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 #111
All of the following are dividend options in life insurance policies EXCEPT:
- A . Applying the dividends to reduce the premium due
- B . Using the dividends to purchase additional paid-up life insurance
- C . Accumulating the dividends with interest
- D . Receiving the entire policy cash value
Correct Answer: D
D
Explanation:
Virginia Code § 38.2-3207 allows participating life policies to offer dividend options: option A (reduce premium), option B (buy paid-up additions increasing coverage), and option C (accumulate with interest) are standard, reflecting insurer profits shared with policyowners.
Option D (receiving the entire cash value) isn’t a dividend option; it’s a surrender or nonforfeiture action, terminating the policy, not distributing profits. The study guide likely lists these options with examples―e.g., $100 dividend reducing a $500 premium (A)― contrasting them with cash value withdrawal, making D the exception.
D
Explanation:
Virginia Code § 38.2-3207 allows participating life policies to offer dividend options: option A (reduce premium), option B (buy paid-up additions increasing coverage), and option C (accumulate with interest) are standard, reflecting insurer profits shared with policyowners.
Option D (receiving the entire cash value) isn’t a dividend option; it’s a surrender or nonforfeiture action, terminating the policy, not distributing profits. The study guide likely lists these options with examples―e.g., $100 dividend reducing a $500 premium (A)― contrasting them with cash value withdrawal, making D the exception.
Question #112
A health maintenance organization (HMO) member receives all preventive and routine medical care from the:
- A . Primary care physician
- B . Medical director
- C . Routine care physician
- D . Provider association
Correct Answer: A
A
Explanation:
Virginia Code § 38.2-4303 defines the HMO model, where the primary care physician (PCP, option A) acts as the gatekeeper, delivering preventive (e.g., vaccines) and routine care (e.g., checkups), and coordinating referrals.
Option B (medical director) oversees HMO operations, not direct care.
Option C (routine care physician) isn’t a standard term; the PCP fills this role.
Option D (provider association) might imply a network, but care comes from the individual PCP, not a collective. The study guide likely explains the PCP’s central role with examples―e.g., a member seeing their PCP for a flu shot―highlighting HMO cost-control via this structure, making A the correct provider.
A
Explanation:
Virginia Code § 38.2-4303 defines the HMO model, where the primary care physician (PCP, option A) acts as the gatekeeper, delivering preventive (e.g., vaccines) and routine care (e.g., checkups), and coordinating referrals.
Option B (medical director) oversees HMO operations, not direct care.
Option C (routine care physician) isn’t a standard term; the PCP fills this role.
Option D (provider association) might imply a network, but care comes from the individual PCP, not a collective. The study guide likely explains the PCP’s central role with examples―e.g., a member seeing their PCP for a flu shot―highlighting HMO cost-control via this structure, making A the correct provider.
Question #113
An individual or business entity conducting business under an assumed or fictitious name must notify the Bureau of Insurance either at the time the license application is filed or:
- A . Within 30 calendar days from the date the name is adopted
- B . Within 60 calendar days from when the first policy is sold under the assumed name
- C . At the time of license renewal
- D . 30 days before the assumed name is no longer being used
Correct Answer: A
A
Explanation:
Virginia Code § 38.2-1820 requires licensees (agents, agencies, or other entities) operating under an assumed or fictitious name to register that name with the Bureau of Insurance. This ensures transparency and consumer protection by linking all business names to the licensed entity. The statute specifies notification either at the time of license application or within 30 calendar days after adopting the assumed name, making option A correct. This timeline allows the Bureau to update records promptly without undue delay.
Option B (60 days from first policy sale) introduces an unrelated trigger―policy sales―and extends the period beyond Virginia’ s requirement, making it incorrect.
Option C (license renewal) delays notification unnecessarily, as renewals occur biennially (Virginia Code § 38.2-1822), conflicting with the need for timely registration.
Option D (30 days before discontinuing the name) is illogical; notification is required when adopting, not abandoning, a name. The study guide likely stresses this 30-day rule to ensure compliance with Virginia’s licensing oversight, reinforcing A as the precise answer based on regulatory intent and practice.
