2026 Valid Virginia-Life-Annuities-and-Health-Insurance test answers & Virginia Insurance Exam PDF
Free Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam Questions and Answer from Training Expert DumpsMaterials
NEW QUESTION # 110
All of the following have a restricted ability to enter into a contract EXCEPT:
- A. Individuals who are mentally ill
- B. Minors under a certain age
- C. Individuals who are intoxicated
- D. Individuals who are retired
Answer: D
Explanation:
Virginia contract law, reflected in Virginia Code § 38.2-102, requires capacity to form an insurance contract.
Option A (intoxicated individuals) lacks capacity if impaired, voiding consent. Option B(mentally ill individuals) may lack comprehension, restricting ability unless adjudicated competent. Option C (minors, typically under 18 per § 38.2-3405) can't contract without guardian consent, except for necessities. Option D (retired individuals) has no legal restriction; retirement is a status, not a capacity limiter-e.g., a 65-year-old retiree can buy insurance freely. The study guide likely covers capacity in a legal basics section, with examples like a drunk person's void policy versus a retiree's valid one, making D the exception.
NEW QUESTION # 111
(Under which marketing system do insurers solicit customers by mass media advertising and mail without the services of an agent?)
- A. Contingent
- B. Direct response
- C. Captive agent
- D. Branch office
Answer: B
Explanation:
The direct response marketing system involves insurers selling insurance directly to consumers through mass media advertising, mail, telephone, or internet communication, without using insurance agents. This system relies on advertisements that invite prospects to apply directly to the insurer.
Branch office and captive agent systems involve licensed agents who represent the insurer. Contingent systems are related to compensation structures, not distribution methods.
Virginia licensing standards identify direct response marketing as a legitimate method of insurance distribution, with the insurer assuming responsibility for underwriting, policy issuance, and customer service. Because no agent is involved, commissions are typically not paid, which can lower policy costs.
NEW QUESTION # 112
Fixed annuities credit interest at a rate no lower than the:
- A. Current prime rate
- B. Expected renewal interest rate
- C. Front-end load rate
- D. Contract guaranteed rate
Answer: D
Explanation:
Fixed annuities are designed to credit interest at a rate that is no lower than the contract's guaranteed rate. This guaranteed rate is specified at the time of the contract and ensures that the policyholder will receive at least this minimum interest rate, regardless of market conditions. The fixed annuity's interest rate can be higher depending on the insurer's performance, but it cannot fall below the guaranteed rate.
NEW QUESTION # 113
An insured with a long-term care (LTC) policy knowingly and intentionally misrepresented relevant facts relating to the insured's health. How long does an insurer have to contest the coverage?
- A. Any time during the duration of the policy
- B. The insurer is prohibited from contesting the coverage
- C. Any time up to six months
- D. Any time up to two years
Answer: D
Explanation:
Detailed Answer in Step-by-Step Solution:
* The incontestability provision in LTC policies typically limits the insurer's ability to contest coverage based on misrepresentations to two years (B) from issuance, unless fraud is proven (which may extend this in some states).
* Option A (six months) is too short. Option C (entire duration) applies only to fraud in some cases, not standard misrepresentations. Option D (prohibited) is incorrect due to the contestable period.
The Virginia study guide, aligned with NAIC standards, notes a two-year contestable period for health-related policies like LTC, after which misrepresentations cannot be challenged absent fraud. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Incontestability."
NEW QUESTION # 114
In an individual disability income insurance policy, the waiver of premium rider:
- A. Usually is restricted to total disabilities from accidental bodily injuries
- B. Waives future premiums after a given period of continuing total disability
- C. Enables the insurer to raise the premium of the entire occupational class
- D. Excludes workers' compensation coverage
Answer: B
Explanation:
The waiver of premium rider allows the insured to stop paying premiums while disabled. After a specified waiting period (typically 90 days), premiums are waived for as long as the disability continues.
Exact Extract (Virginia Disability Study Guide): "Waiver of premium-after a period of total disability, future premiums are waived while benefits remain payable." Reference (Virginia Documents / Study Guide):
- Virginia Health Insurance Examination Outline, Disability Riders
NEW QUESTION # 115
What is the primary role of medical expense and disability insurance?
- A. Payment for rehabilitation costs following a life-threatening injury
- B. Provision for dismemberment benefits
- C. Protection against the costs of medical care and the loss of earning power
- D. Payment of death benefits
Answer: C
Explanation:
Detailed Answer in Step-by-Step Solution:
* Medical expense insurance covers healthcare costs, while disability insurance replaces lost income, together protecting against medical costs and earning power loss (B).
* Death benefits (A) are for life insurance. Dismemberment (C) is specific to AD&D. Rehabilitation (D) may be included but isn't primary.
The Virginia study guide defines the core purpose of medical expense and disability insurance as mitigating financial loss from healthcare and income interruption. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Health Insurance Basics."
