17 Free Arizona Life Insurance Exam Practice Questions (2026)
How to Use This Life Question Set
Arizona tests life insurance either inside the combined Series 13-33 exam alongside accident and health material, or on its own in the single-line Series 13-31 exam. Series 13-31 on its own carries 100 items in 2 hours for $50 per attempt; the combined exam runs 150 items in 150 minutes for $59. Either way, there's no pre-licensing course standing between you and the exam — Arizona's licensing statutes list four conditions for approval (age, no disqualifying acts, paid fees, passed exam) and none of them is a completed course. The passing score on every version is a flat 70% correct, and PSI Services LLC delivers all three exam versions, at a test center or through its Online Proctored remote option.
PSI's Series 13-33 outline gives life material the largest single section on the whole exam — Life, Accident and Health Insurance Basics at 17%, shared with health content — plus Types of Life Insurance Policies (9%), Life Insurance Policy Provisions, Options and Riders (15%), Annuities (7%), and a share of Federal Tax Considerations for Life and Health Insurance (5%). Together, life-specific material accounts for roughly a third of the combined exam's 150 items, and for the entirety of Series 13-31's own 100-item outline.
These 17 questions come from chapters 3, 4, 5 and 6 of LanePrep's Arizona Life, Accident and Health quiz bank, none of them repeated from the free 25-question sample across the whole exam: 3 on life insurance basics and underwriting (Chapter 3), 4 on types of life insurance policies (Chapter 4), 6 on policy provisions, options and riders (Chapter 5), and 4 on annuities and taxation (Chapter 6). Each question shows its chapter, so a miss tells you exactly which audio lesson to replay.
Work them before you read the answer. Every question has the explanation folded underneath it. Guessing and then reading is worth more than reading and then agreeing.
Practice Questions 1-7: Life Insurance Basics and Types of Policies
Chapter 3 opens with the business and underwriting side of life insurance's basics section: the human life value approach to sizing a policy, a cross-purchase buy-sell agreement funded by two partners' policies on each other, and the risk classifications underwriters assign from preferred plus down to substandard. Chapter 4 then moves through the policy types tested by name — single premium whole life, group life's conversion privilege, indexed universal life, and the cash value built into a juvenile policy. These seven move through all of it.
Question 1 (Chapter 3)
An Arizona insurance producer is explaining the human life value approach to a client. Which statement accurately describes a key characteristic of this method for determining life insurance needs?
- A) It calculates the present value of the individual's future after-tax earnings minus personal living expenses.
- B) It sums specific financial obligations like mortgage payoff and college funding, then subtracts existing assets.
- C) It focuses primarily on providing liquidity for estate taxes and final expenses rather than income replacement.
- D) It is most appropriate for non-working spouses or retirees with no future earning potential.
Show answer & explanation
Answer: A
The human life value approach determines life insurance needs by calculating the present value of an individual's future net earnings (after-tax income minus personal expenses) over their expected working lifetime. Option B describes the needs approach, which tallies specific financial needs. Option C incorrectly attributes a liquidity focus to human life value; liquidity is a personal use but not the method's primary calculation. Option D is incorrect because the human life value approach relies on future earnings, making it unsuitable for those without earning potential.
Question 2 (Chapter 3)
Two partners in an Arizona medical practice establish a cross-purchase buy-sell agreement funded by life insurance. Each partner purchases a policy on the other's life. If Partner A dies, what is the primary purpose of the death benefit received by Partner B?
- A) To provide Partner B with retirement income for life.
- B) To enable Partner B to purchase Partner A's ownership share from A's estate.
- C) To cover the medical practice's outstanding business loans and lines of credit.
- D) To compensate Partner B for emotional distress and suffering due to the loss of Partner A.
Show answer & explanation
Answer: B
In a cross-purchase buy-sell agreement, each owner buys a policy on the other's life. Upon death, the surviving owner uses the death benefit to buy the deceased owner's interest from their estate, ensuring business continuity and providing fair compensation to the family. It is not for retirement income, debt payment (unless specified), or emotional distress.
Question 3 (Chapter 3)
An applicant is classified as a 'preferred plus' risk for life insurance. Which factor most likely contributed to this classification?