A
Explanation:
Virginia Code § 38.2-1820 requires licensees (agents, agencies, or other entities) operating under an assumed or fictitious name to register that name with the Bureau of Insurance. This ensures transparency and consumer protection by linking all business names to the licensed entity. The statute specifies notification either at the time of license application or within 30 calendar days after adopting the assumed name, making option A correct. This timeline allows the Bureau to update records promptly without undue delay.
Option B (60 days from first policy sale) introduces an unrelated trigger―policy sales―and extends the period beyond Virginia’ s requirement, making it incorrect.
Option C (license renewal) delays notification unnecessarily, as renewals occur biennially (Virginia Code § 38.2-1822), conflicting with the need for timely registration.
Option D (30 days before discontinuing the name) is illogical; notification is required when adopting, not abandoning, a name. The study guide likely stresses this 30-day rule to ensure compliance with Virginia’s licensing oversight, reinforcing A as the precise answer based on regulatory intent and practice.
Question #114
At policy delivery, to ensure that the insured has NOT experienced adverse medical conditions since the time of application for life insurance, the insured may be required to sign a:
- A . Disclosure notice
- B . Statement of good health
- C . Conditional receipt
- D . Notice of information practices
Correct Answer: B
B
Explanation:
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.
B
Explanation:
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.
Question #115
What type of insurance pays a lump sum benefit if an insured loses sight in both eyes?
- A . Hospital expense
- B . Accidental death and dismemberment
- C . Major medical
- D . Medical expense
Correct Answer: B
B
Explanation:
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."
B
Explanation:
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."
Question #116
An insurer operating in the U.S. but headquartered outside the U.S. is:
- A . A foreign insurer
- B . An alien insurer
- C . A captive insurer
- D . A reciprocal insurance exchange
Correct Answer: B
B
Explanation:
Detailed Answer in Step-by-Step Solution:
An alien insurer (B) is headquartered outside the U.S. but licensed to operate within it, distinguishing it from a foreign insurer (A), which is domiciled in another U.S. state.
A captive insurer (C) insures its parent company, and a reciprocal exchange (D) is a mutual insurance structure, neither based on location.
The Virginia study guide defines an alien insurer as one incorporated outside the U.S., operating under state licensing, per standard insurance terminology.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Company Types."
B
Explanation:
Detailed Answer in Step-by-Step Solution:
An alien insurer (B) is headquartered outside the U.S. but licensed to operate within it, distinguishing it from a foreign insurer (A), which is domiciled in another U.S. state.
A captive insurer (C) insures its parent company, and a reciprocal exchange (D) is a mutual insurance structure, neither based on location.
The Virginia study guide defines an alien insurer as one incorporated outside the U.S., operating under state licensing, per standard insurance terminology.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Company Types."
Question #117
Which one of the following statements about an adjustable life insurance policy is true?
- A . An increase in premium decreases future cash values
- B . Simultaneous changes in face amount and in premium are within its capabilities
- C . An increase in face amount lengthens the protection period when the policy provides term coverage
- D . An increase in face amount shortens the premium payment period when the policy provides whole life coverage
Correct Answer: B
B
Explanation:
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.
B
Explanation:
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.
Question #118
When the employer pays the premium, covered individuals normally receive tax-free benefits under all of the following group health plans EXCEPT:
- A . Disability income
- B . Major medical
- C . Dental
- D . Health maintenance organization
Correct Answer: A
A
Explanation:
Detailed Answer in Step-by-Step Solution:
Employer-paid premiums for group health plans like major medical (B), dental (C), and HMOs (D) result in tax-free benefits under IRC Section 106.
Disability income (A) benefits are taxable if the employer pays the premium, per IRS rules, unlike medical benefits.
The Virginia study guide, aligned with IRS regulations, notes that employer-funded disability income benefits are taxable to the recipient, while medical, dental, and HMO benefits remain tax-free.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Taxation of Insurance Benefits."
A
Explanation:
Detailed Answer in Step-by-Step Solution:
Employer-paid premiums for group health plans like major medical (B), dental (C), and HMOs (D) result in tax-free benefits under IRC Section 106.
