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Free Virginia-Life-Annuities-and-Health-Insurance Exam Braindumps
Virginia Life, Annuities, and Health Insuranceination Series 1101 Questions 131–135 (page: 28)

Updated On: 10-Feb-2026
Page 28 of 89
PDF with 440 Questions

A qualified plan participant elected a trustee-to-trustee transfer of rollover funds instead of personally receiving the funds and then rolling them over. This election permits the participant to:

  1. Avoid mandatory income tax withholding on the amount transferred
  2. Eliminate the possibility of funds being lost in the mail
  3. Significantly reduce the amount of time required for the transaction
  4. Eliminate the penalty tax that normally applies to rollover funds

Answer(s): A

Explanation:

Detailed Answer in Step-by-Step Solution:
A trustee-to-trustee transfer (A) avoids the 20% mandatory tax withholding required when funds are distributed to the participant and rolled over within 60 days. Options B (lost funds) and C (time) are incidental, not primary benefits. Option D (penalty tax) is irrelevant; rollovers aren't penalized if timely.

The Virginia study guide, per IRS rules, notes that direct trustee-to-trustee transfers bypass withholding, preserving the full amount for reinvestment.


Reference:

Virginia Life, Annuities, and

Health Insurance study guide, section on "Retirement Plans."



The entire contract clause in a life insurance policy states that the complete contract between the insurer and the policyowner usually consists of the policy and the:

  1. Conditional premium receipt
  2. Attached application
  3. Waiver of premium rider
  4. Declaration page

Answer(s): B

Explanation:

Detailed Answer in Step-by-Step Solution:
The entire contract clause includes the policy and the attached application (B), ensuring all terms and representations are part of the agreement.
The premium receipt (A) is temporary, the waiver rider (C) is optional, and the declaration page (D) is part of the policy, not separate.

The Virginia study guide states that the entire contract provision encompasses the policy and attached application, defining the full legal agreement.


Reference:

Virginia Life, Annuities, and Health Insurance study guide, section on "Life Insurance Policy Provisions."



Under the notice of claim provision, notice given to a health insurance company's agent is:

  1. An incomplete preliminary notice of claim
  2. Notice to the company
  3. Not valid notice to the company
  4. Contrary to the uniform mandatory provisions

Answer(s): B

Explanation:

Detailed Answer in Step-by-Step Solution:
The notice of claim provision typically deems notice to an agent as notice to the company (B), as agents act on the insurer's behalf.
Options A (incomplete), C (not valid), and D (contrary) contradict standard practice unless the policy specifies otherwise.

The Virginia study guide, per NAIC model laws, confirms that notice to an agent satisfies the notice of claim requirement, equating it to notice to the insurer.


Reference:

Virginia Life, Annuities, and Health Insurance study guide, section on "Health Insurance Claims Provisions."



When a health insurer requires a covered individual to undergo a physical examination, who pays the cost of the examination?

  1. The premium payor
  2. The principal insured individual
  3. The patient or parent of the patient
  4. The insurer

Answer(s): 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."



Giving policyholders some part of the agent's commission as an inducement to purchase insurance is an unfair trade practice known as:

  1. Twisting
  2. Rebating
  3. Replacement
  4. Retention

Answer(s): B

Explanation:

Detailed Answer in Step-by-Step Solution:
Rebating (B) is the illegal practice of offering a portion of an agent's commission or other financial incentives to induce a sale, prohibited in most states, including Virginia, to ensure fair competition. Twisting (A) involves misrepresenting policies to replace existing coverage. Replacement (C) is switching policies, not necessarily with a rebate. Retention (D) is not a recognized term here.

The Virginia study guide defines rebating as an unfair trade practice under Virginia insurance law, aimed at preventing agents from undercutting prices with commission kickbacks.


Reference:

Virginia

Life, Annuities, and Health Insurance study guide, section on "Unfair Trade Practices."



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