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

Detailed Answer in Step-by-Step Solution:

Life insurance policies typically include a two-year suicide clause; if the insured dies by suicide within this period (e.g., six months), the insurer pays only a refund of premiums, not the full death benefit (C).

Options A (accidental injury), B (lung cancer), and D (heart attack) are covered causes, barring misrepresentation or exclusions, within the first two years.

The Virginia study guide notes that the suicide provision limits payment to premiums paid if suicide occurs within two years of issuance, protecting insurers from early intentional loss. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Life Insurance Policy Provisions."

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."

Detailed Answer in Step-by-Step Solution:

A foreign insurer (A) is an insurance company operating in a state other than its state of domicile (where it is incorporated).

A domestic insurer (B) operates in its home state. An alien insurer (C) is domiciled outside the U.S. A captive insurer (D) insures its parent company, not based on location.

The Virginia study guide defines a foreign insurer as one licensed to do business in Virginia but incorporated in another state, per insurance regulatory terminology. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Company Types."

Detailed Answer in Step-by-Step Solution:

Rebating (B) is the illegal practice of offering a portion of an agent’s commission or other financial incentives to induce a sale, prohibited in most states, including Virginia, to ensure fair competition.

Twisting (A) involves misrepresenting policies to replace existing coverage. Replacement (C) is switching policies, not necessarily with a rebate. Retention (D) is not a recognized term here.

The Virginia study guide defines rebating as an unfair trade practice under Virginia insurance law, aimed at preventing agents from undercutting prices with commission kickbacks. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Unfair Trade Practices."

Detailed Answer in Step-by-Step Solution:

Insurable risks require accidental loss (B), a large number of similar exposure units (C), and measurable loss (D) to allow statistical predictability and premium calculation.

Speculative risk (A), like gambling or business ventures, involves potential gain or loss and is not insurable, as insurance covers only pure risk (loss only).

The Virginia study guide distinguishes pure risk (insurable) from speculative risk (uninsurable), listing accidental, measurable, and widespread exposure as key criteria. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Risk and Insurance."

Detailed Answer in Step-by-Step Solution:

The Virginia Bureau of Insurance has authority to request and review an agent’s business records (C) to ensure compliance with state laws, without requiring a court order (A) or NAIC approval (B).

Option D (no access) is false; regulatory oversight overrides privacy in this context.

The Virginia study guide confirms that the Bureau of Insurance can demand records as part of its regulatory powers under Virginia insurance law, ensuring market conduct compliance. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Regulation."

Detailed Answer in Step-by-Step Solution:

The accumulation period (D) is the phase in a deferred annuity where premiums are paid to build value before payouts begin.

The liquidation period (A) is not a standard term here; it might imply payout but isn’t correct.

The annuity period (B) is when payments are received, not paid.

Period certain (C) refers to a payout option, not premium payment phase.

The Virginia study guide defines the accumulation period as the time during which premium payments are made into a deferred annuity, accumulating value until the payout phase. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Annuities."

Adjustable life insurance, per Virginia Code § 38.2-3113.1, blends whole and term features, allowing policyowners to adjust face amount and premiums. Option B is true; simultaneous changes (e.g., increasing face amount and premium) are possible, adapting coverage and cash value. Option A is false; higher premiums typically increase cash value, not decrease it, unless misallocated. Option C is incorrect; increasing face amount doesn’t inherently extend term duration—it adjusts cost or cash value. Option D is false; face amount increases don’t shorten whole life premium periods, which are fixed or flexible based on design. The study guide likely highlights adjustability with examples—e.g., raising $100,000 to $150,000 with a premium hike—making B the true capability.

Detailed Answer in Step-by-Step Solution:

An absolute assignment transfers all ownership rights (C) of a life insurance policy to a new owner, relinquishing the original owner’s control.

Option A (limited rights) is a partial assignment. Option B (premium payment) is not ownership. Option D (collateral) is a collateral assignment, not absolute.

The Virginia study guide defines absolute assignment as the complete transfer of all policy rights to a new owner, distinct from collateral assignments for loans. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Policy Assignments."

Detailed Answer in Step-by-Step Solution:

Term life insurance (B) provides coverage for a specified period (temporary protection) and does not accumulate cash value.

Option A (cash value) applies to permanent life insurance, not term.

Option C (five years or less) is false; term policies can span 10, 20, or 30 years.

Option D (same premium) is incorrect; renewable term policies increase premiums at renewal based on age.

The Virginia study guide describes term life insurance as temporary coverage with no cash value, contrasting it with permanent policies. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Types of Life Insurance."