Disability income (A) benefits are taxable if the employer pays the premium, per IRS rules, unlike medical benefits.
The Virginia study guide, aligned with IRS regulations, notes that employer-funded disability income benefits are taxable to the recipient, while medical, dental, and HMO benefits remain tax-free.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Taxation of Insurance Benefits."
Question #119
What is a condition for which medical advice or treatment was recommended by or received from a provider of health care service within six months preceding the effective date of an individual long-term care policy?
- A . Covered illness
- B . Pre-existing condition
- C . Long-term care condition
- D . Pre-determined risk
Correct Answer: B
B
Explanation:
Virginia Code § 38.2-5205 mandates that long-term care (LTC) policies define pre-existing conditions, typically as conditions for which medical advice or treatment was recommended or received within six months before the policy’s effective date.
Option B (pre-existing condition) matches this definition exactly, as it identifies prior health issues that may affect coverage (e.g., exclusions or waiting periods).
Option A (covered illness) is vague and implies a condition already insured, not necessarily pre-existing.
Option C (long-term care condition) isn’t a standard term; LTC policies cover specific needs (e.g., ADLs), not a category tied to this timeframe.
Option D (pre-determined risk) suggests underwriting factors, not a specific medical history definition. The study guide likely details this six-month lookback as a common LTC standard, with examples like a recent stroke diagnosis, emphasizing disclosure requirements and potential coverage limits, confirming B as the answer.
B
Explanation:
Virginia Code § 38.2-5205 mandates that long-term care (LTC) policies define pre-existing conditions, typically as conditions for which medical advice or treatment was recommended or received within six months before the policy’s effective date.
Option B (pre-existing condition) matches this definition exactly, as it identifies prior health issues that may affect coverage (e.g., exclusions or waiting periods).
Option A (covered illness) is vague and implies a condition already insured, not necessarily pre-existing.
Option C (long-term care condition) isn’t a standard term; LTC policies cover specific needs (e.g., ADLs), not a category tied to this timeframe.
Option D (pre-determined risk) suggests underwriting factors, not a specific medical history definition. The study guide likely details this six-month lookback as a common LTC standard, with examples like a recent stroke diagnosis, emphasizing disclosure requirements and potential coverage limits, confirming B as the answer.
Question #120
Which of the following is required to hold an appointment with the insurance company it represents?
- A . An insured
- B . An employee of the insurer
- C . A consultant
- D . An agent
Correct Answer: D
D
Explanation:
Virginia Code § 38.2-1833 defines an “appointment” as a formal authorization by an insurer for a licensed agent to act on its behalf in transacting insurance. An insured (option A) is the policyholder or beneficiary and has no role in representing the insurer. An employee of the insurer (option B) may work internally but isn’t automatically appointed to sell insurance unless they hold an agent’s license and an appointment, which isn’t implied here. A consultant (option C), under Virginia Code § 38.2-1837, advises on insurance but doesn’t transact it unless also licensed and appointed as an agent, making this a less direct fit. Only an agent (option D), licensed under Virginia Code § 38.2-1819 and appointed per § 38.2-1833, is required to hold an appointment to represent an insurer. The study guide emphasizes that appointments link licensed agents to specific insurers, solidifying D as the correct choice.
D
Explanation:
Virginia Code § 38.2-1833 defines an “appointment” as a formal authorization by an insurer for a licensed agent to act on its behalf in transacting insurance. An insured (option A) is the policyholder or beneficiary and has no role in representing the insurer. An employee of the insurer (option B) may work internally but isn’t automatically appointed to sell insurance unless they hold an agent’s license and an appointment, which isn’t implied here. A consultant (option C), under Virginia Code § 38.2-1837, advises on insurance but doesn’t transact it unless also licensed and appointed as an agent, making this a less direct fit. Only an agent (option D), licensed under Virginia Code § 38.2-1819 and appointed per § 38.2-1833, is required to hold an appointment to represent an insurer. The study guide emphasizes that appointments link licensed agents to specific insurers, solidifying D as the correct choice.