Free Annuities Study Guide
Arizona Life exam — Annuities.
Annuity concepts are in the national Annuities guide. Arizona adds a free look that rises to 30 days for buyers 65 and older, a best interest standard, training, and recordkeeping rules (A.R.S. 20-1233, 20-1243 and following).
Free look (20-1233)
| Buyer | Right to return |
|---|---|
| Under 65 on the application date | 10 days after delivery, with a refund of all money paid |
| 65 or older on the application date | 30 days after delivery |
For a variable annuity, the refund is premiums not allocated to separate accounts plus the value of separate-account amounts on the date the contract is returned.
A replacing annuity carries a 30-day right to return (20-1241.05).
Grace period (20-1219)
An individual annuity with periodic payments must allow a grace period of one month, but not less than 30 days.
Best interest standard (20-1243.03)
A producer recommending an annuity must act in the consumer's best interest and may not put the producer's or insurer's financial interest first. The standard has four obligations: care, disclosure, conflict of interest, and documentation.
- It does not create a fiduciary obligation. It also doesn't require recommending the lowest-cost product.
- Disclosure is made on the prescribed form. It covers the relationship, the products the producer may sell, the insurers represented, and the sources and types of compensation.
- For an exchange or replacement, the producer considers surrender charges, lost benefits, and fees. The producer also considers whether the consumer had another exchange or replacement in the past 60 months.
- If a consumer refuses to give profile information, the producer gets a consumer-signed statement documenting the refusal.
- Records are kept at least five years after the transaction (20-1243.06).
Training (20-1243.07)
- A producer with the life line completes a one-time 4-credit-hour annuity course before selling annuities.
- The course may not include marketing, sales techniques, or insurer-specific products.
- The insurer must verify completion.
Licensing and guaranty protection
- Variable annuities require the variable life and variable annuity line plus securities registration (20-286(A)(5)).
- The Arizona Life and Disability Insurance Guaranty Fund covers annuity present value up to $250,000. Separate-account values where the owner bears the risk are not covered (20-682).
Common exam traps
- The annuity free look is 10 days, or 30 days at age 65 or older.
- Best interest is not a fiduciary duty.
- Records are kept five years.
- The training course is 4 hours, and the insurer verifies it.
Practice Annuities questions All Life topics
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