- A) The applicant has a history of controlled hypertension and smokes one pack of cigarettes per day.
- B) The applicant has a build chart rating in the obese range but normal cholesterol levels.
- C) The applicant has excellent health, no family history of early cardiac disease, and engages in no hazardous activities.
- D) The applicant recently recovered from a major surgery and has elevated liver enzymes.
Show answer & explanation
Answer: C
Preferred plus (or similar top-tier) classifications are reserved for applicants with optimal health: excellent personal health, favorable family history, no tobacco use, and no hazardous avocations. Options A, B, and D describe factors that would lead to standard, substandard, or declined ratings due to health risks.
Question 4 (Chapter 4)
A 40-year-old Arizona resident purchases a single premium whole life insurance policy with a $50,000 death benefit by paying a $25,000 lump sum. Which statement is true about this policy?
- A) The policy will lapse if additional premiums are not paid yearly
- B) The death benefit is guaranteed and the policy is fully paid up after the single payment
- C) The cash value will remain zero because it is single premium
- D) The policy only provides coverage for 10 years
Show answer & explanation
Answer: B
A single premium whole life policy is funded by one lump sum payment that fully pays for the policy. It provides lifelong coverage with a guaranteed death benefit and begins accumulating cash value immediately. No further premiums are required. Options A, C, D are incorrect: the policy does not lapse due to no further payments, cash value does accumulate, it is not limited to 10 years, and no ongoing premiums are needed.
Question 5 (Chapter 4)
Which of the following is a key characteristic of group life insurance typically offered by employers in Arizona?
- A) Each employee must undergo individual medical underwriting to qualify
- B) Employees may often convert their group coverage to an individual permanent policy upon leaving employment, usually without evidence of insurability
- C) Coverage is portable and remains with the employee after leaving the job without any action
- D) The death benefit is always a flat $50,000 regardless of salary
Show answer & explanation
Answer: B
A key characteristic of group life insurance is the conversion privilege: upon termination of employment, employees can typically convert their group term coverage to an individual permanent life insurance policy without providing evidence of insurability, though they must apply and pay premiums within a limited time. Options A, C, D are incorrect: individual underwriting is not required (that's the point of group), coverage is not automatically portable (conversion requires action), and benefits are usually salary-based rather than a flat amount.
Question 6 (Chapter 4)
An Arizona resident wants a life insurance policy that builds cash value with tax-deferred growth, allows flexible premium payments, and offers a choice between a fixed interest rate and index-linked returns. Which policy type best meets these criteria?
- A) Indexed universal life
- B) Variable life
- C) Variable universal life
- D) Whole life
Show answer & explanation
Answer: A
Indexed universal life (IUL) insurance provides tax-deferred cash value growth, flexible premiums (within policy limits), and the option to allocate cash value to a fixed account earning a guaranteed interest rate or to an index-linked strategy (e.g., tied to the S&P 500) with a minimum guaranteed return. This combines flexibility with market-indexed growth potential and downside protection. Option B (variable life) does not offer flexible premiums—premiums are typically fixed. Option C (variable universal life) offers investment flexibility and adjustable premiums but does not typically include an index-linked option with a guaranteed minimum return as a core feature; it focuses on variable sub-accounts. Option D (whole life) has fixed premiums and does not offer index-linked returns.
Question 7 (Chapter 4)
Which statement accurately describes a key characteristic of juvenile life insurance?
- A) It is often purchased by parents or grandparents and builds cash value that can be accessed later in life.
- B) It is primarily purchased to provide income replacement for the child's future earnings.
- C) It is always a term life insurance policy that expires when the child reaches age 18.
- D) It requires the child to pass a medical exam at the time of purchase, regardless of age.
Show answer & explanation
Answer: A
Juvenile life insurance is typically purchased by parents or grandparents on a child's life and often builds cash value over time. This cash value can be accessed later in life through policy loans or withdrawals for purposes such as education, a down payment on a home, or supplemental retirement income. Option B is incorrect because juvenile life insurance is not primarily for income replacement—children typically have no earnings to replace. Option C is false; juvenile life insurance is usually permanent (whole life) and does not expire at age 18. Option D is incorrect because many juvenile life insurance policies are issued with simplified or guaranteed issue underwriting, especially for young children, and do not require a medical exam.
