Virginia-Life-Annuities-and-Health-Insurance Exam Dumps - Insurance Licensing Virginia Insurance License Questions and Answers

False advertising regarding insurance policies involves exaggerating or misrepresenting information that could mislead consumers. Representing past dividends, benefits under the policy, or incorrectly describing an insurance policy as a share of stock are examples of false advertising. However, comparing policy benefits with a competitor’s benefits is generally permitted, as long as the comparison is truthful and not misleading.

Virginia Code § 38.2-4306 mandates that Health Maintenance Organizations (HMOs) provide comprehensive health services, including emergency care, as a core benefit. Emergency services must be available 24 hours a day, 7 days a week (option D) to ensure immediate access to life-saving treatment, aligning with federal and state standards (e.g., ACA requirements under 42 CFR § 422.113). This reflects the HMO’s obligation to cover urgent needs—e.g., a heart attack at 2 a.m.—via in-network facilities or out-of-network reimbursement if necessary. Option A (16 hours, 6 days) and Option B (16 hours, 7 days) fall short of the continuous access requirement, limiting coverage unreasonably. Option C (24 hours, 6 days) excludes one day, contradicting the nonstop mandate. The study guide likely emphasizes this 24/7 rule in an HMO benefits section, with examples like ER visits covered anytime, making D the correct standard. This ensures HMOs meet Virginia’s consumer protection goals under § 38.2-4300 et seq., distinguishing them from less comprehensive plans.

A beneficiary designation by class identifies beneficiaries as a group rather than by individual names. Common class designations include children, grandchildren, or surviving spouse. “All children of the insured” is a classic example because it includes all individuals who meet that description at the time of the insured’s death, even if the number of children changes over time. A specified parent, a named shareholder, or the insured’s estate are not class designations. The estate is a legal entity, not a class of individuals, and naming a specific person does not constitute a class designation.

Adjustable life insurance is specifically designed to provide flexibility in both face amount and premium structure, allowing policyowners to adapt coverage as financial needs and objectives change. This flexibility may include adjustments to death benefit levels and premium payments within policy limits.

Term life and modified premium whole life lack this degree of adaptability. Current assumption whole life allows interest rate sensitivity but does not permit the same broad adjustments to coverage structure.

Virginia licensing materials identify adjustable life as a hybrid policy combining features of term and whole life insurance, making option B the correct answer.

Misrepresentation occurs when an agent makes false, misleading, or incomplete statements about the terms, benefits, or conditions of an insurance policy that could influence a consumer’s decision to purchase coverage. This may involve exaggerating benefits, minimizing exclusions, or providing incorrect information. Misrepresentation is a prohibited practice under Virginia insurance law and can result in administrative penalties, license suspension, or revocation. Defamation involves false statements that harm another’s reputation and is unrelated to policy sales. Unfair discrimination refers to treating similar risks differently without actuarial justification. Coercion involves pressuring someone to buy insurance through threats or intimidation. Since misleading a potential insured directly concerns incorrect policy information, it constitutes misrepresentation.

Under the conversion option of a group life insurance plan, the insured can convert their coverage to an individual policy without requiring evidence of insurability. This means the individual does not need to prove they are in good health to convert their group coverage to a personal policy. The new policy's premium rate, coverage amount, and duration will vary based on the terms of the conversion option, but no proof of health is required for conversion.

Virginia Code § 38.2-510 regulates unfair claim settlement practices, enforced by the State Corporation Commission’s Bureau of Insurance—a state insurance department (option D). This includes timely claim processing and fair payment, with penalties for violations. Option A (IRS) oversees tax compliance, not insurance claims. Option B (NAIC) develops model laws and guidelines (e.g., Unfair Claims Settlement Practices Act), but lacks enforcement power; states adopt and regulate these standards. Option C (claims adjusters) are practitioners, not regulators. The study guide likely emphasizes Virginia’s Bureau as the authority, citing examples like investigating delayed claims, aligning with state-level oversight under § 38.2-200 et seq., making D the correct regulator.

Detailed Answer in Step-by-Step Solution:

Agents assist underwriting by collecting application data (A), obtaining additional info (C), and reporting material facts (D), but determining the final rate classification (B) is the insurer’s underwriter’s role, not the agent’s.

Rate classification involves risk assessment, which is beyond an agent’s authority.

The Virginia study guide specifies that agents facilitate underwriting by providing accurate information, while the insurer’s underwriters set rates based on that data. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Underwriting Process."

Most medical expense policies contain a war exclusion, denying benefits for losses resulting from war or military action. Auto accidents, sporting accidents, and tropical diseases are generally covered if not otherwise excluded.

Exact Extract (Virginia Health Insurance Study Guide): “Common exclusions include war, military service, self-inflicted injury, and experimental procedures.”

References (Virginia Documents / Study Guide):

— Virginia Health Insurance Examination Outline, Common Exclusions

Tax-sheltered annuities (TSAs), per IRC § 403(b) and Virginia Code § 38.2-3100 et seq., are retirement plans for nonprofit employees. Option A is true; they’re synonymous with 403(b) plans. Option B is true; contributions often come from voluntary salary reductions, tax-deferred until withdrawal. Option C is true; participants can have individual contracts or accounts. Option D is false; investment gains are tax-deferred, not included in gross income annually, only taxed upon distribution. The study guide highlights TSAs’ tax advantages, making D the incorrect statement.