Virginia Insurance Virginia Life, Annuities, and Health Insurance Examination Series 1101 Exam Questions Instant Access

Question 1

The employer who receives and holds the insurance policy is known as the:

AGroup director

BBenefit coordinator

CMaster policyholder

DPolicy beneficiary

Answer : C

The employer who receives and holds the group life insurance policy is referred to as the master policyholder. The master policyholder is responsible for overseeing the insurance plan for the employees, though the employees themselves are the policyholders for their individual benefits. The insurer provides the master policy to the employer, and employees receive certificates of insurance.

Question 2

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

AThe face amount of the policy remains constant throughout the policy period, but the premium decreases

BThe face amount of the policy remains level for five years and then decreases during the remainder of the policy period

CThe face amount of the policy decreases throughout the policy period

DThe face amount of the policy increases during the policy period, but the premium decreases

Answer : C

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

Question 3

Whole life insurance policies guarantee all of the following EXCEPT:

AThe nonforfeiture values

BThe policy loan values

CThe dividend scale

DThe settlement option values

Answer : C

Whole life contracts guarantee cash values, nonforfeiture options, loan values, and settlement values. Dividends are not guaranteed because they depend on company performance.

Exact Extract (Virginia Life Insurance Study Guide): ''Whole life policies provide guaranteed cash values, policy loans, and settlement options. Dividends, if declared, are not guaranteed.''

Reference (Virginia Documents / Study Guide):

--- Virginia Life Insurance Examination Outline, Policy Provisions and Guarantees

Question 4

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

AA limit clause

BAn attachment

CAn insuring clause

DA rider

Answer : D

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.

Question 5

A penalty tax sometimes applies to "premature" distributions of gains under a modified endowment contract (MEC). What is the amount of the penalty tax?

A7.5%

B10.0%

C12.5%

D15.0%

Answer : B

A 10% penalty tax applies to 'premature' distributions of gains from a modified endowment contract (MEC) before the policyholder reaches the age of 59. This penalty is applied in addition to regular income taxes on the distribution. The MEC rules were established to prevent the use of life insurance policies as tax shelters.

Question 6

In health insurance, the insured must furnish written proof of loss to the insurer within:

A15 days of the occurrence of the loss

B30 days of the occurrence of the loss

C60 days of the occurrence of the loss

D90 days of the occurrence of the loss

Answer : B

Under most health insurance policies, the insured is required to provide written proof of loss within 30 days of the occurrence of the loss. This allows the insurer to promptly evaluate the claim and ensure that it is processed without unnecessary delays. Some policies may allow extensions under special circumstances, but the general rule is that proof of loss must be provided within 30 days.

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Question 7

If an employee in poor health is part of a large group that is acceptable for group life insurance, that employee is:

AIneligible for coverage under the plan

BEligible for coverage, but on a rated basis

CEligible for the same type of coverage as other employees

DEligible for coverage more limited than that of other employees

Answer : C

Group life insurance in Virginia, governed by Virginia Code 38.2-3318 et seq., operates on a ''group underwriting'' basis, meaning coverage is issued to the group as a whole without individual health assessments. For large groups (typically over 10 employees, though Virginia defines ''large'' contextually), insurers accept the entire eligible group without requiring evidence of insurability, provided the group meets participation and eligibility standards (e.g., active employees). Option C reflects this: an employee in poor health, as part of an acceptable group, receives the same coverage as others, as health status doesn't affect eligibility or terms. Option A (ineligible) is false; group plans don't exclude based on individual health. Option B (rated basis) applies to individual policies where substandard risks increase premiums, not group plans where risk is pooled. Option D (limited coverage) contradicts the uniformity of group coverage terms. The study guide likely highlights this non-discriminatory feature of group life, ensuring equal benefits for all eligible members, making C the correct answer per Virginia's legal and practical framework.