Virginia Life and Health Exam Review Questions With Verified Detailed Answers

Unilateral - Correct Answers What contract term means only one party to a contract's promises are legally enforceable? Pay the death benefit. - Correct Answers Mr. Jones, the insured, committed suicide after the expiration of the suicide clause in his life insurance policy. The insurer is obligated to: Recurrent disability - Correct Answers The benefit that encourages the disabled policy owner to try to return to work is: Term policy - Correct Answers Jeff has limited financial resources, but finds himself in a position where he needs a good deal of protection. A __________would probably best suit his needs at this time. $8,100 - Correct Answers Tyler owns a major medical policy with 70/30 coinsurance and a $3,000 deductible. If he submits a claim for $20,000, how much will he pay? The agent, insured, and policyowner. - Correct AnswersLife insurance applications require a signature from: Annually - Correct AnswersThe cheapest premium payment mode would be on a policy that is paid: Adjust the claim benefits to reflect what he would have been entitled to if his real age had been given. - Correct AnswersIf an applicant misstates their age on an insurance application, what does the insurer do when it is discovered at claim time? Survivorship life - Correct AnswersPhil and Sarah bought a life policy in which both are insured. Sarah dies before Phil. If the policy pays the death benefit after Phil dies, it is a: A 41 year old lawyer who wants a policy to pay his mortgage if he dies - Correct AnswersA decreasing term life policy would be the most appropriate for: Issue the applicant a conditional receipt. - Correct AnswersWhen an insured completed his health policy application, his producer did not take a premium when he submitted it to the insurer. When the producer delivers the policy to the applicant, he needs to do all of the following EXCEPT: Contributory - Correct AnswersWhat type group plan requires 75% participation? 30 days - Correct AnswersHow much time does a licensee have to notify the Commissioner of Insurance of any change of residential, mailing, or business address? HMOs - Correct AnswersThe services are provided on a prepaid per person basis called capitation in: Application - Correct AnswersIn life insurance, insurable interest must be present at the time of: Provide benefits not covered by Medicare. - Correct AnswersMr. Johnson is looking at Medicare Supplement policies. These policies are designed primarily to: Variable annuity - Correct AnswersIf the cash values of an annuity are invested in securities, it is a: Advertisement - Correct AnswersWhat is a marketing communication that is oral, printed, or written and designed to create public interest in life insurance or annuities? 12 consecutive months - Correct AnswersWhat is the minimum time required for the basis of a long-term policy? Cash surrender - Correct AnswersAlex's life policy lapsed, which Nonforfeiture option would the insurer send him the value of the policy? January 22, after the statement of good health is signed, and the initial premium is paid. - Correct AnswersOn January 3, an application is submitted without the initial premium. The insurer requires a medical exam, and it is completed on January 15. On January 20, the insurer issued the policy standard, and the producer delivers it on January 22. When is coverage effective? Payment of Claims provision - Correct AnswersWhat part of the policy directs the insurer on the recipients of benefits? It provides a temporary waiver of premium if the person paying the premium dies. - Correct AnswersWhat is the advantage of a payor benefit rider? Reduction of premium - Correct AnswersDylan tells the insurer to keep the dividend and apply it to his next premium. He is using which dividend option? Enactment of insurance laws - Correct AnswersThe Commissioner is responsible for all of the following in Virginia, EXCEPT: 16 hours - Correct AnswersHow many hours of continuing education for 1 line of authority must insurance agents complete every 2 years? The death benefit - Correct AnswersIf James has an increasing term policy, which of the following must increase? Settlement options - Correct AnswersThe manner in which the proceeds of a life policy are handled are specified in what provision? Settlement options - Correct AnswersThe manner in which the proceeds of a life policy are handled are specified in what provision? Business overhead expense - Correct AnswersWhich of the following policies would pay for a company's rent, utilities, and other operating expenses if the owner becomes disabled? Dread disease - Correct AnswersTina has a policy that only covers cancer-related medical expenses. What kind of policy does she have? 30 days - Correct AnswersHow much time does an insurer have to report a termination of an appointment to the Commissioner of Insurance? The parent with the earliest birthday in the year is primary. - Correct AnswersShane and Casey both have health plans from work that covers their son Cash. Which plan is primary? Ambiguities - Correct AnswersWhich of the following is not one of the elements required to make a contract legal? Single premium whole life insurance - Correct AnswersWhich type of life policy would best suit someone who retires in good health with a large amount of cash, whose investment goals are conservative? 20 days - Correct AnswersHow many days does an insured have to file a notice of claim? 31 days - Correct AnswersHow many days does someone have after termination of their group policy to make their first premium payment on the converted policy? April 21, after the statement of good health is signed, and the initial premium is paid. - Correct AnswersOn April 9, an application is submitted without the initial premium. The insurer requires a medical exam, and it is completed on April 14. On April 18, the insurer issued the policy, and the producer delivers it on April 21. When is coverage effective? 