurable
Speculative Risk - ANSWER: Involves both an uncertainty of loss and gain
Peril - ANSWER: The immediate specific event causing loss and giving rise to risk,
cause of risk
Hazard - ANSWER: Any factor that gives rise to peril, three types
Physical hazards - ANSWER: Arise from material, structural, or operational features
of a risk situation. (Slippery Floors, unsanitary conditions etc..)
Moral hazards - ANSWER: Arise from people's habits and values, filling a false claim
ex
,Morale hazards - ANSWER: Arise out of human carelessness or irresponsibility,
(failure to take safety precautions)
Five methods for dealing with risk - ANSWER: S. T. A. R. R.
Sharing - ANSWER: A risk that cannot be avoided, choosing risk as a means of
handling the risk, by sharing risk we can also share the potential losses.
Transfer - ANSWER: Transferring the risk of loss to another party, usually an
insurance company more wiling to bear the risk.
Avoidance - ANSWER: Avoiding the risk in the first place, not undertaking a chance
that can result in a chance of loss
Reduction - ANSWER: When risks cannot be avoided, they may be able to be reduced
Reducing the potential loss that might occur or by reducing the amount the potential
loss if it occurs
Retention - ANSWER: Doing nothing about the risk, people assume or retain the
overall risk
Law of large numbers - ANSWER: Ability to make predictions of losses in a group is
based upon the law of large numbers
Insurable interest - ANSWER: Person having legitimate interest and can benefit from
preservation of the life or the property insured
Deductible - ANSWER: The initial amount of a covered loss that the insured must pay
In order for insurer to pay for the remainder of the claim
Elimination period - ANSWER: The number of days an insured must be disabled
before disability income benefits become payable
Co insurance - ANSWER: Within a specific coverage range the insured and the insurer
will share the allowed expenses
Property insurance - ANSWER: Protects the insured against the financial
consequences of the direct or consequential loss
Casualty insurance - ANSWER: Protects the insured against the financial
consequences of legal liability including that for death,injury, disability or damage to
real or personal property
Life insurance - ANSWER: Insurance coverage on human lives including endowments
and annuities and may include benefits based upon accidental death or benefits for
disability
, Annuity - ANSWER: Provides guaranteed income for the life of an annuitant,
protecting an individual from the risk of living to long
Accident and health or sickness insurance - ANSWER: Protects the insured against
financial loss cause by sickness, bodily injury, accidental death, and may include
benefits for disability income
Variable life and variable annuity products - ANSWER: Insurance coverage provided
under variable life insurance contracts and variable annuities. Variable carry
investment risk an require an insurance license and a securities License
Credit insurance - ANSWER: Limited line of insurance protecting the insured who is
usually a creditor, if unable to repay debts or results of illness
Private commercial insurers - ANSWER: Profit making insurance company
Private non commercial insurers - ANSWER: Non profit service organization
U.S. Government insurers - ANSWER: Special non profit insurer
Stocks insurance company - ANSWER: Consists of stockholders also known as share
holders whip own shares in the company, this is considered non participating as
there is no dividends
Non participating company - ANSWER: Policy holders do not receive dividends from
stock ownership
Participating company - ANSWER: Policy holders receive dividends and participate in
them
Mutual insurers - ANSWER: No stock holders, ownership rests with the policy holders
also known as policy holders.
Reciprocal insurers - ANSWER: Are unincorporated groups of people that provide
insurance for one another through individual indemnity agreements. Each reciprocal
is known as a subscriber.
Fraternal insurers - ANSWER: Are primarily life insurance carriers that exists as social
organizations and usually engage in charitable, customed to individuals associated
with that particular group
Lloyds of London - ANSWER: Is not a physical insurance company but acts as a
meeting
Place and services to its members who transact insurance
VERSIONS (VERSION A AND B) COMPLETE 500
QUESTIONS WITH DETAILED VERIFIED ANSWERS (100%
CORRECT ANSWERS) / ALREADY GRADED A+
Insurance - ANSWER: a contract that idemnifies another against loss, damage or
liability from an unknown event.
Indemnify - ANSWER: To make a person whole by restoring that person to the same
financial position that existed before the loss.
