Virginia Insurance Virginia Life Annuities and Health Insurance Practice Exams
Last updated on Oct 22,2026- Exam Code: Virginia Life Annuities and Health Insurance
- Exam Name: Virginia Life, Annuities, and Health Insurance Examination Series 11-01
- Certification Provider: Virginia Insurance
- Latest update: Oct 22,2026
Question #101
Which expenses are covered by Medicare Part D?
- A . Medical
- B . Hospital
- C . Prescription drug
- D . Dental
Correct Answer: C
C
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."
C
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."
Question #102
The "free look" provision in individual health insurance allows the insured a period of time to:
- A . Try a policy without paying for it
- B . Compare insurance policies
- C . Change coverage on a policy without changing the premium
- D . Cancel the policy and receive a full refund
Correct Answer: D
D
Explanation:
Virginia Code § 38.2-3502 mandates a “free look” period (typically 10 days) for individual health insurance, allowing the insured to review the policy and cancel it with a full premium refund (option D) if returned within that time.
Option A (try without paying) is false; premiums are paid upfront, refundable only upon cancellation.
Option B (compare policies) is a practical use but not the legal purpose; the provision ensures cancellation rights, not comparison.
Option C (change coverage) isn’t allowed; modifications require underwriting, not free-look terms. The study guide likely details this consumer protection with examples―e. g., returning a policy on day 9 for a refund―making D the precise right.
D
Explanation:
Virginia Code § 38.2-3502 mandates a “free look” period (typically 10 days) for individual health insurance, allowing the insured to review the policy and cancel it with a full premium refund (option D) if returned within that time.
Option A (try without paying) is false; premiums are paid upfront, refundable only upon cancellation.
Option B (compare policies) is a practical use but not the legal purpose; the provision ensures cancellation rights, not comparison.
Option C (change coverage) isn’t allowed; modifications require underwriting, not free-look terms. The study guide likely details this consumer protection with examples―e. g., returning a policy on day 9 for a refund―making D the precise right.
Question #103
One characteristic of flexible premium life insurance is that payment of the premium can be altered at the option of:
- A . The policyowner
- B . The contingent beneficiary
- C . The insurer, if the Consumer Price Index has risen at least 10% over the past year
- D . The insurer, if the prime interest rate falls below 6%
Correct Answer: A
A
Explanation:
Flexible premium life insurance, such as universal life (Virginia Code § 38.2-3113.1), allows the policyowner to adjust premium payments within policy limits (e.g., minimum to maintain coverage, maximum for tax advantages), offering flexibility over fixed-premium plans like whole life.
Option A correctly identifies the policyowner as the decision-maker.
Option B (contingent beneficiary) is false; beneficiaries have no control over premiums. Options C and D tie adjustments to economic indices (CPI, interest rates), but Virginia law and standard policies don’t grant insurers unilateral premium-changing rights based on these factors― flexibility is the policyowner’s prerogative, subject to cash value sufficiency. The study guide likely contrasts this with traditional policies, using examples of skipped or increased payments, confirming A as the defining trait.
A
Explanation:
Flexible premium life insurance, such as universal life (Virginia Code § 38.2-3113.1), allows the policyowner to adjust premium payments within policy limits (e.g., minimum to maintain coverage, maximum for tax advantages), offering flexibility over fixed-premium plans like whole life.
Option A correctly identifies the policyowner as the decision-maker.
Option B (contingent beneficiary) is false; beneficiaries have no control over premiums. Options C and D tie adjustments to economic indices (CPI, interest rates), but Virginia law and standard policies don’t grant insurers unilateral premium-changing rights based on these factors― flexibility is the policyowner’s prerogative, subject to cash value sufficiency. The study guide likely contrasts this with traditional policies, using examples of skipped or increased payments, confirming A as the defining trait.
Question #104
When the business of insurance is no longer conducted under an assumed name, an agent must notify:
- A . The Bureau of Insurance
- B . The National Association of Insurance Commissioners
- C . The Chamber of Commerce
- D . The Surety Organization of Virginia
Correct Answer: A
A
Explanation:
Detailed Answer in Step-by-Step Solution:
Agents must notify the Virginia Bureau of Insurance (A) of changes like discontinuing an assumed name, as it regulates licensing and business conduct.
The NAIC (B), Chamber (C), and Surety Organization (D) have no direct authority over this requirement.
The Virginia study guide mandates that agents report significant business changes, including assumed name cessation, to the Bureau of Insurance per state law.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Agent Responsibilities."
