Virginia-Life-Annuities-and-Health-Insurance Exam Questions and Answers (Page: 8)

QUESTION: 57

Which is a lawful cause for cancellation of an individual long-term care insurance policy by the insurer?

Nonpayment of premium
Medicaid eligibility
Insurer insolvency
Nuisance claims

Answer(s): A

Explanation:

Virginia Code § 38.2-5208 allows LTC policy cancellation by the insurer for nonpayment of premium (option A) after a 31-day grace period and notice, a standard contract right. Option B (Medicaid eligibility) isn't a cancellation cause; it may coordinate benefits, not terminate coverage. Option C (insurer insolvency) affects payment ability, not lawful cancellation grounds. Option D (nuisance claims) isn't a legal basis; claims frequency doesn't void coverage unless fraudulent (Virginia Code § 38.2-309). The study guide likely lists nonpayment as the primary insurer-initiated cancellation reason, with examples like missed payments triggering notice, making A the lawful cause.

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QUESTION: 58

What are long-term care insurance "ADL's"?

Aggregate dollar limits
Aggregate days limitation
Activities of daily living
Approved doctor lists

Answer(s): C

Explanation:

Virginia Code § 38.2-5200 defines ADLs (Activities of Daily Living, option C) as essential tasks--e.g., bathing, dressing, eating--used to determine LTC benefit eligibility (typically inability to perform 2 of
6). Option A (aggregate dollar limits) refers to coverage caps, not ADLs. Option B (aggregate days limitation) might confuse with elimination periods, not ADLs. Option D (approved doctor lists) relates to provider networks, not functional criteria. The study guide likely details ADLs with examples--e.g., needing help with mobility--emphasizing their role in claims, making C the correct term.

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QUESTION: 59

Which one of the following statements about an adjustable life insurance policy is true?

An increase in premium decreases future cash values
Simultaneous changes in face amount and in premium are within its capabilities
An increase in face amount lengthens the protection period when the policy provides term coverage
An increase in face amount shortens the premium payment period when the policy provides whole life coverage

Answer(s): B

Explanation:

Adjustable life insurance, per Virginia Code § 38.2-3113.1, blends whole and term features, allowing policyowners to adjust face amount and premiums. Option B is true; simultaneous changes (e.g., increasing face amount and premium) are possible, adapting coverage and cash value. Option A is false; higher premiums typically increase cash value, not decrease it, unless misallocated. Option C is incorrect; increasing face amount doesn't inherently extend term duration--it adjusts cost or cash value. Option D is false; face amount increases don't shorten whole life premium periods, which are fixed or flexible based on design. The study guide likely highlights adjustability with examples--e.g., raising $100,000 to $150,000 with a premium hike--making B the true capability.

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QUESTION: 60

To cancel a health insurance policy, which one of the following must the insured do?

Notify the insurer in writing
Replace the current policy with another
Challenge at least two uniform mandatory provisions

Answer(s): A

Explanation:

Virginia Code § 38.2-3508 governs cancellation of individual health insurance policies. For the insured to cancel, they must notify the insurer in writing (option A), specifying intent to terminate, typically effective upon receipt or a stated date, per policy terms. This formal notice ensures clarity and protects both parties, aligning with contract law principles. Option B (replace with another policy) is a practical choice but not a legal requirement; cancellation can occur without replacement. Option C (challenge mandatory provisions) is nonsensical; uniform provisions (e.g., grace period, per § 38.2-3503) are standard and unrelated to cancellation. The study guide likely outlines this process in a policyholder rights section, with examples--e.g., a letter stating "Cancel effective 5/1/2025"-- emphasizing written notice as the sole requirement, making A the correct action.

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QUESTION: 61

All of the following are common features found in health maintenance organizations (HMOs) EXCEPT:

Wellness programs
Discounts on local health spa memberships
Twenty-four hour access to emergency care
Outpatient medical services

Answer(s): B

Explanation:

Virginia Code § 38.2-4306 mandates HMO benefits, focusing on comprehensive care. Option A (wellness programs) is common, promoting prevention (e.g., smoking cessation). Option C (24-hour emergency care) is required, ensuring access via PCP coordination or direct ER services. Option D (outpatient services) is standard, covering clinic visits. Option B (discounts on local health spa memberships) isn't a typical HMO feature; while some plans offer wellness incentives, spa discounts are ancillary, not a core benefit under Virginia law or NAIC HMO models. The study guide likely lists HMO staples (A, C, D) with examples--e.g., annual checkups (D)--contrasting them with optional perks like B, making it the exception.

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QUESTION: 62

A health maintenance organization (HMO) member receives all preventive and routine medical care from the:

Primary care physician
Medical director
Routine care physician
Provider association

Answer(s): A

Explanation:

Virginia Code § 38.2-4303 defines the HMO model, where the primary care physician (PCP, option A) acts as the gatekeeper, delivering preventive (e.g., vaccines) and routine care (e.g., checkups), and coordinating referrals. Option B (medical director) oversees HMO operations, not direct care. Option C (routine care physician) isn't a standard term; the PCP fills this role. Option D (provider association) might imply a network, but care comes from the individual PCP, not a collective. The study guide likely explains the PCP's central role with examples--e.g., a member seeing their PCP for a flu shot-- highlighting HMO cost-control via this structure, making A the correct provider.

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QUESTION: 63

The "free look" provision in individual health insurance allows the insured a period of time to:

Try a policy without paying for it
Compare insurance policies
Change coverage on a policy without changing the premium
Cancel the policy and receive a full refund

Answer(s): D

Explanation:

Virginia Code § 38.2-3502 mandates a "free look" period (typically 10 days) for individual health insurance, allowing the insured to review the policy and cancel it with a full premium refund (option

D) if returned within that time. Option A (try without paying) is false; premiums are paid upfront, refundable only upon cancellation. Option B (compare policies) is a practical use but not the legal purpose; the provision ensures cancellation rights, not comparison. Option C (change coverage) isn't allowed; modifications require underwriting, not free-look terms. The study guide likely details this consumer protection with examples--e.g., returning a policy on day 9 for a refund--making D the precise right.

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QUESTION: 64

All of the following are types of insurance policy exchanges that can be made without current taxation EXCEPT:

The exchange of an annuity for a life insurance policy
The exchange of a life insurance policy for an annuity
An annuity exchanged for another annuity contract
A life insurance policy exchanged for another life policy

Answer(s): A

Explanation:

Under IRC § 1035, certain insurance exchanges avoid immediate taxation: option B (life to annuity), option C (annuity to annuity), and option D (life to life) qualify if like-kind and properly executed, deferring gains. Option A (annuity to life) isn't permitted tax-free; annuities (income-focused) and life insurance (death-benefit-focused) aren't "like-kind," triggering taxable gain recognition. Virginia Code § 38.2-3100 et seq. aligns with federal tax rules. The study guide likely explains § 1035 exchanges with examples--e.g., swapping a $50,000 life policy for an annuity tax-free (B)--noting A's taxable status due to product mismatch, making it the exception.

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Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam (page: 8) Virginia Insurance Virginia Life, Annuities, and Health Insuranceination Series 1101 Updated on: 09-Feb-2026

QUESTION: 57

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QUESTION: 58

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QUESTION: 59

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QUESTION: 60

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QUESTION: 61

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QUESTION: 62

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QUESTION: 63

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QUESTION: 64

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Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam (page: 8)
Virginia Insurance Virginia Life, Annuities, and Health Insuranceination Series 1101
Updated on: 09-Feb-2026