Virginia-Life-Annuities-and-Health-Insurance Exam Questions and Answers (Page: 4)

QUESTION: 25

An individual currently owns a long-term care policy. At the time of application for similar coverage, which item must be signed by the applicant and retained by the insurer?

A cancellation notice
A substitution notice
A replacement notice
A duplication notice

Answer(s): C

Explanation:

Virginia Code § 38.2-5207.1 and 14VAC5-200-75 regulate replacement of long-term care (LTC) insurance, requiring a replacement notice when an applicant with existing coverage applies for a new policy that may replace it. This signed notice, provided to the applicant and retained by the insurer, ensures transparency about potential duplication or lapse of the original policy, protecting consumers from unintended coverage gaps or costs. Option C (replacement notice) fits this requirement. Option A (cancellation notice) relates to terminating a policy, not applying for a new one. Option B (substitution notice) isn't a standard term; "replacement" is the legal phrase. Option D (duplication notice) might imply overlap but lacks regulatory specificity. The study guide likely includes a sample replacement form, stressing its role in LTC sales compliance, confirming C as the correct choice.

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QUESTION: 26

The benefit supplement attached to a life insurance policy which insures all members of a family is called a:

Spouse term rider
Children's term rider
Family term rider
Survivorship term rider

Answer(s): C

Explanation:

Virginia Code § 38.2-3109 allows life insurance riders to extend coverage. A family term rider (option C) attaches to a primary policy (e.g., the breadwinner's) and provides term insurance for all family members--spouse and children--under one supplement, often with a single premium. Option A (spouse term rider) covers only the spouse, not children. Option B (children's term rider) insures only children, excluding the spouse. Option D (survivorship term rider) isn't a standard term; "survivorship" typically refers to joint life policies paying at the second death, not family coverage. The study guide likely describes the family term rider as a cost-effective way to insure dependents, with examples showing level term benefits for each member, making C the accurate answer.

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QUESTION: 27

Keogh plans are also known as:

Section 457 plans
HR 10 plans
403(b) plans
Section 2503(c) trusts

Answer(s): B

Explanation:

Keogh plans, established under the Internal Revenue Code, are retirement plans for self-employed individuals and small businesses, also known as HR 10 plans (option B) after the 1962 legislation (H.R. 10) creating them. They allow tax-deferred contributions, similar to qualified plans. Option A (Section 457 plans) applies to government and nonprofit employees, not self-employed individuals. Option C (403(b) plans) is for nonprofit employees (e.g., teachers), distinct from Keogh's self- employed focus. Option D (Section 2503(c) trusts) relates to gifting for minors, not retirement. The study guide likely contrasts Keogh (HR 10) with other plans in a retirement section, noting its tax benefits and eligibility, confirming B as the correct synonym.

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QUESTION: 28

To be complete, an application for health insurance must contain all of the following EXCEPT:

Applicant's name and address
Applicant's signature
Date of application
Initial premium

Answer(s): D

Explanation:

Virginia Code § 38.2-3501 requires health insurance applications to include essential details for underwriting and contract formation: the applicant's name and address (option A), signature (option B) to affirm accuracy, and date (option C) to establish timing. These are mandatory for a complete application. Option D (initial premium) is not required on the application itself; while payment may accompany it to bind coverage (e.g., via a conditional receipt), it's a separate transaction, not an application component. The study guide likely lists these elements in a sample application, noting that premium submission is optional until acceptance, making D the exception.