61 to 76 - Correct AnswersIn Virginia, inflation protection in long-term care partnership policies MUST be provided for seniors who are in what age range? Inform applicant of the free look period - Correct AnswersA replacing insurer has all the following duties, EXCEPT: As often as he or she wants - Correct AnswersHow often can the Commissioner of Insurance examine individuals that transact insurance in Virginia? Accelerated benefits - Correct AnswersLife insurance death benefits that can be accessed tax-free when the insured is still alive are called: The signature of the insured (unless not an adult), and the agent. - Correct AnswersAn insurance application is not complete unless it has: Managed care - Correct AnswersA program that includes prehospitalization authorization is an example of: Pay the death benefit based on the applicant's actual age. - Correct AnswersIf an applicant states their age is 30 on an application for life insurance, when they were actually 37, what is the insurer likely to do? To regulate the pricing across companies - Correct AnswersWhich of the following is NOT a purpose the Commissioner has established minimum standards for individual health insurance policies? The entire contract - Correct AnswersThe fact that the application is part of the policy is stated in: 30 days - Correct AnswersHow much time does an insurer have to notify the Commissioner of Insurance of an appointment? Guaranteed insurability - Correct AnswersThe rider that you would pick if you want to be able to add coverage in the future, without having to show proof of insurability: To each disability separately. - Correct AnswersIn most Disability Income policies, the Elimination Period applies: They are fully taxable. - Correct AnswersHow does the IRS treat disability income benefits when the employer pays the policy premiums? 59 - Correct AnswersAt what age would a qualified retirement plan distribution be premature? PPO - Correct AnswersWhich of the following offers the broadest service area and broadest selection of providers? Experimental services. - Correct AnswersComprehensive major medical health policies typically have an Eligible Expenses provision that specifies coverage for all but: Inspection report - Correct AnswersInformation obtained by a phone call to an applicant, may be included in which of the following reports? Annually - Correct AnswersHow often do appointments have to be renewed? A sports team formed to procure insurance - Correct AnswersWhich of the following groups is ineligible for group insurance? The applicant and agent - Correct AnswersWhen dealing with an individual health policy replacement, who must sign a form noting replacement? Application - Correct AnswersWhat is the biggest source of information used in underwriting? Younger siblings of the policyholder - Correct AnswersRiders covering additional insureds can be added to life policies and cover all but which of the following? His beneficiary will receive the full death benefit. - Correct AnswersBlake died 20 days after his group life insurance coverage was terminated. He did not apply for individual coverage. Which of the following is true? The policyowner - Correct AnswersWho has the right to change the beneficiary on a life policy? Group and Social Security benefits pay a combined maximum limit. - Correct AnswersWhich of the following statements is correct when pertaining to coordination of benefits by a group long-term disability plan with Social Security? HDHPs - Correct AnswersHSAs are frequently used with: Pay the claim in full. - Correct AnswersAn insured became disabled in February of 2014. She had bought a disability income policy in October of 2012. Her disability was due to a condition that existed prior to October 2012 but was not excluded from her policy. The insurer will: Conditionally renewable - Correct AnswersNick has a policy that the insurer can cancel when he turns 65. Which type of policy is it? 31 days - Correct AnswersHow many days does someone have after termination of their group life insurance policy to be issued an individual life insurance policy? Risk classification - Correct AnswersJacob, James and Jonathan are triplets, and all applied for the same type of insurance coverage at the same time. For James and Jonathan the rates were the same. Jacob's rate was quite a bit higher. What is the most likely reason for this difference? Renewable term - Correct AnswersGregory recently purchased a one-year term insurance policy. At the end of the year, he can purchase an identical policy without having to show proof of insurability. Why type of policy did he purchase? Doctor visits - Correct AnswersPaul has a basic medical policy. It will pay for: Arranging to keep the policy in his office for safe-keeping. - Correct AnswersAll of the following are duties of a producer when delivering a policy to an applicant EXCEPT: The insured to maintain a policy in force while unable to pay premiums when disabled. - Correct AnswersA Waiver of Premium provision in a Disability Income policy allows: HDHP - Correct AnswersThe most common plan used with an HSA is: Work - Correct AnswersSam works for large corporation and is eligible for both his company's health plan and Medicare. Which plan would be primary? The gender of the employee. - Correct AnswersThe Acme Brick Company wants to provide additional benefits to certain classes of employees under a group health plan. They can do this as long as the classes are not based on: Discrimination abased on occupation - Correct AnswersWhich of