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Free Virginia-Life-Annuities-and-Health-Insurance Exam Braindumps
Virginia Life, Annuities, and Health Insuranceination Series 1101 Questions 211–215 (page: 44)

Updated On: 10-Feb-2026
Page 44 of 89
PDF with 440 Questions

When there is a misstatement of age by an applicant for a disability income policy:

  1. Any amount payable will be the amount of coverage the premium would have purchased at the insured's correct age
  2. The insurer is not liable for any claims made during the period before correction of the insured's age
  3. The company will cancel the policy immediately upon discovery of the misstatement of age
  4. The policy will be void from its inception because of the insured's misrepresentation

Answer(s): A

Explanation:

The misstatement of age provision adjusts benefits to reflect the correct age at which premiums should have been paid. The insurer does not void or cancel the policy; instead, it adjusts the coverage to the amount the paid premium would have purchased at the correct age. Exact Extract (Virginia Uniform Policy Provisions): "In the event of misstatement of age, benefits payable under the policy shall be adjusted to the amount the premium would have purchased at the correct age."
Reference (Virginia Documents / Study Guide):
-- Code of Virginia §38.2-3514 (Uniform individual accident and sickness policy provisions ­ Misstatement of age)



All of the following statements about life annuities are true EXCEPT:

  1. They provide for the systematic liquidation of a principal sum
  2. Benefit payments start after the annuitant's death
  3. They are a form of insurance since risk sharing is involved
  4. They can protect against outliving one's financial resources

Answer(s): B

Explanation:

Life annuities provide a stream of income during the annuitant's lifetime. Payments begin after the accumulation period (annuitization) and continue while the annuitant lives. They liquidate a principal sum systematically and protect against longevity risk by pooling risks across many annuitants. The incorrect statement is B, since benefits start while the annuitant is living, not after death. Exact Extract (Virginia Annuities Study Guide): "Life annuities are designed to provide income during the lifetime of the annuitant, liquidating principal systematically and protecting against outliving financial resources."
Reference (Virginia Documents / Study Guide):
-- Virginia Life & Annuities Examination Outline, Section 4.1 Annuity Principles



Which is true about the "bailout" feature sometimes found in single premium deferred annuity contracts?

  1. It waives surrender charges when the interest rate falls below a stated level
  2. It guarantees principal and interest in the event of insurer insolvency
  3. It allows return of the contract with full refund during the free-look period
  4. It permits splitting the contract when the annuitants become divorced

Answer(s): A

Explanation:

The bailout provision (also known as a "market-value adjustment escape clause") allows the annuity owner to surrender the contract without penalty if the credited interest rate falls below a certain guaranteed minimum. This protects the annuitant from being locked into low rates. Exact Extract (Virginia Annuities Study Guide): "Bailout provision--permits withdrawal of funds without surrender charges if the credited interest rate drops below a specified level." Reference (Virginia Documents / Study Guide):
-- Virginia Life & Annuities Examination Outline, Annuity Contract Features



Which statement is true of trade association groups eligible for group medical benefits?

  1. Members of the association are usually in the same industry
  2. Such associations are formed for the purpose of purchasing insurance
  3. The association membership primarily consists of large employers
  4. Employer contributions are usually waived

Answer(s): A

Explanation:

Group medical benefits may be offered through trade associations where members share a common professional or occupational interest. Associations must exist for purposes other than solely obtaining insurance. Therefore, the correct feature is that members are usually in the same industry. Exact Extract (Virginia Group Health Insurance Study Guide): "Trade association groups--members are engaged in the same type of business or industry and may be eligible for group medical coverage if the association is not formed solely for insurance purposes." Reference (Virginia Documents / Study Guide):
-- Virginia Health Insurance Examination Outline, Group Insurance Eligibility



An agent may be guilty of misrepresentation if the agent:

  1. Failed to disclose exclusions of the policy
  2. Denied a claim for failure of the policyholder to prove damages
  3. Required timely written notice of loss for all claims
  4. Issued a full settlement check expressly releasing the insurer

Answer(s): A

Explanation:

Misrepresentation occurs when an agent provides false, misleading, or incomplete information about a policy's terms, benefits, or exclusions. Failing to disclose exclusions leads the applicant to believe coverage exists when it does not. This is specifically prohibited under Virginia's Unfair Trade Practices laws.
Exact Extract (Virginia Unfair Trade Practices Act): "Misrepresentation includes any statement or omission of material fact, including failure to disclose policy limitations or exclusions." Reference (Virginia Documents / Study Guide):
-- Code of Virginia §38.2-502 (Misrepresentations and false advertising of policies)



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