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Free Virginia-Life-Annuities-and-Health-Insurance Exam Braindumps
Virginia Life, Annuities, and Health Insuranceination Series 1101 Questions 136–140 (page: 29)

Updated On: 10-Feb-2026
Page 29 of 89
PDF with 440 Questions

Needs analysis is a method of life insurance planning which:

  1. Identifies the needs of an individual and the individual's dependents
  2. Eliminates the need for estimating future interest and inflation rates
  3. Requires the team effort of the agent and home office underwriter
  4. Ignores Social Security benefit payments

Answer(s): A

Explanation:

Detailed Answer in Step-by-Step Solution:
Needs analysis (A) assesses an individual's and dependents' financial requirements (e.g., income replacement, debts) to determine appropriate life insurance coverage. It doesn't eliminate interest/inflation estimates (B), require underwriter collaboration (C), or ignore Social Security (D), which is often factored in.

The Virginia study guide describes needs analysis as a planning tool to calculate insurance needs based on personal and family financial obligations, including potential Social Security benefits.


Reference:

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



Who usually selects the beneficiary of a life insurance policy?

  1. The policyowner
  2. The insurer
  3. The beneficiary
  4. The agent

Answer(s): A

Explanation:

Detailed Answer in Step-by-Step Solution:
The policyowner (A) has the right to designate the beneficiary, as they control the policy's terms and ownership rights.
The insurer (B) issues the policy, the beneficiary (C) receives proceeds, and the agent (D) facilitates but doesn't decide.

The Virginia study guide confirms that the policyowner selects the beneficiary, exercising a fundamental ownership right, unless assigned otherwise.


Reference:

Virginia Life, Annuities, and Health Insurance study guide, section on "Beneficiary Designations."



Under which type of policy are benefit payments treated as taxable income?

  1. Business overhead expense
  2. Disability buy-sell
  3. Individual disability income
  4. Key person disability income

Answer(s): C

Explanation:

Detailed Answer in Step-by-Step Solution:
Individual disability income (C) benefits are taxable if the insured paid premiums with pre-tax dollars (e.g., employer-paid), but tax-free if paid with after-tax dollars. The question implies taxable benefits, typical when premiums are deductible.
Business overhead expense (A), disability buy-sell (B), and key person disability (D) benefits are generally tax-free to the business or recipient, as premiums are not deductible.

The Virginia study guide, per IRS rules, states that individual disability income benefits are taxable if premiums were paid pre-tax (e.g., by an employer), unlike business-related disability policies where benefits serve specific tax-exempt purposes.


Reference:

Virginia Life, Annuities, and Health Insurance study guide, section on "Taxation of Insurance Benefits."



Long-term care insurance policies may exclude coverage for all of the following EXCEPT:

  1. War and acts of war
  2. Alcohol and drug dependency
  3. Self-inflicted injury
  4. Senile dementia

Answer(s): D

Explanation:

Virginia's long-term care (LTC) rules allow certain exclusions (e.g., war, alcoholism/drug addiction, intentionally self-inflicted injury) but prohibit disease-specific exclusions for conditions like Alzheimer's or senile dementia. Exact extract: "No long-term care insurance policy or certificate may exclude or limit coverage for Alzheimer's disease, senile dementia, organic brain disorder, or other demonstrable organic disease." Permitted exclusions include: "loss resulting from war or act of war," "alcoholism and drug addiction," and "intentionally self-inflicted injury."


Reference:

Virginia Administrative Code, Rules Governing Long-Term Care Insurance, Limitations and Exclusions (14VAC5-200--- section on prohibited disease-specific exclusions and permitted exclusions); Virginia Administrative Code, Long-Term Care--Policy Standards.
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Which of the following is NOT considered an "advertisement" for Accident and Sickness Insurance?

  1. Newspaper advertisement with the insurer's name
  2. A general announcement from an employer to its employees regarding group coverage
  3. Literature presented on the insurer's website
  4. Insurance illustrations

Answer(s): B

Explanation:

Virginia adopts the Accident and Sickness advertising standards that define "advertisement" broadly (print, online, audiovisual, etc.), but specifically carve out employer announcements about available group coverage. Exact extract: "Advertisement means any printed, published, audio/visual, or descriptive literature used to solicit the public... including material on an insurer's website." "The term does not include general announcements by an employer to its employees that a plan of coverage is available."


Reference:

Virginia Administrative Code, Rules Governing Advertising of Accident and Sickness Insurance (14VAC5-90--definitions of "advertisement" and listed exclusions).
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