NEW QUESTION # 116
All of the following statements about tax-sheltered annuities (TSAs) are true EXCEPT:
- A. An employee's rights under the contract are nonforfeitable
- B. Only employees of certain tax-exempt organizations may participate
- C. The employee issues periodic personal checks to purchase the contract
- D. The employee is normally the applicant, owner, and annuitant under the contract
Answer: C
Explanation:
Tax-sheltered annuities (403(b) plans) are funded by employer salary reduction agreements, not personal checks written directly to the insurer. Eligible participants are employees of nonprofit or educational institutions. Exact extract: "Contributions to tax-sheltered annuities are made by salary reduction agreements; employees of public schools and nonprofit organizations are eligible." Reference:
NEW QUESTION # 117
When a health insurer requires a covered individual to undergo a physical examination, who pays the cost of the examination?
- A. The patient or parent of the patient
- B. The principal insured individual
- C. The premium payor
- D. The insurer
Answer: D
Explanation:
Detailed Answer in Step-by-Step Solution:
* If a health insurer requires a physical exam (e.g., for underwriting or claims), the insurer pays the cost (D), as it's their condition for coverage or payment.
* The premium payor (A), insured (B), or patient (C) aren't responsible for insurer-mandated exams.
The Virginia study guide specifies that insurer-required exams, such as for contesting claims, are at the insurer's expense, per the physical examination provision. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Health Insurance Policy Provisions."
NEW QUESTION # 118
A licensee is NOT required by Virginia law to keep which of the following records?
- A. Premium quotations of unissued policies
- B. Policy renewal notices
- C. Files of insurance applications on current policies issued
- D. Accounting records of premium payments
Answer: A
Explanation:
Virginia Code § 38.2-1809 mandates that licensees maintain specific records for regulatory oversight and consumer protection. Option A (accounting records of premium payments) is required to track funds received and remitted, ensuring financial accountability (e.g., premiums collected for a $1,000 policy). Option B (files of insurance applications on current policies) must be kept as part of the contract and for audit purposes, per § 38.2-1810. Option C (policy renewal notices) is required to document communication with policyholders about ongoing coverage, ensuring transparency. Option D (premium quotations of unissued policies) is not mandated; while agents may provide quotes (e.g., $500 annually for a term policy), these are preliminary offers, not binding until a policy is issued, and Virginia law doesn't require retaining them unless they result in a transaction. The study guide likely details recordkeeping in a compliance chapter, contrasting required records (A, B, C) with optional ones like quotes (D), using examples-e.g., keeping a paid policy's file but not a rejected quote-making D the item not required. This reflects Virginia's focus on executed contracts over prospective ones.
NEW QUESTION # 119
If a patient with a preferred provider organization (PPO) chooses to use a non-PPO provider, the patient usually can expect:
- A. To pay the full cost of care
- B. 100% reimbursement for the service provided
- C. To have higher out-of-pocket expenses
- D. A one-year waiting period before re-enrolling in the PPO
Answer: C
Explanation:
Detailed Answer in Step-by-Step Solution:
* In a PPO, using a non-PPO provider (out-of-network) leads to higher out-of-pocket expenses (A) due to lower reimbursement rates and potential excess charges.
* Option B (full cost) is inaccurate; some coverage applies. Option C (100% reimbursement) is false.
Option D (waiting period) is unrelated.
The Virginia study guide reiterates that PPOs cover out-of-network care but at a reduced level, increasing the insured's costs compared to in-network use. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Managed Care Plans."
NEW QUESTION # 120
Which of the following is an advantage of term life insurance?
- A. The initial premium is lower than for an equivalent amount of whole life insurance
- B. It will be cost-effective in the long term if it is maintained to age 65 and beyond
- C. It provides insurance protection on a permanent basis
- D. The cost is about the same as whole life insurance
Answer: A
Explanation:
Detailed Answer in Step-by-Step Solution:
* Term life insurance's primary advantage is its lower initial premium (D) compared to whole life for the same death benefit, due to its temporary nature and lack of cash value.
* Option A (same cost) is false; term is cheaper. Option B (cost-effective long-term) is incorrect; premiums rise with renewals. Option C (permanent) applies to whole life, not term.
The Virginia study guide highlights that term life insurance offers affordable initial premiums for temporary coverage, making it attractive for short-term needs compared to whole life. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Types of Life Insurance."
NEW QUESTION # 121
Which contract provides an income benefit until the first of two annuitants dies?
- A. A temporary annuity
- B. A single life annuity
- C. A joint and survivor annuity
- D. A joint life annuity
Answer: D
Explanation:
Virginia Code § 38.2-3100 et seq. governs annuities. A joint life annuity (option C) pays income until the first of two annuitants dies, then ceases-ideal for temporary dual coverage. Option A (joint and survivor annuity) continues payments until the last survivor dies, not stopping at the first death. Option B (temporary annuity) pays for a fixed term (e.g., 10 years), regardless of death, and isn't tied to two lives. Option D (single life annuity) covers one person until their death, not two. The study guide likely defines these with examples-e.
g., a couple receiving $1,000 monthly until one dies (joint life) versus until both die (joint and survivor)- highlighting C's "first death" cutoff, making it the correct answer.