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Practice Questions 8-13: Life Insurance Policy Provisions, Options and Riders
Chapter 5 is the standard-provisions chapter: the guaranteed insurability rider that lets a policyholder add coverage without new underwriting, the family term rider that covers a spouse and children under one rider, the accelerated (living) benefit rider for a terminal diagnosis, what reinstating a lapsed policy actually requires, the cash surrender value nonforfeiture option, and how an accidental death benefit rider treats a death where the proximate cause wasn't the accident itself. These six move through all of it.
Question 8 (Chapter 5)
An Arizona life insurance policy includes a guaranteed insurability rider. Which statement best describes how this rider functions?
- A) It waives the cost of insurance charges if the policyholder becomes totally and permanently disabled.
- B) It allows the policyholder to increase the death benefit at specified intervals without providing evidence of insurability.
- C) It provides a monthly income benefit if the policyholder is unable to work due to injury or sickness.
- D) It guarantees that the policy will be reinstated if lapsed due to nonpayment of premium within three years.
Show answer & explanation
Answer: B
A guaranteed insurability rider (also called a guaranteed purchase option) allows the policyholder to purchase additional amounts of coverage at predetermined times or events (e.g., every three years, marriage, birth of a child) without having to provide evidence of insurability. Option A describes a waiver of premium rider. Option C describes a disability income rider. Option D describes reinstatement provisions, which require evidence of insurability and are not guaranteed.
Question 9 (Chapter 5)
Which rider provides coverage for the spouse and children under a single term insurance rider attached to a permanent life insurance policy?
- A) Family term rider
- B) Disability income rider
- C) Guaranteed insurability rider
- D) Return of premium rider
Show answer & explanation
Answer: A
A family term rider provides term life insurance coverage for the spouse and/or children under a single rider attached to a permanent life insurance policy (usually on the primary insured). Option B provides income if the primary insured is disabled. Option C allows additional coverage purchases without evidence of insurability. Option D returns premiums if the insured survives to a certain age or returns the death benefit plus premiums paid if the insured dies.
Question 10 (Chapter 5)
A policyowner wants to add a rider that will pay a portion of the death benefit early if the insured is diagnosed with a terminal illness. Which rider best meets this need?
- A) Accelerated (living) benefit rider
- B) Waiver of premium rider
- C) Cost of living rider
- D) Disability income benefit rider
Show answer & explanation
Answer: A
An accelerated (living) benefit rider allows the insured to receive a portion of the death benefit while still alive if they meet certain criteria, such as a terminal illness, long-term care confinement, or specified medical condition. Option B waives premiums if disabled but does not provide early access to the death benefit. Option C increases the death benefit over time to offset inflation. Option D provides income if disabled but does not accelerate the death benefit.
Question 11 (Chapter 5)
Under Arizona law, which statement about the reinstatement of a lapsed life insurance policy is correct?
- A) Reinstatement requires evidence of insurability, payment of all overdue premiums with interest, and possibly repayment of policy loans.
- B) The insurer must reinstate the policy if the policyowner requests it within 30 days of lapse.
- C) The policy can be reinstated without any underwriting if the lapse was less than 60 days.
- D) Reinstatement is automatic after paying the overdue premium, regardless of the insured's health.
Show answer & explanation
Answer: A
To reinstate a lapsed life insurance policy, the policyowner must typically provide evidence of insurability, pay all overdue premiums with interest, and repay any policy loans with interest. The insurer is not required to reinstate and may deny based on changes in health. There is no automatic reinstatement after a set period or without underwriting. Arizona follows standard reinstatement provisions for life insurance policies.
Question 12 (Chapter 5)
An Arizona policyowner elects the cash surrender value nonforfeiture option. What is the result of this election?
- A) The policyholder receives the cash value in a lump sum and the policy terminates.
- B) The policyholder receives the cash value and the policy remains in force with reduced coverage.
- C) The policyholder receives paid-up insurance with a face amount equal to the original policy.
- D) The policyholder receives extended term insurance for the same face amount as the original policy.
