Free Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam 2026 Practice Materials Collection
Virginia-Life-Annuities-and-Health-Insurance Exam Info and Free Practice Test All-in-One Exam Guide May-2026
Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Exam Syllabus Topics:
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NEW QUESTION # 119
The reinstatement provision in individual health insurance:
- A. Requires that all reinstatement applications must be approved by the Bureau of Insurance
- B. Allows the insured to change statements made in the application
- C. Reinstates the amount of insurance after payment of a loss
- D. Allows the insured to reinstate the policy after coverage lapses for nonpayment of premium
Answer: D
Explanation:
Detailed Answer in Step-by-Step Solution:
The reinstatement provision in health insurance allows a policy that lapsed due to nonpayment of premiums to be restored (B), typically within a set period (e.g., 3 years), if the insured pays back premiums and meets conditions like proving insurability.
Option A (reinstates amount after loss) relates to property insurance, not health.
Option C (change application statements) is unrelated to reinstatement.
Option D (Bureau approval) is false; reinstatement is handled by the insurer, not a regulatory body.
The Virginia study guide explains that the reinstatement provision protects policyholders by allowing revival of a lapsed health policy upon payment of overdue premiums and, if required, evidence of insurability. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Health Insurance Policy Provisions."
NEW QUESTION # 120
For a life insurance accidental death benefit to be paid, all of the following conditions usually must be satisfied EXCEPT:
- A. Death must result from accidental bodily injury
- B. The injury must occur prior to some specified age
- C. Death must occur within a specified number of days after the injury
- D. Death must result from a job-related injury
Answer: D
Explanation:
Accidental death benefit riders require proof of accidental cause, timely death after injury, and age restrictions. They do not require the death to be work-related. Exact extract: "Accidental death benefits are payable if death results from accidental injury, occurs within a stated period (often 90 days), and before a specified age, usually 60-65." Job-relatedness is irrelevant unless specifically excluded (e.g., hazardous occupation).
Reference:
NEW QUESTION # 121
The injury or damage sustained by the insured is called:
- A. A claim
- B. A loss
- C. An accident
- D. A peril
Answer: B
Explanation:
Virginia Code § 38.2-100 et seq. defines insurance terms. A loss (option C) is the actual injury or damage sustained (e.g., a broken leg or burned house), the event insurance covers. Option A (claim) is the request for payment post-loss, not the loss itself. Option B (peril) is the cause (e.g., fire, collision), not the result. Option D (accident) is a type of peril or event, not the damage. The study guide likely clarifies this chain-e.g., a car crash (peril/accident) causes $5,000 damage (loss), prompting a claim-using examples to distinguish loss as the outcome, making C the precise term.
NEW QUESTION # 122
Short-term group disability income insurance:
- A. Usually coordinates the amount of benefits paid with disability benefits received under Social Security
- B. Usually provides benefits expressed as a percentage of the insured's normal weekly wage, up to a specified weekly maximum
- C. Frequently provides coverage through age 65 for insureds who are over 55 when they become disabled
- D. Often has a benefit period extending up to a maximum of ten years
Answer: B
Explanation:
Virginia exam materials describe standard STD plan design as wage-replacement for a short duration with a weekly cap; integration with Social Security and multi-year benefit periods are characteristics of long-term disability (LTD), not STD. Exact extract (Study Guide): "Short-Term Disability (STD) pays weekly benefits, typically 50%-60% of earnings, subject to a weekly maximum, for a short duration (commonly up to 13-26 weeks)." "Coordination with Social Security benefits is generally a feature of LTD, not STD."
NEW QUESTION # 123
In Virginia, a group health certificate of insurance must contain:
- A. The insurer's financial statement
- B. A list of all participating physicians
- C. A summary of policy features and benefits
- D. A copy of the group contract
Answer: C
Explanation:
Virginia law requires insurers to provide each group member with a certificate that summarizes the group policy's benefits and features, including coverage, exclusions, and how to file claims.
Exact Extract (Virginia Group Health Law): "Each individual insured under a group health policy shall be provided with a certificate summarizing the essential features of the insurance coverage." Reference (Virginia Documents / Study Guide):
- Code of Virginia §38.2-3521.2 (Certificates of coverage under group health policies)
NEW QUESTION # 124
Life insurance policies are required to have all of the following provisions EXCEPT:
- A. The grace period clause
- B. The incontestability clause
- C. The waiver of premium clause
- D. The misstatement of age clause
Answer: C
Explanation:
Detailed Answer in Step-by-Step Solution:
Life insurance policies must include a misstatement of age clause (B), grace period clause (C), and incontestability clause (D) as standard provisions under state law.
The waiver of premium clause (A) is optional, typically a rider, not a required provision.