A
Explanation:
Detailed Answer in Step-by-Step Solution:
Agents must notify the Virginia Bureau of Insurance (A) of changes like discontinuing an assumed name, as it regulates licensing and business conduct.
The NAIC (B), Chamber (C), and Surety Organization (D) have no direct authority over this requirement.
The Virginia study guide mandates that agents report significant business changes, including assumed name cessation, to the Bureau of Insurance per state law.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Agent Responsibilities."
Question #105
One premium payment covers which period of time in a single premium whole life policy?
- A . One month
- B . One year
- C . To the insured’s age 65
- D . The full life of the policy
Correct Answer: D
D
Explanation:
Detailed Answer in Step-by-Step Solution:
A single premium whole life policy is a type of permanent life insurance where the entire premium for the policy’s lifetime coverage is paid in one lump sum at issuance.
Unlike policies with recurring premiums (e.g., monthly or annual), this single payment funds the policy for the insured’s full life (D).
Options A (one month) and B (one year) apply to term or recurring premium policies.
Option C (to age 65) might relate to limited-pay policies, not single premium ones.
Per the Virginia study guide, a single premium whole life policy requires one payment upfront, providing coverage for the insured’s entire life and building immediate cash value.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Types of Life Insurance Policies."
D
Explanation:
Detailed Answer in Step-by-Step Solution:
A single premium whole life policy is a type of permanent life insurance where the entire premium for the policy’s lifetime coverage is paid in one lump sum at issuance.
Unlike policies with recurring premiums (e.g., monthly or annual), this single payment funds the policy for the insured’s full life (D).
Options A (one month) and B (one year) apply to term or recurring premium policies.
Option C (to age 65) might relate to limited-pay policies, not single premium ones.
Per the Virginia study guide, a single premium whole life policy requires one payment upfront, providing coverage for the insured’s entire life and building immediate cash value.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Types of Life Insurance Policies."
Question #106
What is the effect on a life insurance policy if the insured fails to repay the full value of loans taken against the policy?
- A . The premium is increased.
- B . Dividends are suspended.
- C . The death benefit is reduced.
- D . The policy lapses immediately.
Correct Answer: C
C
Explanation:
Virginia Code § 38.2-3205 governs policy loans in life insurance. When an insured borrows against the policy’ s cash value and fails to repay the loan (principal plus interest), the outstanding amount is deducted from the death benefit upon the insured’s death.
Option C correctly states this reduction.
Option A is false; premiums are fixed unless the policy is adjustable, and loans don’t alter them.
Option B is incorrect; dividends depend on insurer performance and policy terms, not loan repayment, though they might be applied to reduce the loan if elected.
Option D is wrong; immediate lapse occurs only if the loan exceeds the cash value and premiums aren’t paid, not simply from non-repayment. The study guide likely stresses that the death benefit is the primary adjustment mechanism, ensuring the insurer recovers the loan while honoring the policy, making Cthe accurate choice.
C
Explanation:
Virginia Code § 38.2-3205 governs policy loans in life insurance. When an insured borrows against the policy’ s cash value and fails to repay the loan (principal plus interest), the outstanding amount is deducted from the death benefit upon the insured’s death.
Option C correctly states this reduction.
Option A is false; premiums are fixed unless the policy is adjustable, and loans don’t alter them.
Option B is incorrect; dividends depend on insurer performance and policy terms, not loan repayment, though they might be applied to reduce the loan if elected.
Option D is wrong; immediate lapse occurs only if the loan exceeds the cash value and premiums aren’t paid, not simply from non-repayment. The study guide likely stresses that the death benefit is the primary adjustment mechanism, ensuring the insurer recovers the loan while honoring the policy, making Cthe accurate choice.
Question #107
Under IRS rules, a company normally may do all of the following with funds in a qualified retirement plan EXCEPT:
- A . Invest in shares of common stocks
- B . Make allocations to participating shareholder-employees
- C . Distribute vested funds to employees who leave
- D . Repossess the funds for business purposes
Correct Answer: D
D
Explanation:
Detailed Answer in Step-by-Step Solution:
Qualified retirement plans allow investments in stocks (A), allocations to participants (B), and distributions of vested funds (C), but repossessing funds for business use (D) violates IRS rules, as funds are held in trust for employees’ benefit.
The Virginia study guide, per IRS regulations, states that qualified plan assets are protected for participants and cannot be diverted for business purposes, ensuring retirement security.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Retirement Plans."
