VIRGINIA LIFE AND HEALTH INSURANCE EXAM| QUESTIONS
AND ANSWERS VERIFIED 100%| LATEST 2025 UPDATE
401 K Plan -CORRECT ANSWER A qualified retirement plan in which the
employee can set aside a portion of their income with pre-tax dollars.
Absolute Assignment v. Collateral Assignment -CORRECT ANSWER Absolute:
A permanent and irrevocable transfer of rights and/or benefits by the
policyowner. Collateral: A temporary and/or revocable transfer of benefits by
the policyowner.
Accelerated Death Benefits -CORRECT ANSWER Policy provision that allows
full or partial payment of the policy's death benefit before the insured's death if
he/she is terminally ill.
Accidental Death Benefit -CORRECT ANSWER An extra cost rider that requires
the insurance company to pay an additional benefit in the event that the insured
dies within 90 days of an accident as a direct result of the accident.
Accumulate at Interest -CORRECT ANSWER The Dividend Option where the
policyowner leaves the dividends with the insurer to invest and earn interest.
Adhesion -CORRECT ANSWER Since the insurer created all the documents of
the contract, any ambiguities in the contract will be settled in favor of the
insured. Since the insurer wrote the contract they are stuck with it.
Adverse Selection -CORRECT ANSWER The tendency for less favorable risks to
seek or continue insurance to a greater extent than more favorable risks.
,Agency Agreement or Agency Contract -CORRECT ANSWER A legal document
containing the terms of the agreement between the agent and the insurance
company. It clearly defines what an agent can and cannot do, and how he/she
will be compensated.
Agent Authorities -CORRECT ANSWER Expressed: Power or authority
specifically
granted in writing to an agent by the insurance
company in their Agency Agreement. Apparent:
Power or authority that the public reasonably
assumes an agent has based upon his/her
actions. Implied: Power or authority that is not
expressly granted by the company but that an
agent can assume or that are implied he/she has
in order to transact insurance business.
Agent/Producer -CORRECT ANSWER a legal representative of an insurance
company
Agent's Report -CORRECT ANSWER A written report from the agent submitted
to the insurer along with the application disclosing what the agent knows,
observed, or learned about the proposed insured's risks.
Aleatory -CORRECT ANSWER dependent on luck or chance
Annual Renewable Term -CORRECT ANSWER A Term Life Insurance contract
which gives the policyowner the option to renew the policy each year without
showing proof of insurability. Premiums increase at each renewal.
, Annuitant -CORRECT ANSWER The person that buys an annuity; may or may
not be an annuity's policyowner.
Annuity -CORRECT ANSWER A contract/policy that guarantees to pay income
for a specified period of time or for the life of the annuitant. Designed to
prevent people from outliving their savings.
Appointment -CORRECT ANSWER Authorization of an agent/producer by an
insurer to represent the company.
Blackout Period -CORRECT ANSWER The period of time between the youngest
child turning 16 and the widow(er) reaching retirement age during which no
Social Security Survivor Benefits are paid to the surviving spouse.
Buy-Sell Agreement -CORRECT ANSWER Business use of Life Insurance where
partners in a business buy life insurance on each other. They agree that when
one of them dies the survivors have the right to purchase the deceased partner's
share of the business. The death benefit from the insurance is used to finance the
purchase.
Cash Nonforfeiture Option -CORRECT ANSWER Policyowner receives a lump-
sum payment of the current cash value of the policy upon surrender of the
policy. The policy cannot be reinstated.
Cash Settlement Option -CORRECT ANSWER Upon maturity of an insurance
policy the beneficiary receives a lump-sum payment of the entire policy
proceeds due.
Cash Value -CORRECT ANSWER That part of an insurance policy that is the
equity amount legally available to the policyowner. The cash value accumulates
AND ANSWERS VERIFIED 100%| LATEST 2025 UPDATE
401 K Plan -CORRECT ANSWER A qualified retirement plan in which the
employee can set aside a portion of their income with pre-tax dollars.
Absolute Assignment v. Collateral Assignment -CORRECT ANSWER Absolute:
A permanent and irrevocable transfer of rights and/or benefits by the
policyowner. Collateral: A temporary and/or revocable transfer of benefits by
the policyowner.
Accelerated Death Benefits -CORRECT ANSWER Policy provision that allows
full or partial payment of the policy's death benefit before the insured's death if
he/she is terminally ill.
Accidental Death Benefit -CORRECT ANSWER An extra cost rider that requires
the insurance company to pay an additional benefit in the event that the insured
dies within 90 days of an accident as a direct result of the accident.
Accumulate at Interest -CORRECT ANSWER The Dividend Option where the
policyowner leaves the dividends with the insurer to invest and earn interest.
Adhesion -CORRECT ANSWER Since the insurer created all the documents of
the contract, any ambiguities in the contract will be settled in favor of the
insured. Since the insurer wrote the contract they are stuck with it.
Adverse Selection -CORRECT ANSWER The tendency for less favorable risks to
seek or continue insurance to a greater extent than more favorable risks.
,Agency Agreement or Agency Contract -CORRECT ANSWER A legal document
containing the terms of the agreement between the agent and the insurance
company. It clearly defines what an agent can and cannot do, and how he/she
will be compensated.
Agent Authorities -CORRECT ANSWER Expressed: Power or authority
specifically
granted in writing to an agent by the insurance
company in their Agency Agreement. Apparent:
Power or authority that the public reasonably
assumes an agent has based upon his/her
actions. Implied: Power or authority that is not
expressly granted by the company but that an
agent can assume or that are implied he/she has
in order to transact insurance business.
Agent/Producer -CORRECT ANSWER a legal representative of an insurance
company
Agent's Report -CORRECT ANSWER A written report from the agent submitted
to the insurer along with the application disclosing what the agent knows,
observed, or learned about the proposed insured's risks.
Aleatory -CORRECT ANSWER dependent on luck or chance
Annual Renewable Term -CORRECT ANSWER A Term Life Insurance contract
which gives the policyowner the option to renew the policy each year without
showing proof of insurability. Premiums increase at each renewal.
, Annuitant -CORRECT ANSWER The person that buys an annuity; may or may
not be an annuity's policyowner.
Annuity -CORRECT ANSWER A contract/policy that guarantees to pay income
for a specified period of time or for the life of the annuitant. Designed to
prevent people from outliving their savings.
Appointment -CORRECT ANSWER Authorization of an agent/producer by an
insurer to represent the company.
Blackout Period -CORRECT ANSWER The period of time between the youngest
child turning 16 and the widow(er) reaching retirement age during which no
Social Security Survivor Benefits are paid to the surviving spouse.
Buy-Sell Agreement -CORRECT ANSWER Business use of Life Insurance where
partners in a business buy life insurance on each other. They agree that when
one of them dies the survivors have the right to purchase the deceased partner's
share of the business. The death benefit from the insurance is used to finance the
purchase.
Cash Nonforfeiture Option -CORRECT ANSWER Policyowner receives a lump-
sum payment of the current cash value of the policy upon surrender of the
policy. The policy cannot be reinstated.
Cash Settlement Option -CORRECT ANSWER Upon maturity of an insurance
policy the beneficiary receives a lump-sum payment of the entire policy
proceeds due.
Cash Value -CORRECT ANSWER That part of an insurance policy that is the
equity amount legally available to the policyowner. The cash value accumulates