the following would NOT be considered unfair discrimination? HIPAA - Correct AnswersWhat federal act protects the coverage of individuals and their families when they change or lose their jobs? MECs - Correct AnswersOver-funded life insurance policies where the proceeds are subject to taxation are called: Disability buy-out - Correct AnswersJeff and Mike own an architect firm with 20 employees and worry about the company if one of them becomes permanently disabled. What type of policy should they buy? The moment of birth - Correct AnswersIn health policies, when does coverage for newborns begin? Twisting - Correct AnswersInducing a policyholder to switch insurance companies without regard to bad consequences is: Guaranteed renewable - Correct AnswersLong-term care plans are written as: Joint life - Correct AnswersWhat type policy would pay the death benefits after the first person dies, if it covers two or more lives? A previous adverse underwriting decision must not be used - Correct AnswersWhat is the rule on the use of a previous adverse underwriting decision on a new underwriting request? Group - Correct AnswersWhat type of premiums payment can employers deduct as an ordinary business expense? Group life insurance or group annuities where there is direct solicitation of individuals by an agent - Correct AnswersWhich of the following is NOT exempt from replacement rules? Key person insurance - Correct AnswersThe Beauty Shop Cosmetic Company purchases a life insurance policy on Anna, the company's leading salesperson. Which business continuation plan does this company have? The grace period provision - Correct AnswersKim's policy remained in force for a certain number of days even though she forgot to pay the premium. The provision that allows this is called: Losses from an auto accident when the insured was at fault - Correct AnswersA health policy will usually exclude losses related to all of the following, EXCEPT: Officers, directors, or employees of an insurer or producer who receive commissions on policies sold. - Correct AnswersWhich of the following individuals is required to be licensed? Renewability is the insurer's option. - Correct AnswersJamie has a renewable term policy. Which of the following is not an incorrect statement about this type of policy. Yes, the interest can be paid annually, or added to the loan. - Correct AnswersDoes a loan on the cash value of a life insurance policy accrue interest, and if so, how is the interest handled? Policy loans are taxable as income. - Correct AnswersWhich of the following statements is not true about the tax liabilities for individual life insurance policies? 15 days - Correct AnswersAfter receiving notice of a claim, the insurer has a maximum of how many days to provide claims forms? Provide documentation that it is allowed to do business in Virginia, designate a licensed agent to be responsible for the business, and pay all fees - Correct AnswersWhat must a business entity do before it can be licensed as an agent? Viator - Correct AnswersSomeone who owns a life insurance policy, has a life-threatening illness and sells the death benefits is a: An insurance agent - Correct AnswersA person or entity licensed to sell, solicit, or negotiate insurance is called: Unfair marketing practices - Correct AnswersIn Virginia boycott, coercion and intimidation are considered as which of the following? Misrepresentation - Correct AnswersIf a producer represents a health discount plan as a form of insurance they have committed: Medicare - Correct AnswersNo Medicare supplement insurance policy may contain benefits that duplicate benefits provided by: Flexible premium deferred annuity - Correct AnswersBecky is a 31 years old and knows she needs to start a retirement plan. She currently works in a bakery and is worried about how inflation would affect her retirement plan. Which annuity would be a good fit for her needs? An individual who advises on insurance needs - Correct AnswersPeople who are considered to be insurance "consultants" include: Cost of death protection deducted and current interest rate credited - Correct AnswersWhat are the two most common adjustments made during a month with a universal life insurance policy? 3 years - Correct AnswersFor at least how many years must individuals retain records relating to an insurance transaction? Select one: 90 days - Correct AnswersHow many days does an insured have to provide proof of loss? Conviction for a misdemeanor traffic law - Correct AnswersWhich of the following is NOT a reason for the Commissioner of Insurance to suspend a license? Assignment - Correct AnswersRichard is thinking about transferring some of the ownership rights of his policy to his brother Randy. What term is used for this type of transfer? May 1 - Correct AnswersIf Dan pays his health insurance premium quarterly and fails to make payment on April 1, his grace period will expire: The value of nonforfeiture options may decrease. - Correct AnswersJennifer made an additional premium payment on her Adjustable Life policy. Which of the following is not a way that her policy is affected by this payment? The insurer - Correct AnswersAccording to the Physical Examination and Autopsy provision, who is responsible for paying the cost of examining the insured? 