Show answer & explanation
Answer: A
A is correct because electing cash surrender value means the policyholder receives the accumulated cash value and the policy is terminated. B is incorrect because the policy does not remain in force. C is incorrect because reduced paid-up insurance, not cash surrender, provides paid-up coverage. D is incorrect because extended term insurance provides temporary coverage, not a lump sum payment.
Question 13 (Chapter 5)
An Arizona life insurance policy includes an accidental death benefit rider. The insured dies as a result of a heart attack while driving, which causes a car accident. The medical examiner determines the heart attack occurred first and caused the loss of control of the vehicle. How will the accidental death benefit rider likely be applied?
- A) The accidental death benefit will not be paid because the heart attack was the proximate cause of death.
- B) The full accidental death benefit will be paid in addition to the base death benefit.
- C) Only half of the accidental death benefit will be paid.
- D) The accidental death benefit will be paid, but the base death benefit will be reduced by the same amount.
Show answer & explanation
Answer: A
An accidental death benefit rider pays only if the death results directly and independently of all other causes from an accident, and the accident must occur within a specified time (usually 90 days). If a heart attack (a natural cause) precedes and causes the accident, the death is not considered accidental for the purpose of the rider. The proximate cause is the heart attack, so the rider does not pay.
Practice Questions 14-17: Annuities and Taxation
Chapter 6 closes the life portion of the outline with annuities and taxation: how a group accident and health policy's premium is taxed when the employer pays all of it, the exclusion ratio that splits a non-qualified annuity payment into a tax-free and a taxable piece, the irrevocable election an employee makes into a flexible spending account, and what happens tax-wise when a participating policy's dividends sit with the insurer earning interest. These four move through all of it.
Question 14 (Chapter 6)
Which statement accurately describes the federal tax treatment of premiums paid for a group accident and health insurance policy where the employer pays 100% of the premium?
- A) The premiums are not included in the employee's taxable income and the employer may deduct them as a business expense.
- B) The premiums are included in the employee's taxable income.
- C) The premiums are deductible by the employee as a medical expense.
- D) The premiums generate a tax credit for the employee equal to 30% of the amount paid.
Show answer & explanation
Answer: A
When an employer pays 100% of the premium for a group accident and health insurance policy, the premiums are not included in the employee's taxable income because the employer's payment is considered a tax-free fringe benefit. Additionally, the employer may deduct the premiums as a ordinary and necessary business expense. Option B is incorrect because the premiums are not taxable to the employee. Option C is incorrect because employees cannot deduct employer-paid premiums. Option D is incorrect because no such tax credit exists for health insurance premiums under federal tax law.
Question 15 (Chapter 6)
Which of the following statements about the exclusion ratio for a non-qualified immediate annuity is correct?
- A) For a life annuity, the exclusion ratio is based on the annuitant's life expectancy as determined by IRS tables.
- B) The exclusion ratio is calculated by dividing the total premium paid by the total expected return under the annuity.
- C) The exclusion ratio represents the portion of each annuity payment that is taxable as ordinary income.
- D) Once the exclusion ratio is exhausted, all subsequent payments are fully taxable as ordinary income.
Show answer & explanation
Answer: A
The exclusion ratio for a non-qualified immediate annuity is the percentage of each payment that is a return of principal and thus not taxable. It is calculated by dividing the investment in the contract (total premium paid) by the expected return (based on the annuitant's life expectancy using IRS actuarial tables). For a life annuity, life expectancy is indeed determined by IRS tables, making A correct. Option B is incorrect because it describes the inverse (expected return over investment). Option C is incorrect because the exclusion ratio is the non-taxable portion, not the taxable portion. Option D is incorrect because after the exclusion ratio is exhausted (i.e., after the investment is fully recovered), subsequent payments are fully taxable, but the exclusion ratio itself is not 'exhausted' in that way—it is a fixed percentage applied to each payment until the investment is recovered.
Question 16 (Chapter 6)
Which of the following statements about equity indexed annuities (EIAs) in Arizona is correct?
- A) EIAs are registered with the SEC and require a securities license to sell.
- B) EIAs provide direct ownership of the underlying index's stocks.