The Virginia study guide lists mandatory life insurance provisions (e.g., grace period, incontestability, misstatement of age) but notes that waiver of premium is an optional benefit, not required. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Life Insurance Policy Provisions."
NEW QUESTION # 125
(The owner's cost basis in a non-qualified deferred annuity is usually equal to the:)
- A. Guaranteed cash value
- B. Opportunity cost
- C. Total premiums paid
- D. Actual cash value
Answer: C
Explanation:
In a non-qualified deferred annuity, the owner's cost basis is the total amount of premiums paid into the contract. This figure is used to determine the taxable and non-taxable portions of withdrawals and annuity payments.
Earnings in the annuity grow tax-deferred, and when distributions occur, amounts exceeding the cost basis are taxable as ordinary income. Opportunity cost and cash values are unrelated to tax basis calculations.
Virginia exam standards emphasize understanding cost basis to correctly apply annuity taxation rules, making option B correct.
NEW QUESTION # 126
Which expenses are covered by Medicare Part D?
- A. Prescription drug
- B. Hospital
- C. Dental
- D. Medical
Answer: A
Explanation:
Detailed Answer in Step-by-Step Solution:
* Medicare Part D (C) specifically covers prescription drug costs for enrollees.
* Medical expenses (A) are under Part B, hospital costs (B) under Part A, and dental (D) is generally not covered by Medicare unless supplemental.
The Virginia study guide states that Medicare Part D, introduced in 2006, provides prescription drug coverage through private plans, distinct from Parts A and B. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Medicare."
NEW QUESTION # 127
Since HMOs negotiate provider networks in advance of care, HMO members:
- A. Are encouraged to carry individual health insurance coverage
- B. Have a limited choice of care providers
- C. Waive the right to re-enroll in an insurance company indemnity plan
- D. Pay the entire cost for all use of non-HMO providers, regardless of circumstances
Answer: B
Explanation:
Detailed Answer in Step-by-Step Solution:
* HMOs limit members to a pre-negotiated network of providers (B), restricting choice to control costs.
* Non-network care (A) may be covered in emergencies, not always fully out-of-pocket. Options C (waive re-enrollment) and D (individual coverage) are not HMO features.
The Virginia study guide describes HMOs as managed care plans with a restricted provider network, emphasizing cost control through limited choice. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Managed Care Plans."
NEW QUESTION # 128
When a five-year renewable term life insurance policy issued at age 35 is renewed, the premium rate will be the current rate for:
- A. Yearly renewable term insurance for a person aged 35
- B. Five-year term insurance for a person aged 35
- C. Five-year term insurance for a person aged 40
- D. Yearly renewable term insurance for a person aged 40
Answer: C
Explanation:
Renewable term insurance renews at the insured's attained age, not the original issue age. Thus, at renewal after five years, the premium is based on age 40 rates.
Exact Extract (Virginia Life Insurance Study Guide): "Renewable term-premiums increase at renewal based on the insured's attained age." Reference (Virginia Documents / Study Guide):
- Virginia Life Insurance Examination Outline, Term Insurance Features
NEW QUESTION # 129
(In cases where there are ambiguities in a contract of adhesion, courts will typically interpret the contract according to the:)
- A. decision of an arbitrator appointed by the insurer
- B. reasonable expectations of the party which offered the contract
- C. reasonable expectations of the weaker party to the contract
- D. technical meaning of the contract as it was written
Answer: C
Explanation:
Insurance contracts are contracts of adhesion, meaning they are drafted by one party-the insurer-and offered to the other party-the insured-on a take-it-or-leave-it basis. Because the insured has little or no ability to negotiate terms, courts apply special rules when interpreting ambiguous language. If a policy provision is unclear, courts generally interpret the ambiguity in favor of the insured, who is considered the weaker party. This approach protects consumers and encourages insurers to draft clear and precise policy language. Courts do not favor the insurer's intent, technical interpretations, or decisions made by arbitrators when ambiguity exists. The guiding principle is fairness and reasonable expectations of the insured.
NEW QUESTION # 130
Shifting the individual's risk of loss to a larger, similar group is known as risk:
- A. Transfer
- B. Reduction
- C. Assumption
- D. Avoidance
Answer: A
Explanation:
Insurance operates on the principle of risk transfer. The insured transfers the financial risk of loss to the insurer, which spreads the risk across a large group of policyholders.
Exact Extract (Virginia Insurance Fundamentals Study Guide): "Insurance is a mechanism of risk transfer, shifting the burden of loss from an individual to an insurer, which distributes the risk across many insureds." Reference (Virginia Documents / Study Guide):
- Virginia General Insurance Concepts, Risk Management Techniques
NEW QUESTION # 131
Which is a lawful cause for cancellation of an individual long-term care insurance policy by the insurer?
