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Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam
Virginia Life, Annuities, and Health Insuranceination Series 1101 (Page 11 )

Updated On: 4-Feb-2026
Page 11 of 89
PDF with 440 Questions

All of the following are dividend options in life insurance policies EXCEPT:

  1. Applying the dividends to reduce the premium due
  2. Using the dividends to purchase additional paid-up life insurance
  3. Accumulating the dividends with interest
  4. Receiving the entire policy cash value

Answer(s): D

Explanation:

Virginia Code § 38.2-3207 allows participating life policies to offer dividend options: option A (reduce premium), option B (buy paid-up additions increasing coverage), and option C (accumulate with interest) are standard, reflecting insurer profits shared with policyowners. Option D (receiving the entire cash value) isn't a dividend option; it's a surrender or nonforfeiture action, terminating the policy, not distributing profits. The study guide likely lists these options with examples--e.g., $100 dividend reducing a $500 premium (A)--contrasting them with cash value withdrawal, making D the exception.



Coverage under a cancelable health insurance policy may be terminated by:

  1. The insurer only
  2. The insured only
  3. Either the insured or the insurer
  4. An arbitration committee

Answer(s): C

Explanation:

Virginia Code § 38.2-3508 defines a cancelable health policy as one either party--the insured or insurer--can terminate before its term ends, with notice (e.g., 30 days). Option C reflects this mutual right. Option A (insurer only) and option B (insured only) are too restrictive; cancelable policies aren't unilateral. Option D (arbitration committee) isn't a standard mechanism; cancellation follows policy terms, not third-party rulings. The study guide likely contrasts cancelable with non-cancelable policies, using examples like an insurer canceling for nonpayment or an insured canceling due to better rates, making C the correct scope.



Which benefit is usually excluded from major medical plan coverage?

  1. Hospital expense
  2. Custodial care
  3. Physicians' visits
  4. Surgical expense

Answer(s): B

Explanation:

Virginia Code § 38.2-3500 et seq. governs major medical plans, which cover catastrophic costs like hospital expenses (option A), physicians' visits (option C), and surgical expenses (option D). Option B (custodial care)--non-medical assistance with daily living (e.g., bathing)--is typically excluded, as it's not "medically necessary" under standard definitions (Virginia Code § 38.2-3407.10). The study guide likely lists inclusions (A, C, D) with examples--e.g., $5,000 for surgery--versus exclusions like custodial care, covered by LTC policies instead, making B the usual exception.



Which of these is true of a conditionally renewable individual health contract?

  1. A covered individual's health status may be a condition for renewal
  2. Premiums are guaranteed as long as renewal conditions are met
  3. The insurer may refuse renewal if they move outside of the stated geographical location
  4. The insurer may change the conditions of renewability at any time

Answer(s): A

Explanation:

Virginia Code § 38.2-3508 allows conditionally renewable health policies, where renewal isn't guaranteed and depends on insurer-specified conditions. Option A is true; health status (e.g., new chronic illness) can be a renewal condition, unlike guaranteed renewable policies. Option B is false; premiums can increase based on risk, not guaranteed. Option C is incorrect; geographic moves typically don't void renewability unless specified, but health status is more common. Option D is wrong; conditions are set at issuance, not altered arbitrarily. The study guide likely contrasts this with guaranteed renewable policies, using examples like non-renewal for worsening health, making A the true statement.



Under Virginia standards for marketing long-term care coverage, all of these are prohibited sales practices EXCEPT:

  1. Twisting
  2. Replacing existing coverage
  3. High pressure tactics
  4. Cold lead advertising

Answer(s): D

Explanation:

Virginia Code § 38.2-5207 and 14VAC5-200-185 outline marketing standards for long-term care (LTC) insurance to protect consumers. Option A (twisting)--misrepresenting a policy to induce replacement--is prohibited as an unfair practice (Virginia Code § 38.2-502). Option C (high pressure tactics)--aggressive sales forcing quick decisions--violates ethical standards and is banned (14VAC5- 200-40). Option B (replacing existing coverage) is incorrect as stated; replacement itself isn't prohibited but requires disclosure via a replacement notice (14VAC5-200-75), making it regulated, not banned outright--however, the question implies unauthorized or deceptive replacement, which is prohibited. Option D (cold lead advertising)--soliciting via broad, unsolicited leads (e.g., mailers)-- is permitted if it complies with disclosure rules and isn't deceptive (14VAC5-200-50). The study guide likely lists twisting and high pressure as unethical, with examples like misstating benefits, while allowing cold lead ads with proper labeling (e.g., "advertisement"), making D the exception.



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