D
Explanation:
Detailed Answer in Step-by-Step Solution:
Qualified retirement plans allow investments in stocks (A), allocations to participants (B), and distributions of vested funds (C), but repossessing funds for business use (D) violates IRS rules, as funds are held in trust for employees’ benefit.
The Virginia study guide, per IRS regulations, states that qualified plan assets are protected for participants and cannot be diverted for business purposes, ensuring retirement security.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Retirement Plans."
Question #108
Which policy provision allows an employee to change from group coverage to an individual life insurance policy?
- A . Nonforfeiture
- B . Conversion
- C . Assignment
- D . Incontestability
Correct Answer: B
B
Explanation:
Virginia Code § 38.2-3330 requires group life insurance policies to include a conversion provision, allowing an employee to convert group coverage to an individual policy without evidence of insurability, typically within 31 days after termination of employment or group eligibility.
Option B (conversion) directly describes this right, ensuring continued protection.
Option A (nonforfeiture) applies to cash value options (e.g., reduced paid-up insurance) in individual policies, not group-to-individual transitions.
Option C (assignment) transfers policy ownership, unrelated to conversion.
Option D (incontestability) limits the insurer’s ability to deny claims after a period (e.g., 2 years), not a conversion mechanism. The study guide likely highlights conversion as a key group life feature, with scenarios like an employee leaving a job and converting to a whole life policy, making B the precise answer.
B
Explanation:
Virginia Code § 38.2-3330 requires group life insurance policies to include a conversion provision, allowing an employee to convert group coverage to an individual policy without evidence of insurability, typically within 31 days after termination of employment or group eligibility.
Option B (conversion) directly describes this right, ensuring continued protection.
Option A (nonforfeiture) applies to cash value options (e.g., reduced paid-up insurance) in individual policies, not group-to-individual transitions.
Option C (assignment) transfers policy ownership, unrelated to conversion.
Option D (incontestability) limits the insurer’s ability to deny claims after a period (e.g., 2 years), not a conversion mechanism. The study guide likely highlights conversion as a key group life feature, with scenarios like an employee leaving a job and converting to a whole life policy, making B the precise answer.
Question #109
Which is true about a joint and survivor annuity?
- A . The benefits are payable throughout the lifetimes of two or more people.
- B . The benefits cease when the surviving annuitant reaches life expectancy.
- C . It is a combination of an annuity and whole life insurance.
- D . Each annuitant must provide evidence of insurability.
Correct Answer: A
A
Explanation:
A joint and survivor annuity, as outlined in Virginia Code § 38.2-3100 et seq., is an annuity contract that pays benefits as long as at least one of the named annuitants (typically two, such as spouses) is alive.
Option A accurately reflects this, stating benefits continue throughout their lifetimes, ceasing only upon the last survivor’s death.
Option B is false because payments aren’t tied to life expectancy but to actual survival, per standard annuity terms in the study guide.
Option C is incorrect; an annuity provides income, while whole life insurance offers a death benefit―combining them is a different product (e.g., a universal life policy), not a joint and survivor annuity.
Option D is wrong because annuities, unlike life insurance, don’t typically require evidence of insurability, as they’re based on longevity, not mortality risk (Virginia Code § 38.2-3113). The study guide emphasizes the lifetime payment feature as the defining trait, confirming A.
A
Explanation:
A joint and survivor annuity, as outlined in Virginia Code § 38.2-3100 et seq., is an annuity contract that pays benefits as long as at least one of the named annuitants (typically two, such as spouses) is alive.
Option A accurately reflects this, stating benefits continue throughout their lifetimes, ceasing only upon the last survivor’s death.
Option B is false because payments aren’t tied to life expectancy but to actual survival, per standard annuity terms in the study guide.
Option C is incorrect; an annuity provides income, while whole life insurance offers a death benefit―combining them is a different product (e.g., a universal life policy), not a joint and survivor annuity.
Option D is wrong because annuities, unlike life insurance, don’t typically require evidence of insurability, as they’re based on longevity, not mortality risk (Virginia Code § 38.2-3113). The study guide emphasizes the lifetime payment feature as the defining trait, confirming A.
Question #110
Life insurance policies are required to have all of the following provisions EXCEPT:
- A . The waiver of premium clause
- B . The misstatement of age clause
- C . The grace period clause
- D . The incontestability clause
Correct Answer: A
A
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."
A
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."