NEW QUESTION # 122
In a deferred annuity, which contract feature begins at a high level, often 5%-10%, and then diminishes until it disappears after a specified number of years?
- A. The surrender charge
- B. The front end sales load
- C. The guaranteed interest rate
- D. The expense charge
Answer: A
Explanation:
Virginia Code § 38.2-3100 et seq. governs deferred annuities, where a surrender charge (option A) is a penalty for early withdrawal, starting high (e.g., 7-10%) and declining over a surrender period (e.g., 7-10 years) until it reaches zero. Option B (front-end sales load) is a one-time fee deducted upfront, not diminishing over time. Option C (guaranteed interest rate) is a fixed return (e.g., 2%), stable or adjustable, not disappearing. Option D (expense charge) covers ongoing costs (e.g., mortality and expense fees), typically level, not phased out. The study guide likely illustrates this with a table-e.g., 10% year 1, 9% year 2, 0% year 10-emphasizing surrender charges as a liquidity deterrent, making A the matching feature.
NEW QUESTION # 123
When a health insurer requires a covered individual to undergo a physical examination, who chooses the examining physician?
- A. The patient or parent of the patient
- B. The principal insured individual
- C. The premium payor
- D. The insurer
Answer: D
Explanation:
When a health insurer requires a physical examination, the insurer typically has the right to choose the examining physician. This is because the insurer is the one paying for the examination as part of the claims or underwriting process, ensuring that the exam is conducted by a professional selected by the insurance company. While the insured may be asked for preferences in some cases, the final decision is generally up to the insurer.
Reference:
NEW QUESTION # 124
When an HIV test is requested by a health insurer, who signs the consent form?
- A. The insurance agent
- B. The applicant
- C. The applicant's physician
- D. The medical laboratory technician
Answer: B
Explanation:
When an HIV test is requested by a health insurer, the applicant must sign the consent form. This ensures that the insured is aware of the test and agrees to its administration. The insurance agent, physician, or medical laboratory technician are not required to sign the consent, though they may be involved in administering or facilitating the test.
NEW QUESTION # 125
What is a situation or condition that increases the likelihood of an insured loss occurring?
- A. Risk
- B. Exposure
- C. Peril
- D. Hazard
Answer: D
Explanation:
In insurance terminology, per Virginia Code § 38.2-100 et seq., a hazard (option A) is a condition increasing the likelihood or severity of a loss from a covered peril (e.g., smoking increases fire risk). Option B (peril) is the cause of loss (e.g., fire, theft). Option C (exposure) is the extent of potential loss, not the condition itself. Option D (risk) is the broader uncertainty of loss, encompassing hazards and perils. The study guide likely differentiates these with examples-e.g., icy roads (hazard) causing a crash (peril)-highlighting hazard's role in amplifying loss probability, making A the exact match.
NEW QUESTION # 126
(The State Corporation Commission may suspend an agent's license when the agent:)
- A. Changes a premium trust account location without notifying the State Corporation Commission
- B. Fails to report annual commission earnings to the State Corporation Commission
- C. Rebates a portion of the commission to the insured
- D. Shares commissions with similarly licensed agents
Answer: C
Explanation:
Rebating-the act of returning a portion of commission or offering inducements not specified in the policy-is prohibited under Virginia insurance law. Engaging in rebating is considered an unfair trade practice and is grounds for disciplinary action, including license suspension.
Sharing commissions with properly licensed agents is allowed. There is no requirement to report annual commission earnings, and administrative changes such as account location updates may require notice but are not suspension-level violations. Therefore, option B is correct.
NEW QUESTION # 127
An individual currently owns a long-term care policy. At the time of application for similar coverage, which item must be signed by the applicant and retained by the insurer?
- A. A replacement notice
- B. A substitution notice
- C. A cancellation notice
- D. A duplication notice
Answer: A
Explanation:
Virginia Code § 38.2-5207.1 and 14VAC5-200-75 regulate replacement of long-term care (LTC) insurance, requiring a replacement notice when an applicant with existing coverage applies for a new policy that may replace it. This signed notice, provided to the applicant and retained by the insurer, ensures transparency about potential duplication or lapse of the original policy, protecting consumers from unintended coverage gaps or costs. Option C (replacement notice) fits this requirement. Option A (cancellation notice) relates to terminating a policy, not applying for a new one. Option B (substitution notice) isn't a standard term; "replacement" is the legal phrase. Option D (duplication notice) might imply overlap but lacks regulatory specificity. The study guide likely includes a sample replacement form, stressing its role in LTC sales compliance, confirming C as the correct choice.
NEW QUESTION # 128
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