Policyowner - ANSWER: The insured
Premium - ANSWER: A set amount of money for the insurance
Insurer - ANSWER: The insurance company
Insured - ANSWER: Person covered by insurance
Policy - ANSWER: Legal document of a contract of insurance
Loss - ANSWER: Reduction in the value of an asset
Claim - ANSWER: Demand for payment of the insurance benefit to the person named
in the policy
Risk - ANSWER: Evaluated by two things: possibility of loss and the uncertainty of
whether or not the loss will occur
Uncertaintiy of financial loss
Pure Risk - ANSWER: There is only a chance of loss only one insurable
Speculative Risk - ANSWER: Involves both an uncertainty of loss and gain
Peril - ANSWER: The immediate specific event causing loss and giving rise to risk,
cause of risk
Hazard - ANSWER: Any factor that gives rise to peril, three types
Physical hazards - ANSWER: Arise from material, structural, or operational features
of a risk situation. (Slippery Floors, unsanitary conditions etc..)
Moral hazards - ANSWER: Arise from people's habits and values, filling a false claim
ex
,Morale hazards - ANSWER: Arise out of human carelessness or irresponsibility,
(failure to take safety precautions)
Five methods for dealing with risk - ANSWER: S. T. A. R. R.
Sharing - ANSWER: A risk that cannot be avoided, choosing risk as a means of
handling the risk, by sharing risk we can also share the potential losses.
Transfer - ANSWER: Transferring the risk of loss to another party, usually an
insurance company more wiling to bear the risk.
Avoidance - ANSWER: Avoiding the risk in the first place, not undertaking a chance
that can result in a chance of loss
Reduction - ANSWER: When risks cannot be avoided, they may be able to be reduced
Reducing the potential loss that might occur or by reducing the amount the potential
loss if it occurs
Retention - ANSWER: Doing nothing about the risk, people assume or retain the
overall risk
Law of large numbers - ANSWER: Ability to make predictions of losses in a group is
based upon the law of large numbers
Insurable interest - ANSWER: Person having legitimate interest and can benefit from
preservation of the life or the property insured
Deductible - ANSWER: The initial amount of a covered loss that the insured must pay
In order for insurer to pay for the remainder of the claim
Elimination period - ANSWER: The number of days an insured must be disabled
before disability income benefits become payable
Co insurance - ANSWER: Within a specific coverage range the insured and the insurer
will share the allowed expenses
Property insurance - ANSWER: Protects the insured against the financial
consequences of the direct or consequential loss
Casualty insurance - ANSWER: Protects the insured against the financial
consequences of legal liability including that for death,injury, disability or damage to
real or personal property
Life insurance - ANSWER: Insurance coverage on human lives including endowments
and annuities and may include benefits based upon accidental death or benefits for
disability
, Annuity - ANSWER: Provides guaranteed income for the life of an annuitant,
protecting an individual from the risk of living to long
Accident and health or sickness insurance - ANSWER: Protects the insured against
financial loss cause by sickness, bodily injury, accidental death, and may include
benefits for disability income
Variable life and variable annuity products - ANSWER: Insurance coverage provided
under variable life insurance contracts and variable annuities. Variable carry
investment risk an require an insurance license and a securities License
Credit insurance - ANSWER: Limited line of insurance protecting the insured who is
usually a creditor, if unable to repay debts or results of illness
Private commercial insurers - ANSWER: Profit making insurance company
Private non commercial insurers - ANSWER: Non profit service organization
U.S. Government insurers - ANSWER: Special non profit insurer
Stocks insurance company - ANSWER: Consists of stockholders also known as share
holders whip own shares in the company, this is considered non participating as
there is no dividends
Non participating company - ANSWER: Policy holders do not receive dividends from
stock ownership
Participating company - ANSWER: Policy holders receive dividends and participate in
them
Mutual insurers - ANSWER: No stock holders, ownership rests with the policy holders
also known as policy holders.
Reciprocal insurers - ANSWER: Are unincorporated groups of people that provide
insurance for one another through individual indemnity agreements. Each reciprocal
is known as a subscriber.
Fraternal insurers - ANSWER: Are primarily life insurance carriers that exists as social
organizations and usually engage in charitable, customed to individuals associated
with that particular group
Lloyds of London - ANSWER: Is not a physical insurance company but acts as a
meeting
Place and services to its members who transact insurance
