State RegulationsAZ specificDifficulty 2/5
To win a life insurance application in Scottsdale, a producer offers the prospect entry into a drawing for a vacation package worth $400, open only to applicants. Under A.R.S. 20-449, this offer is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A.R.S. 20-449 prohibits prizes with a value over $100 offered in connection with life or disability insurance, so a $400 vacation drawing is a prohibited inducement regardless of who funds it, whether it is customary, or whether the sale is ever completed.
Why the other options are wrong
- A) Customary marketing practice does not override the statutory prize ceiling in A.R.S. 20-449.
- B) Funding by the agency rather than the insurer does not matter; the prohibition reaches producer-funded inducements.
- C) The prohibition attaches to the offer itself, not to whether the sale is later completed or the prize awarded.
Memory hook
Prize over $100? Prohibited — even a raffle ticket is too rich.