Virginia-Life-Annuities-and-Health-Insurance Exam Questions and Answers (Page: 5)

QUESTION: 33

Claims settlement practices of insurers are regulated by:

The Internal Revenue Service
The National Association of Insurance Commissioners
Claims adjusters
State insurance departments

Answer(s): D

Explanation:

Virginia Code § 38.2-510 regulates unfair claim settlement practices, enforced by the State Corporation Commission's Bureau of Insurance--a state insurance department (option D). This includes timely claim processing and fair payment, with penalties for violations. Option A (IRS) oversees tax compliance, not insurance claims. Option B (NAIC) develops model laws and guidelines (e.g., Unfair Claims Settlement Practices Act), but lacks enforcement power; states adopt and regulate these standards. Option C (claims adjusters) are practitioners, not regulators. The study guide likely emphasizes Virginia's Bureau as the authority, citing examples like investigating delayed claims, aligning with state-level oversight under § 38.2-200 et seq., making D the correct regulator.

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QUESTION: 34

All of the following are typical health maintenance organization (HMO) preventive care services provided by a primary care physician EXCEPT:

Well-baby checkups
Immunizations for children
Experimental surgery
Physical examinations

Answer(s): C

Explanation:

Virginia Code § 38.2-4306 requires HMOs to offer preventive care, coordinated by primary care physicians (PCPs), focusing on health maintenance. Option A (well-baby checkups), option B (immunizations for children), and option D (physical examinations) are standard preventive services--e.g., growth monitoring, vaccines, and annual exams--covered at no cost under ACA- aligned plans (Virginia Code § 38.2-3440). Option C (experimental surgery) is not preventive; it's a treatment, often excluded or requiring special approval due to its unproven nature, not a PCP's routine role. The study guide likely lists HMO preventive benefits with examples (e.g., flu shots), contrasting them with non-preventive interventions like surgery, making C the exception.

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QUESTION: 35

All of the following are underwriting criteria for individual life insurance EXCEPT:

Gender
Religion
Occupation
Ability to pay premiums

Answer(s): B

Explanation:

Virginia Code § 38.2-3107 governs life insurance underwriting, where insurers assess risk using factors like gender (option A, affecting mortality rates), occupation (option C, e.g., hazardous jobs increase risk), and ability to pay premiums (option D, ensuring policy sustainability). Option B (religion) is not a permissible criterion; Virginia Code § 38.2-211 prohibits unfair discrimination in insurance based on religion, race, or other protected traits, reflecting federal and state anti-

discrimination laws. The study guide likely explains underwriting with examples--e.g., higher premiums for a male firefighter--but flags religion as an illegal factor, with case studies of compliance, making B the exception.

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QUESTION: 36

When may a person insured under a group term insurance policy exercise the conversion option?

Never, because group life insurance does not have a conversion privilege
Anytime while insurable and still a member of the insured group
Within 31 days after the person has terminated employment
Anytime after the group contract has existed for five years

Answer(s): C

Explanation:

Virginia Code § 38.2-3330 mandates a conversion privilege in group term life policies, allowing insureds to convert to an individual policy without evidence of insurability within 31 days after losing group eligibility (e.g., employment termination). Option C matches this precisely. Option A is false; conversion is a legal requirement. Option B is incorrect; conversion applies post-eligibility, not during active membership while still insurable. Option D (five years) is arbitrary and unsupported by law. The study guide likely details this 31-day window with examples--e.g., an employee converting to whole life after layoffs--emphasizing its protective role, making C the correct timing.

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QUESTION: 37

An agreement attached to a health insurance policy which alters either the terms of the policy or the coverage is called:

A limit clause
An attachment
An insuring clause
A rider

Answer(s): D

Explanation:

Virginia Code § 38.2-3500 et seq. allows health insurance policies to include riders--supplemental agreements modifying coverage or terms (e.g., adding dental benefits or exclusions). Option D (rider) is the standard term. Option A (limit clause) isn't a distinct attachment; limits are within the policy. Option B (attachment) is vague and not insurance-specific. Option C (insuring clause) is the core promise of coverage, not an alteration. The study guide likely defines riders with examples--e.g., a maternity rider increasing premiums--distinguishing them from policy staples, confirming D as the answer.

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QUESTION: 38

What is a situation or condition that increases the likelihood of an insured loss occurring?

Hazard
Peril
Exposure
Risk

Answer(s): A

Explanation:

In insurance terminology, per Virginia Code § 38.2-100 et seq., a hazard (option A) is a condition increasing the likelihood or severity of a loss from a covered peril (e.g., smoking increases fire risk). Option B (peril) is the cause of loss (e.g., fire, theft). Option C (exposure) is the extent of potential loss, not the condition itself. Option D (risk) is the broader uncertainty of loss, encompassing hazards and perils. The study guide likely differentiates these with examples--e.g., icy roads (hazard) causing a crash (peril)--highlighting hazard's role in amplifying loss probability, making A the exact match.

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QUESTION: 39

If an insurer pays an individual health insurance claim during a policy's grace period:

The deductible is waived
A 10% service fee is charged
The policy is canceled automatically at the end of the grace period
The amount of unpaid premium may be subtracted from the reimbursement

Answer(s): D

Explanation:

Virginia Code § 38.2-3508 provides a 31-day grace period for individual health insurance premium payments, during which coverage remains active and claims are paid. If a claim arises, the insurer may deduct any unpaid premium from the reimbursement (option D), ensuring it recovers owed funds while honoring the claim. Option). Option A (deductible waived) is false; deductibles apply regardless of payment status. Option B (10% fee) is unsupported by Virginia law. Option C (automatic cancellation) is incorrect; cancellation requires notice post-grace period if unpaid (Virginia Code § 38.2-3510). The study guide likely explains this with examples--e.g., a $500 claim with a $100 unpaid premium nets $400--reflecting standard practice, making D the correct outcome.

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QUESTION: 40

All of the following statements about the installments for a fixed period settlement option in life insurance policies are true EXCEPT:

The amount of the periodic payment is based on the beneficiary's age
The longer the period of time, the smaller each installment
Each installment payment consists of both principal and interest
The beneficiary may elect this option unless the policyowner has specified otherwise

Answer(s): A

Explanation:

The fixed period settlement option in life insurance, per Virginia Code § 38.2-3115, pays the death benefit in equal installments over a set time (e.g., 10 years), determined by the policyowner or beneficiary if not restricted. Option B is true; a longer period spreads the principal and interest over more payments, reducing each installment (e.g., $100,000 over 20 years yields smaller payments than over 5 years). Option C is true; payments blend principal and interest earned on the remaining proceeds held by the insurer. Option D is true; Virginia law allows beneficiaries to choose settlement options unless the policyowner locks in a method (e.g., via a policy endorsement). Option A is false; the payment amount depends on the proceeds, interest rate, and period length--not the beneficiary's age, which might influence a life income option instead. The study guide likely contrasts fixed period (time-based) with life annuity (age-based) options, using examples like $500 monthly for 10 years, making A the exception.

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Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam (page: 5) Virginia Insurance Virginia Life, Annuities, and Health Insuranceination Series 1101 Updated on: 09-Feb-2026

QUESTION: 33

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QUESTION: 34

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QUESTION: 35

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QUESTION: 36

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QUESTION: 37

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QUESTION: 38

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QUESTION: 39

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QUESTION: 40

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Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam (page: 5)
Virginia Insurance Virginia Life, Annuities, and Health Insuranceination Series 1101
Updated on: 09-Feb-2026