Virginia Insurance Virginia Life Annuities and Health Insurance Practice Exams
Last updated on Oct 21,2026- 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 21,2026
Question #21
An insurance contract that identifies individuals by relationship to a particular organization is called:
- A . Contributory insurance
- B . Group insurance
- C . Health insurance
- D . COBRA coverage
Correct Answer: B
B
Explanation:
Detailed Answer in Step-by-Step Solution:
Group insurance (B) covers individuals based on their affiliation with an organization (e.g., employees of a company), not as individuals.
Contributory insurance (A) refers to group plans where employees pay part of the premium, but it’s not the defining feature.
Health insurance (C) is too broad, and COBRA (D) extends group coverage, not defines it.
The Virginia study guide defines group insurance as coverage tied to membership in an organization, such as an employer or association.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Group Insurance."
B
Explanation:
Detailed Answer in Step-by-Step Solution:
Group insurance (B) covers individuals based on their affiliation with an organization (e.g., employees of a company), not as individuals.
Contributory insurance (A) refers to group plans where employees pay part of the premium, but it’s not the defining feature.
Health insurance (C) is too broad, and COBRA (D) extends group coverage, not defines it.
The Virginia study guide defines group insurance as coverage tied to membership in an organization, such as an employer or association.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Group Insurance."
Question #22
An insured died six months after a life insurance policy was issued. The full death benefit will NOT be paid if the cause of death was:
- A . Accidental injury
- B . Lung cancer
- C . Suicide
- D . Heart attack
Correct Answer: C
C
Explanation:
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."
C
Explanation:
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."
Question #23
When a small employer health insurance plan is offered, it must be available:
- A . To all eligible employees who apply
- B . To all eligible employees after a 12-month waiting period
- C . Only to employees who provide evidence of insurability
- D . Only to employees under age 65
Correct Answer: A
A
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 of insurability) 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.
A
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 of insurability) 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.
Question #24
The designation of a beneficiary by class in a life insurance policy means that:
- A . The policy must be a form of business life insurance
- B . A primary beneficiary cannot be designated in the policy
- C . Individual beneficiaries are not specified by name
- D . The beneficiaries are unrelated to the insured
Correct Answer: C
C
Explanation:
Detailed Answer in Step-by-Step Solution:
Designating a beneficiary "by class" means identifying a group (e.g., "my children") rather than naming specific individuals (C).
Option A (business life insurance) is unrelated to class designation.
Option B (no primary beneficiary) is incorrect; a class can still be primary.
Option D (unrelated beneficiaries) is not a requirement of class designation.
The Virginia study guide notes that a class designation identifies beneficiaries by a category (e.g., "spouse" or "heirs") rather than specific names, offering flexibility.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Beneficiary Designations."
C
Explanation:
Detailed Answer in Step-by-Step Solution:
Designating a beneficiary "by class" means identifying a group (e.g., "my children") rather than naming specific individuals (C).
Option A (business life insurance) is unrelated to class designation.
Option B (no primary beneficiary) is incorrect; a class can still be primary.
Option D (unrelated beneficiaries) is not a requirement of class designation.
The Virginia study guide notes that a class designation identifies beneficiaries by a category (e.g., "spouse" or "heirs") rather than specific names, offering flexibility.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Beneficiary Designations."
Question #25
Under an absolute assignment, a life insurance policyowner transfers:
- A . Limited policy rights to another party
- B . The requirement to pay premiums to a third party
- C . All policy ownership rights to a new owner
- D . Ownership rights as collateral for a loan
Correct Answer: C
C
Explanation:
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."
C
Explanation:
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."
Question #26
A contractual arrangement that transfers exposure from one insurer to another insurer is a:
- A . Reciprocal contract
- B . Coinsurance contract
- C . Reinsurance contract
- D . Captive contract
Correct Answer: C
C
Explanation:
Detailed Answer in Step-by-Step Solution:
Reinsurance (C) is a process where one insurer (the ceding company) transfers part or all ofits risk to another insurer (the reinsurer) to reduce exposure.
A reciprocal contract (A) involves mutual insurance exchanges, not risk transfer between insurers.
Coinsurance (B) refers to shared risk between the insurer and policyholder, not between insurers.
A captive contract (D) involves a company insuring itself through a subsidiary, not transferring risk to another insurer.
The Virginia study guide defines reinsurance as a contractual arrangement allowing insurers to mitigate risk by transferring it to another insurer, a common practice in the industry.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Company Operations."
C
Explanation:
Detailed Answer in Step-by-Step Solution:
Reinsurance (C) is a process where one insurer (the ceding company) transfers part or all ofits risk to another insurer (the reinsurer) to reduce exposure.
A reciprocal contract (A) involves mutual insurance exchanges, not risk transfer between insurers.
Coinsurance (B) refers to shared risk between the insurer and policyholder, not between insurers.
A captive contract (D) involves a company insuring itself through a subsidiary, not transferring risk to another insurer.
The Virginia study guide defines reinsurance as a contractual arrangement allowing insurers to mitigate risk by transferring it to another insurer, a common practice in the industry.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Company Operations."
