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

Uniform policy provisions are mandated by law and cannot be deleted. Underwriting actions include issuing, rejecting, or adding riders. Exact extract: “Insurers may not delete or alter mandatory uniform provisions.”

A revocable beneficiary designation allows the policyowner to change beneficiaries at any time without the consent of the existing beneficiary. This right remains solely with the policyowner.

Exact Extract (Virginia Health Insurance Study Guide): “Revocable beneficiaries—policyowner retains the right to change the beneficiary designation at will.”

References (Virginia Documents / Study Guide):

— Virginia Life & Health Insurance Examination Outline, Beneficiary Designations

Detailed Answer in Step-by-Step Solution:

HMOs limit members to a pre-negotiated network of providers (B), restricting choice to control costs.

Non-network care (A) may be covered in emergencies, not always fully out-of-pocket. Options C (waive re-enrollment) and D (individual coverage) are not HMO features.

The Virginia study guide describes HMOs as managed care plans with a restricted provider network, emphasizing cost control through limited choice. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Managed Care Plans."

Twisting involves misrepresenting or making incomplete comparisons to induce a policyholder to replace an existing policy with one from another insurer, often to the client’s detriment.

Exact Extract (Virginia Unfair Trade Practices Law): “Twisting—making incomplete or misleading comparisons of policies to induce replacement.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-503 (Twisting prohibited)

The doctrine of reasonable expectations holds that insurance contracts will be interpreted as a reasonable person would expect, even if fine print suggests otherwise. Exact extract: “Under the principle of reasonable expectations, coverage is interpreted in line with what a prudent policyholder would believe was provided.” This prevents insurers from denying claims based on obscure or technical language.

Reinsurance is a legitimate risk management tool used between insurers. Misrepresentation, fraudulent advertising, and illegal inducements are specifically prohibited as unfair trade practices in Virginia.

Exact Extract (Virginia Unfair Trade Practices Act): “Unfair practices include misrepresentation, false advertising, and offering unlawful inducements. Reinsurance is not an unfair practice.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-500 et seq. (Unfair Trade Practices Act)

Virginia law obligates agents to act as fiduciaries with premiums collected and to promptly remit payments to the insurer. Exact extract: “An agent who accepts funds from an applicant shall hold such funds in a fiduciary capacity and shall promptly remit them to the insurer.”

Virginia Code § 38.2-3100 et seq. defines immediate annuities as contracts starting payments within one year of purchase, typically funded with a lump sum. Option C fits: retirees with savings (e.g., $200,000 from a 401(k)) buy immediate annuities for instant income. Option A (tax deduction) applies to contributions to qualified plans, not immediate annuities, which use after-tax funds unless from a rollover. Option B (tax-sheltered annuity) refers to 403(b) plans, not immediate annuities. Option D (accumulate funds) suits deferred annuities, not immediate ones. The study guide likely contrasts immediate (C) with deferred annuities (D), using examples like a 65-year-old converting a lump sum to monthly payments, making C the typical buyer.

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.

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.”

References (Virginia Documents / Study Guide):

— Virginia Health Insurance Examination Outline, Disability Riders