15 days - Correct AnswersHow many days does an insurer have to provide claims forms after a notice of claim? HMO and PPO - Correct AnswersA POS (Point od Service) plan is a combination of: The insurer will exclude the condition with an Impairment rider. - Correct AnswersIf an individual has a chronic medical condition, how is the insurer likely to handle this situation when issuing an individual health policy? Representations - Correct AnswersWhen Jason filled out his application his statements had to be ______________ to be considered legal. $3,200 - Correct AnswersSue's hospital bill is $4,500. Her major medical policy has a $500 deductible and then it pays 80% of the remaining bill. The policy also has a maximum out-of-pocket of $2,000. How much of the total bill will the insurance company pay? Twisting - Correct AnswersWhich of the following is an improper form of policy replacement? Tell the prospective client that a claim might be rejected later due to the omission. - Correct AnswersThe producer realizes that the prospective client omitted information about a prior illness. What should the producer do? 15 days - Correct AnswersThe insurer has a maximum of how many days after receiving notice of a claim to provide claims forms? Individual disability income policy - Correct AnswersSally is a self-employed software programmer that works from home. If she becomes unable to work due to a disability, which type of policy would pay her rent? The application does not include the premium. - Correct AnswersIn a life policy, a statement of good health is needed when: Conditionally renewable - Correct AnswersWhat type of policy allows an insurer to cancel a policy if certain circumstances stated in the contract happen? Variable universal life - Correct AnswersInvestment risk is completely taken by the policyowner is what type policy? Accelerated benefit rider - Correct AnswersWhich rider on Diane's life policy will help her out when she is confined to a nursing home with a terminal illness? HMOs - Correct AnswersCapitation is used in: Rebating - Correct AnswersIf an insurance agent offers to split their commission with a prospective applicant, this would be considered: November 7 - Correct AnswersOn November 5, Zoe fills out an application for a life policy. On November 6, the agent accepts the premium for the policy. The policy is delivered on November 7. Which date does the Free Look period start? The sharing of medical information and data among its member companies. - Correct AnswersWhat is the main purpose of the MIB? The insured can buy additional disability income coverage without proving evidence of insurability. - Correct AnswersWith a Guaranteed Insurability rider on a Disability Income policy, the: Explain the issue and collect an additional premium. - Correct AnswersAn insurance applicant submits an application with a premium. After underwriting, the insurer sends back the policy, rated, with an impairment rider. What should the producer tell the applicant at delivery? Adhesion - Correct AnswersWhat type of insurance contract is prepared by the insurer and not negotiated? A replacement - Correct AnswersErrors & Omissions are most likely to occur during: Insureds - Correct AnswersInsurance replacement regulations are designed to protect: Dow Jones Industrial Average - Correct AnswersDylan is looking at buying an equity-indexed life policy; it will likely be tied to: Health maintenance organizations - Correct AnswersIn the health industry, what does HMO stand for? Consideration Clause - Correct AnswersThe policyowner's obligation to pay the premium is the: Agent - Correct AnswersIf an agent creates an advertisement, who is responsible for its content? Create their own form on which to submit the claim. - Correct AnswersWhat should the insured do if the insurer fails to send the correct forms, under the Claims Forms provision of a health policy? Life annuity - Correct AnswersWhat kind of contract pays an income to an insured until the insured dies? 50 employees - Correct AnswersSmall employer plans are designed to provide affordable health and accident coverage for employers who have less than: Revocable - Correct AnswersThe beneficiary designation that allows the policy to be changed without the beneficiary's consent: Fair Credit Reporting Act - Correct AnswersWhat guarantees Jason the right to question the source and validity of consumer information used to rate a policy? That the applicant pays the initial premium. - Correct AnswersAn Accident and Health policy contains a Consideration clause which states: Residual disability - Correct AnswersAn insured has returned to work after a disability, but is unable to perform all of his previous duties. Which of the following definitions would cover his permanent partial disability? None - Correct AnswersBarbara allows her comprehensive major medical plan to lapse. If her policy is reinstated on March 20th and she contracts mononucleosis on March 29th, what benefits will she receive? Usual, reasonable, and customary - Correct AnswersTo determine the coverage and benefits to pay for a surgery based on what is considered fair and common for an area is: Sex - Correct AnswersWhich of the following factors does not influence the amount that an individual receives as monthly income under Social Security? Never taxed - Correct AnswersHow are dividends treated for tax purposes? 8% - Correct AnswersIf an insured borrows against their life insurance policy, what is the maximum fixed rate that can be charged? Virginia Insurance Guaranty Association - Correct AnswersWhat provides insurers with the financial means to pay their policyholders' claims in the event that an insurer becomes insolvent? Automatic premium loan - Correct AnswersWhich of the following could be used to prevent a lapse in the payment of life insurance premiums? Needs - Correct AnswersWhat approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessities? A person also licensed for the same class of insurance - Correct AnswersAn agent may share their commissions or other compensation with which of the following? 10 days - Correct AnswersAt least how many days after notice of termination, does an agent have to stop selling or soliciting insurance? Waive an insured's premiums if he/