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Free Virginia-Life-Annuities-and-Health-Insurance Exam Braindumps
Virginia Life, Annuities, and Health Insuranceination Series 1101 Questions 201–205 (page: 42)

Updated On: 10-Feb-2026
Page 42 of 89
PDF with 440 Questions

A mutual insurance company is wholly owned by its:

  1. Policyholders
  2. Shareholders
  3. Executive officers
  4. Board of directors

Answer(s): A

Explanation:

Mutual insurers are organized for the benefit of their policyholders, who are the owners of the company. Profits are returned to policyholders in the form of dividends or reduced premiums, unlike stock insurers which are owned by shareholders.

Exact Extract (Virginia Insurance Study Guide): "Mutual insurance company--owned by policyholders; profits distributed as dividends or premium reductions." Reference (Virginia Documents / Study Guide):
-- Virginia General Insurance Concepts Outline, Section 1.1 Types of insurers



The preventive medical care benefit sometimes provided in a Medicare supplement policy covers:

  1. Home health care
  2. Skilled nursing care
  3. Hospitalization
  4. Annual physical exams

Answer(s): D

Explanation:

Certain Medicare supplement policies in Virginia may include preventive benefits not fully covered by Medicare, such as annual physical exams. These benefits are limited and distinct from core Medicare Part A (hospitalization) and Part B (medical) services. Exact Extract (Virginia Medicare Supplement Study Guide): "Preventive medical care benefit may include annual physical exams and preventive screening tests, which are not part of basic Medicare coverage."
Reference (Virginia Documents / Study Guide):
-- Virginia Health Insurance Examination Outline, Medicare Supplement Provisions



Which one of the following statements about a decreasing term life insurance policy is true?

  1. The face amount of the policy remains constant throughout the policy period, but the premium decreases
  2. The face amount of the policy remains level for five years and then decreases during the remainder of the policy period
  3. The face amount of the policy decreases throughout the policy period
  4. The face amount of the policy increases during the policy period, but the premium decreases

Answer(s): C

Explanation:

A decreasing term policy provides a declining death benefit over the policy term, while premiums remain level. These policies are often used for mortgage protection, as the insurance amount reduces in line with the declining loan balance.
Exact Extract (Virginia Life Insurance Study Guide): "Decreasing term insurance--provides a level premium and a decreasing face amount throughout the term of coverage, often used for debt protection."
Reference (Virginia Documents / Study Guide):
-- Virginia Life & Annuities Examination Outline, Term Insurance



Which one of the following is a life insurance policy provision that keeps the policy in force for a time if the premium is NOT paid?

  1. Incontestability clause
  2. Conversion option clause
  3. Assignment provision
  4. Grace period provision

Answer(s): D

Explanation:

The grace period provision allows a policyholder a specified time (usually 31 days) after the due date to pay overdue premiums while coverage continues. If the insured dies during this period, the premium due is deducted from the policy proceeds.

Exact Extract (Virginia Policy Provisions Requirement): "Life insurance policies shall provide a grace period of not less than 31 days for the payment of premiums, during which the policy shall continue in force."
Reference (Virginia Documents / Study Guide):
-- Code of Virginia §38.2-3107 (Grace period in life insurance policies)



All of the following are advantages of whole life insurance EXCEPT:

  1. Policy loans may be available
  2. Long-term protection is provided
  3. The initial cost of coverage is lower than for an equivalent amount of term insurance
  4. There is a cash value if the policy is terminated after a sufficient period of time

Answer(s): C

Explanation:

Whole life insurance provides permanent coverage, builds guaranteed cash value, and allows for policy loans. However, it has a higher initial premium cost compared to term life insurance. Therefore, the statement that whole life has lower initial costs is incorrect. Exact Extract (Virginia Life Insurance Study Guide): "Whole life insurance provides long-term protection, guaranteed cash values, and policy loans. Premiums are higher than term insurance for equivalent coverage."
Reference (Virginia Documents / Study Guide):
-- Virginia Life & Annuities Insurance Examination Outline, Whole Life Characteristics



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