Pass the Insurance Licensing Virginia Insurance License Virginia-Life-Annuities-and-Health-Insurance Questions and answers with CertsForce

Virginia Code § 38.2-3106 governs life insurance delivery, where insurers may require a statement of good health (option B) at policy issuance to confirm no material health changes occurred since the application (e.g., a new cancer diagnosis). This signed document protects the insurer from undisclosed risks between underwriting and delivery, potentially voiding coverage if false (subject to incontestability, § 38.2-3105). Option A (disclosure notice) relates to privacy or policy terms, not health updates. Option C (conditional receipt) is issued at application with premium payment, providing temporary coverage, not a delivery requirement. Option D (notice of information practices) informs about data use (per § 38.2-604), not health status. The study guide likely illustrates this with a scenario—e.g., an insured signing to confirm no heart attack post-application—making B the standard practice.

Detailed Answer in Step-by-Step Solution:

Excess charges in Medicare occur when a provider charges more than the Medicare-approved amount, and the insured (D) is responsible for the difference unless covered by supplemental insurance.

The Social Security Administration (A) and CMS (B) administer Medicare, not pay claims.

Providers (C) may charge excess but don’t absorb it unless they accept assignment.

The Virginia study guide explains that Medicare beneficiaries bear excess charges unless a provider accepts Medicare assignment or a Medigap policy covers them. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Medicare Basics."

Detailed Answer in Step-by-Step Solution:

Agents assist underwriting by collecting application data (A), obtaining additional info (C), and reporting material facts (D), but determining the final rate classification (B) is the insurer’s underwriter’s role, not the agent’s.

Rate classification involves risk assessment, which is beyond an agent’s authority.

The Virginia study guide specifies that agents facilitate underwriting by providing accurate information, while the insurer’s underwriters set rates based on that data. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Underwriting Process."

Business Overhead Expense (BOE) insurance is designed to cover the fixed overhead expenses of a business when the business owner becomes disabled. This includes things like payroll, rent, utilities, and other operational costs. It ensures that the business can continue to operate during the owner's period of disability. Workers compensation insurance, on the other hand, provides coverage for employees' work-related injuries, while BOE is specifically for business owners.

Detailed Answer in Step-by-Step Solution:

Accidental death and dismemberment (AD&D) insurance (B) provides a lump sum benefit for specific losses, such as loss of sight in both eyes, due to an accident.

Hospital expense (A) covers hospital stays, not lump sums for dismemberment.

Major medical (C) and medical expense (D) cover healthcare costs, not specific injury benefits.

The Virginia study guide describes AD&D as providing lump sum payments for accidental death or specific injuries like loss of sight, distinct from medical expense coverage. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Health Insurance Types."

The primary purpose of disability income insurance is to replace a portion of the insured’s income when they are unable to work due to illness or injury. It is not designed to cover hospital or physician expenses (those fall under medical insurance). Instead, it ensures that the insured continues to receive income during periods of disability.

The purchaser of a deferred annuity typically intends for the income benefits to begin on a specified date, often years after issuance. The purpose of a deferred annuity is to allow the policyholder to accumulate funds during the deferral period, and then begin receiving periodic payments at a later date, such as retirement. This is in contrast to immediate annuities, which start paying out shortly after the annuity is purchased.

Virginia Code § 38.2-3501 requires health insurance applications to include essential details for underwriting and contract formation: the applicant’s name and address (option A), signature (option B) to affirm accuracy, and date (option C) to establish timing. These are mandatory for a complete application. Option D (initial premium) is not required on the application itself; while payment may accompany it to bind coverage (e.g., via a conditional receipt), it’s a separate transaction, not an application component. The study guide likely lists these elements in a sample application, noting that premium submission is optional until acceptance, making D the exception.

Virginia’s Unfair Claims Settlement Practices Act prohibits insurers or agents from misrepresenting facts or policy provisions relating to coverage. Doing so after a loss is classified as an unfair claims settlement practice.

Exact Extract (Virginia Unfair Claims Settlement Law): “Misrepresenting pertinent facts or policy provisions relating to coverages at issue is an unfair claim settlement practice.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-510 (Unfair claim settlement practices)

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."