- A. Nuisance claims
- B. Nonpayment of premium
- C. Insurer insolvency
- D. Medicaid eligibility
Answer: B
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.
NEW QUESTION # 132
When a small employer health insurance plan is offered, it must be available:
- A. Only to employees who provide evidence of insurability
- B. To all eligible employees who apply
- C. Only to employees under age 65
- D. To all eligible employees after a 12-month waiting period
Answer: B
Explanation:
Virginia Code § 38.2-3431 et seq., aligned with the ACA, requires small employer health plans (1-50 employees) to offer coverage to all eligible employees who apply, without discrimination based on health status or other factors. "Eligible" typically means full-time employees meeting the employer's criteria (e.g.,
30+ hours/week). Option A reflects this guaranteed issue mandate, ensuring broad access. Option B (12- month waiting period) is false; Virginia and federal law cap waiting periods at 90 days (Virginia Code § 38.2-
3445), not 12 months. Option C (evidence ofinsurability) contradicts guaranteed issue rules for small groups, which prohibit medical underwriting. Option D (under age 65) is incorrect; coverage extends to all eligible employees regardless of age, though Medicare coordination may apply post-65. The study guide likely stresses this inclusivity as a cornerstone of small group market reforms, making A the correct answer.
NEW QUESTION # 133
Under which type of policy are benefit payments treated as taxable income?
- A. Key person disability income
- B. Individual disability income
- C. Disability buy-sell
- D. Business overhead expense
Answer: B
Explanation:
Detailed Answer in Step-by-Step Solution:
* Individual disability income (C) benefits are taxable if the insured paid premiums with pre-tax dollars (e.g., employer-paid), but tax-free if paid with after-tax dollars. The question implies taxable benefits, typical when premiums are deductible.
* Business overhead expense (A), disability buy-sell (B), and key person disability (D)benefits are generally tax-free to the business or recipient, as premiums are not deductible.
The Virginia study guide, per IRS rules, states that individual disability income benefits are taxable if premiums were paid pre-tax (e.g., by an employer), unlike business-related disability policies where benefits serve specific tax-exempt purposes. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Taxation of Insurance Benefits."
NEW QUESTION # 134
The PRIMARY purpose of credit life insurance is to:
- A. Act as a short-term savings vehicle for an individual.
- B. Pay off debt if an individual passes away.
- C. Cover loan payments should an individual become ill.
- D. Increase an individual's ability to obtain financing.
Answer: B
Explanation:
The primary purpose of credit life insurance is to pay off the outstanding debt of a borrower in the event of their death. This ensures that the borrower's family or estate is not burdened with the debt after their passing. It does not cover illness, act as a savings vehicle, or directly increase financing ability.
NEW QUESTION # 135
The premium for a children's rider on a life insurance policy:
- A. Remains the same regardless of the number of children
- B. Automatically increases each year
- C. Is based upon the age of the parents
- D. Increases with the birth or adoption of additional children
Answer: A
Explanation:
Children's riders provide coverage for all eligible children in the family under one flat premium. Additional children are automatically covered without an increase. Exact extract: "Children's riders charge one level premium regardless of the number of children insured; coverage automatically includes children born or adopted after issue." Reference:
NEW QUESTION # 136
(Which type of life insurance policy allows for policy loans as well as withdrawals from the cash value?)
- A. Term life
- B. Universal life
- C. Whole life
- D. Permanent life
Answer: B
Explanation:
Universal life insurance is a type of permanent life insurance that provides flexible premiums, adjustable death benefits, and a cash value component. One distinguishing feature of universal life is that it allows policyowners to access cash value through both policy loans and partial withdrawals. Withdrawals permanently reduce the cash value and may also reduce the death benefit, while policy loans accrue interest and must be repaid to avoid reducing benefits. Whole life insurance generally allows policy loans but not partial withdrawals of cash value. Term life insurance does not accumulate cash value and therefore does not allow loans or withdrawals. While "permanent life" is a broad category, universal life is the specific policy type that permits both loans and withdrawals, making it the correct answer.
NEW QUESTION # 137
In individual health insurance, the insured's application:
- A. Has no bearing on the insurance contract once a policy has been issued
- B. Becomes part of the agent's permanent file once the policy has been approved
- C. Becomes a part of the insurance contract when attached to the policy
- D. Is kept as part of the insurer's permanent files only if the applicant is rejected
Answer: C
Explanation:
In individual health insurance, the insured's application becomes a part of the insurance contract when attached to the policy. The application is considered part of the contract, and the insurer may use it to evaluate the risk and determine the premium. If the policy is issued, the application is typically attached to the policy, becoming a permanent part of the contract.
NEW QUESTION # 138
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