Arizona Life Study Guide

Arizona’s life provisions start from the standard NAIC playbook — then hide their exam points in the exceptions: an age-banded annuity free look, a suicide clause that shrinks for death-benefit increases, and a life-settlement regime with its own license. If you learn the baseline and the four places Arizona bends it, you own this part of the exam.

The standard provisions — learn the baseline first

Arizona individual life policies carry a 2-year incontestability period (from the date of issue, during the insured’s lifetime, with nonpayment of premium always excepted), a 30-day grace period that — worth underlining — does not vary by premium mode, and a 3-year reinstatement window from premium default, with interest on arrears capped at 6% compounded annually. The required nonforfeiture options are the classic three: cash surrender value, reduced paid-up insurance, and extended term insurance.

The suicide clause — one number that splits in two

The suicide exclusion runs 2 years maximum after issue or reinstatement — standard. Arizona’s wrinkle: for an increase in the death benefit, the exclusion is only 1 year, and it applies only to the increase itself. A question pairing “suicide” with “increase” is testing exactly this.

Free looks — Arizona goes age-banded

Annuity buyers get a 10-day free look — but 30 days if the contract holder is 65 or older on the application date, and the notice must appear on the contract’s first page and on the application. When a policy or annuity is being replaced, the free look is 30 days for both products, with an unconditional full refund of all premiums. Long-term care and Medicare supplement each carry their own 30-day free look.

Variable products — a separate line, no separate exam

Variable Life and Variable Annuity Products is its own Arizona line of authority. There is no additional state exam for it, but it can only be added if you already hold life producer authority (your FINRA registrations ride alongside). The exam likes the structure: life first, variable second, never variable alone.

Life settlements — Arizona regulates the secondary market

Arizona has a full Life Settlements Act (ARS Title 20, Chapter 19, beginning at §20-3201). The owner who sells a policy may rescind within 15 days of execution and delivery of all disclosures, repaying proceeds and premiums. Brokering these transactions takes a distinct Life Settlement Broker license ($500) — which itself requires life producer authority.

Annuity sales — best interest, by statute

Arizona adopted the NAIC best-interest standard for annuity recommendations — and put it in statute, not regulation: the producer must act in the consumer’s best interest “without placing the producer’s or the insurer’s financial interest ahead of the consumer’s.” Completing the state’s best-interest training is a prerequisite to selling annuities at all.