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

The misstatement of age provision adjusts benefits to reflect the correct age at which premiums should have been paid. The insurer does not void or cancel the policy; instead, it adjusts the coverage to the amount the paid premium would have purchased at the correct age.

Exact Extract (Virginia Uniform Policy Provisions): “In the event of misstatement of age, benefits payable under the policy shall be adjusted to the amount the premium would have purchased at the correct age.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-3514 (Uniform individual accident and sickness policy provisions – Misstatement of age)

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."

Employees under group life plans receive certificates of insurance summarizing coverage, not full policies. Exact extract: “Each employee insured under a group life policy shall be given a certificate of insurance describing coverage.”

The gatekeeper system requires primary care physician approval for specialist referrals or hospital services, controlling use of services. Exact extract: “The gatekeeper concept requires members to seek primary physician approval for specialized or expensive services, thereby controlling utilization.”

Detailed Answer in Step-by-Step Solution:

The accumulation period (D) is the phase in a deferred annuity where premiums are paid to build value before payouts begin.

The liquidation period (A) is not a standard term here; it might imply payout but isn’t correct.

The annuity period (B) is when payments are received, not paid.

Period certain (C) refers to a payout option, not premium payment phase.

The Virginia study guide defines the accumulation period as the time during which premium payments are made into a deferred annuity, accumulating value until the payout phase. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Annuities."

Universal life (Virginia Code § 38.2-3113.1) features: Option A is true; a mortality charge funds the death benefit, deducted monthly from cash value. Option B is true; expense charges are disclosed (e.g., admin fees). Option D is true; loans reduce the cash value earning interest. Option C is false; death benefits are generally tax-free under IRC § 101(a)(1), not ordinary income, unless an exception (e.g., transfer for value) applies, which isn’t standard. The study guide likely contrasts universal life mechanics—e.g., $50 monthly mortality charge—with tax-free benefits, making C the exception.

Moral hazard refers to the increased chance of loss due to the insured’s dishonesty or fraudulent intent. Examples include exaggerating claims or intentionally causing loss.

Exact Extract (Virginia Insurance Fundamentals Study Guide): “Moral hazard—hazard arising from dishonesty or lack of integrity of the insured, such as filing fraudulent claims.”

References (Virginia Documents / Study Guide):

— Virginia General Insurance Concepts Outline, Risk and Hazards

Most medical expense policies exclude elective cosmetic procedures unless medically necessary. Exact extract: “Policies may exclude benefits for cosmetic surgery unless required to correct accidental injury or congenital defect.”

Virginia small-group medical insurance disclosure rules require insurers to inform policyholders of renewability provisions, available benefits, and rights related to premium rate increases. However, insurers are not required to disclose their business operating expenses. Exact extract: “At the request of the policyholder, the insurer shall disclose the insurer’s right to increase premium rates, the renewability provisions, and all available benefits.”