- C) EIAs are exempt from state insurance regulation because they are investment products.
- D) EIAs guarantee a minimum interest rate and offer returns linked to a stock market index.
Show answer & explanation
Answer: D
D is correct because equity indexed annuities are insurance products that provide a minimum guaranteed interest rate while offering potential returns based on the performance of a specified equity index, such as the S&P 500. A is incorrect because EIAs are not securities and are not registered with the SEC; they are regulated by state insurance departments. B is incorrect because the annuitant does not own the underlying stocks; returns are based on index performance. C is incorrect because EIAs are insurance products subject to state insurance regulation, not exempt from it.
Question 17 (Chapter 6)
Which of the following is true about the taxation of life insurance dividends when they are left to accumulate at interest with the insurer?
- A) The dividends are taxable as ordinary income when received.
- B) Both the dividends and the interest are tax-free until withdrawn.
- C) The dividends are taxable as capital gains when received.
- D) The dividends are tax-free, but the interest earned on them is taxable as ordinary income.
Show answer & explanation
Answer: D
D is correct because life insurance dividends are considered a return of premium and are not taxable when received or left on deposit. However, any interest earned on those dividends while held with the insurer is taxable as ordinary income when credited or withdrawn. A is incorrect because the dividends themselves are not taxable. B is incorrect because the interest is taxable. C is incorrect because dividends are not taxed as capital gains.
The Life Insurance Mistakes That Cost Marks
Assuming a life, accident and health producer must sit the combined exam. Arizona lets a candidate choose either Series 13-33 (both lines in one sitting) or the two single-line exams — Series 13-31 for Life alone costs less per attempt and tests the same life-specific content.
Treating the human life value approach and the needs approach as interchangeable. Human life value calculates the present value of future earnings; the needs approach sums specific obligations like a mortgage and education costs, then subtracts existing assets. They can produce very different coverage numbers for the same client.
Confusing the guaranteed insurability rider with the accelerated death benefit rider. Guaranteed insurability lets a policyholder add coverage at set intervals without new evidence of insurability; an accelerated benefit rider instead pays out part of the existing death benefit early, upon a qualifying diagnosis. One grows the policy, the other advances it.
Reading an annuity's exclusion ratio as a one-time calculation that never changes. The ratio is fixed at the start based on life expectancy and the investment in the contract, and it applies to every payment the same way until the investment in the contract is fully recovered — after that, payments become fully taxable.
Assuming cash surrender value and reinstatement are related options. Surrendering for cash value ends the policy outright; reinstating a lapsed policy is the opposite move; it requires evidence of insurability and payment of overdue premiums to bring the same policy back to life.
Your Next Step
How did you score?
13 or more correct: Arizona's passing score is a flat 70% correct, not a scaled score, so 13 of 17 (76%) is a reasonable proxy — but clearing most of them across policy types, provisions, riders and annuities is the real signal. Book Series 13-31 on its own, or the combined Series 13-33 if you're also sitting for Accident and Health, then read how to pass the Arizona Life & Health exam on the first try for the full study plan.
9-12 correct: You're in reasonable shape but not comfortable. Note which chapter your misses fell in and re-listen to that chapter's audio lesson before retesting.
Under 9 correct: The Life exam's first-time pass rate ran 48.6% in 2024 and 55.1% in 2025 (NAIC compiled) — candidate volume fell sharply between those years, an unresolved reporting anomaly rather than a confirmed trend, but neither figure is a sure thing to guess through. Start with Chapter 3 of the course and work forward rather than testing yourself again right away.
For a 17-question sample across the whole exam, see the free practice set; for the accident and health side, see the Accident & Health question set. Chapters 1 and 9 of the LanePrep Arizona course are free at /az/l-and-h/preview — full audio and the chapter quiz, no signup. For the full cost picture, see how much an Arizona Life & Health license costs.
Exam structure and fees from PSI's Arizona Candidate Information Bulletin (Rev. October 1, 2025). Content outline weights from PSI's Arizona Examination for Life, Accident and Health or Sickness Insurance Producer (Series 13-33) content outline, for the life sections. Pass rates from the NAIC 2024 and 2025 compiled pass-rate reports. Read October 2026.
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