Question #27
All of the following are typical health maintenance organization (HMO) preventive care services provided by a primary care physician EXCEPT:
- A . Well-baby checkups
- B . Immunizations for children
- C . Experimental surgery
- D . Physical examinations
Correct Answer: C
C
Explanation:
Virginia Code § 38.2-4306 requires HMOs to offer preventive care, coordinated by primary care physicians (PCPs), focusing on health maintenance.
Option A (well-baby checkups), option B (immunizations for children), and option D (physical examinations) are standard preventive services―e.g., growth monitoring, vaccines, and annual exams―covered at no cost under ACA-aligned plans (Virginia Code § 38.2-3440).
Option C (experimental surgery) is not preventive; it’s a treatment, often excluded or requiring special approval due to its unproven nature, not a PCP’s routine role. The study guide likely lists HMO preventive benefits with examples (e.g., flu shots), contrasting them with non-preventive interventions like surgery, making C the exception.
C
Explanation:
Virginia Code § 38.2-4306 requires HMOs to offer preventive care, coordinated by primary care physicians (PCPs), focusing on health maintenance.
Option A (well-baby checkups), option B (immunizations for children), and option D (physical examinations) are standard preventive services―e.g., growth monitoring, vaccines, and annual exams―covered at no cost under ACA-aligned plans (Virginia Code § 38.2-3440).
Option C (experimental surgery) is not preventive; it’s a treatment, often excluded or requiring special approval due to its unproven nature, not a PCP’s routine role. The study guide likely lists HMO preventive benefits with examples (e.g., flu shots), contrasting them with non-preventive interventions like surgery, making C the exception.
Question #28
Who normally bears the cost of excess charges in a Medicare claim?
- A . The Social Security Administration
- B . The Centers for Medicare & Medicaid Services
- C . The service provider
- D . The insured
Correct Answer: D
D
Explanation:
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."
D
Explanation:
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."
Question #29
After an insured’s death, the insurer learned that the age on the application for a whole life insurance policy was understated by five years. The rate per $1,000 for the applicant’s actual age was $18, and the rate for the understated age was $15.
How much will the insurer pay?
- A . 15/18 of the policy face amount
- B . 95% of the policy face amount
- C . The policy face amount
- D . Nothing at all
Correct Answer: A
A
Explanation:
Detailed Answer in Step-by-Step Solution:
When age is misstated, the insurer adjusts the death benefit based on the premium paid versus what should have been paid.
Premium paid: $15 per $1,000 (understated age). Correct premium: $18 per $1,000 (actual age).
Ratio: $15/$18 = 5/6 of the intended coverage. Thus, the benefit is 15/18 of the face amount (A).
Option B (95%) is arbitrary.
Option C (full amount) ignores the misstatement.
Option D (nothing) applies only in fraud cases beyond the incontestability period, not specified here.
The Virginia study guide states that under the misstatement of age provision, the benefit is adjusted proportionally to the premium paid versus the correct premium, not denied entirely.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Life Insurance Policy Provisions."
A
Explanation:
Detailed Answer in Step-by-Step Solution:
When age is misstated, the insurer adjusts the death benefit based on the premium paid versus what should have been paid.
Premium paid: $15 per $1,000 (understated age). Correct premium: $18 per $1,000 (actual age).
Ratio: $15/$18 = 5/6 of the intended coverage. Thus, the benefit is 15/18 of the face amount (A).
Option B (95%) is arbitrary.
Option C (full amount) ignores the misstatement.
Option D (nothing) applies only in fraud cases beyond the incontestability period, not specified here.
The Virginia study guide states that under the misstatement of age provision, the benefit is adjusted proportionally to the premium paid versus the correct premium, not denied entirely.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Life Insurance Policy Provisions."
Question #30
Keogh plans are also known as:
- A . Section 457 plans
- B . HR 10 plans
- C . 403(b) plans
- D . Section 2503(c) trusts
Correct Answer: B
B
Explanation:
Keogh plans, established under the Internal Revenue Code, are retirement plans for self-employed individuals and small businesses, also known as HR 10 plans (option B) after the 1962 legislation (H.R. 10) creating them. They allow tax-deferred contributions, similar to qualified plans.
Option A (Section 457 plans) applies to government and nonprofit employees, not self-employed individuals.
Option C (403(b) plans) is for nonprofit employees (e.g., teachers), distinct from Keogh’s self-employed focus.
Option D (Section 2503(c) trusts) relates to gifting for minors, not retirement. The study guide likely contrasts Keogh (HR 10) with other plans in a retirement section, noting its tax benefits and eligibility, confirming B as the correct synonym.
B
Explanation:
Keogh plans, established under the Internal Revenue Code, are retirement plans for self-employed individuals and small businesses, also known as HR 10 plans (option B) after the 1962 legislation (H.R. 10) creating them. They allow tax-deferred contributions, similar to qualified plans.
Option A (Section 457 plans) applies to government and nonprofit employees, not self-employed individuals.
Option C (403(b) plans) is for nonprofit employees (e.g., teachers), distinct from Keogh’s self-employed focus.
Option D (Section 2503(c) trusts) relates to gifting for minors, not retirement. The study guide likely contrasts Keogh (HR 10) with other plans in a retirement section, noting its tax benefits and eligibility, confirming B as the correct synonym.