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QUESTION: 29

One characteristic of flexible premium life insurance is that payment of the premium can be altered at the option of:

The policyowner
The contingent beneficiary
The insurer, if the Consumer Price Index has risen at least 10% over the past year
The insurer, if the prime interest rate falls below 6%

Answer(s): A

Explanation:

Flexible premium life insurance, such as universal life (Virginia Code § 38.2-3113.1), allows the policyowner to adjust premium payments within policy limits (e.g., minimum to maintain coverage, maximum for tax advantages), offering flexibility over fixed-premium plans like whole life. Option A correctly identifies the policyowner as the decision-maker. Option B (contingent beneficiary) is false; beneficiaries have no control over premiums. Options C and D tie adjustments to economic indices (CPI, interest rates), but Virginia law and standard policies don't grant insurers unilateral premium- changing rights based on these factors--flexibility is the policyowner's prerogative, subject to cash value sufficiency. The study guide likely contrasts this with traditional policies, using examples of skipped or increased payments, confirming A as the defining trait.

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QUESTION: 30

An information security program shall be designed to do all of the following, EXCEPT:

Ensure policyholder access to their information without substantial inconvenience
Ensure the confidentiality of policyholder information
Protect against any anticipated threats or hazards to the integrity of the information
Protect against unauthorized access to the information

Answer(s): A

Explanation:

Virginia Code § 38.2-623 mandates insurers to implement information security programs to safeguard nonpublic personal information, aligning with the NAIC's Model Regulation for Privacy. These programs must ensure confidentiality (option B), protect against threats or hazards (option C), and prevent unauthorized access (option D)--all core objectives to secure data against breaches or misuse. Option A (ensure policyholder access without substantial inconvenience) is not a requirement of the security program; while Virginia Code § 38.2-610 allows policyholders to request their information, this is a separate consumer right, not a security program goal. The study guide likely details these mandates in a privacy section, emphasizing protection over access facilitation, as security focuses on safeguarding, not convenience. For example, encryption (B, D) and risk assessments (C) are standard, but streamlining access (A) could even conflict with security if overly permissive, making A the exception.

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QUESTION: 31

Anything of value given to produce a contract is the definition of:

A grant
A codicil
A consideration
A covenant

Answer(s): C

Explanation:

In insurance contract law, per Virginia Code § 38.2-102, a contract requires consideration-- something of value exchanged to make it legally binding. Option C (consideration) fits this definition:
the insured's premium payment and the insurer's promise of coverage form the mutual value.

Option A (grant) implies a unilateral transfer, not a contract element. Option B (codicil) is a will amendment, irrelevant to insurance contracts. Option D (covenant) is a promise within a contract, not the value exchanged. The study guide likely explains consideration as a foundational principle, using examples like a $500 premium for a $100,000 policy, distinguishing it from other legal terms. Virginia follows common law requiring consideration for enforceability, making C the precise answer.

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QUESTION: 32

At policy delivery, to ensure that the insured has NOT experienced adverse medical conditions since the time of application for life insurance, the insured may be required to sign a:

Disclosure notice
Statement of good health
Conditional receipt
Notice of information practices

Answer(s): B

Explanation:

Virginia Code § 38.2-3106 governs life insurance delivery, where insurers may require a statement of good health (option B) at policy issuance to confirm no material health changes occurred since the application (e.g., a new cancer diagnosis). This signed document protects the insurer from undisclosed risks between underwriting and delivery, potentially voiding coverage if false (subject to incontestability, § 38.2-3105). Option A (disclosure notice) relates to privacy or policy terms, not health updates. Option C (conditional receipt) is issued at application with premium payment, providing temporary coverage, not a delivery requirement. Option D (notice of information practices) informs about data use (per § 38.2-604), not health status. The study guide likely illustrates this with a scenario--e.g., an insured signing to confirm no heart attack post-application--making B the standard practice.

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Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam (page: 4) Virginia Insurance Virginia Life, Annuities, and Health Insuranceination Series 1101 Updated on: 09-Feb-2026

QUESTION: 25

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QUESTION: 26

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QUESTION: 27

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QUESTION: 28

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QUESTION: 29

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QUESTION: 30

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QUESTION: 31

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QUESTION: 32

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Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam (page: 4)
Virginia Insurance Virginia Life, Annuities, and Health Insuranceination Series 1101
Updated on: 09-Feb-2026