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 #61
Preferred provider organizations (PPOs) encourage patients to use specified hospitals by:
- A . Making public service announcements
- B . Offering outpatient diagnostic coverage
- C . Extending days of hospitalization coverage
- D . Offering greater coinsurance percentages
Correct Answer: D
D
Explanation:
Detailed Answer in Step-by-Step Solution:
PPOs incentivize use of in-network providers (e.g., specified hospitals) by offering higher coinsurance percentages (D), meaning the insurer pays a larger share of costs (e.g., 80% vs. 60% out-of-network).
Option A (announcements) is not a direct incentive.
Option B (diagnostic coverage) applies broadly, not specifically to in-network use.
Option C (extending hospital days) is not a typical PPO feature.
The Virginia study guide notes that PPOs encourage in-network use through financial incentives like higher coinsurance or lower out-of-pocket costs, distinguishing them from HMOs.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Managed Care Plans."
D
Explanation:
Detailed Answer in Step-by-Step Solution:
PPOs incentivize use of in-network providers (e.g., specified hospitals) by offering higher coinsurance percentages (D), meaning the insurer pays a larger share of costs (e.g., 80% vs. 60% out-of-network).
Option A (announcements) is not a direct incentive.
Option B (diagnostic coverage) applies broadly, not specifically to in-network use.
Option C (extending hospital days) is not a typical PPO feature.
The Virginia study guide notes that PPOs encourage in-network use through financial incentives like higher coinsurance or lower out-of-pocket costs, distinguishing them from HMOs.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Managed Care Plans."
Question #62
A group health insurance contract is between the:
- A . Employer and employees
- B . Employee and insurance company
- C . Employer and insurance company
- D . Employer, employees, and insurance company
Correct Answer: C
C
Explanation:
Detailed Answer in Step-by-Step Solution:
A group health insurance contract is a legal agreement between the employer (policyholder) and the insurance company (C), with employees as covered participants, not direct parties to the contract.
Option A (employer and employees) is the employment relationship, not the insurance contract.
Option B (employee and insurer) applies to individual policies.
Option D (all three) overcomplicates the contractual relationship.
The Virginia study guide states that group insurance contracts are issued to the employer or group sponsor, who contracts with the insurer, while employees receive certificates of coverage.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Group Insurance."
C
Explanation:
Detailed Answer in Step-by-Step Solution:
A group health insurance contract is a legal agreement between the employer (policyholder) and the insurance company (C), with employees as covered participants, not direct parties to the contract.
Option A (employer and employees) is the employment relationship, not the insurance contract.
Option B (employee and insurer) applies to individual policies.
Option D (all three) overcomplicates the contractual relationship.
The Virginia study guide states that group insurance contracts are issued to the employer or group sponsor, who contracts with the insurer, while employees receive certificates of coverage.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Group Insurance."
Question #63
The unwritten authority of an agent to perform incidental acts necessary to fulfill the purpose of the agency agreement is:
- A . Implied authority
- B . Mandated authority
- C . Express authority
- D . Nonexistent
Correct Answer: A
A
Explanation:
The concept of agency authority is foundational in Virginia insurance law, derived from general agency principles and reflected in Title 38.2, Chapter 18. Express authority is explicitly granted in the agency agreement (e.g., soliciting and binding coverage), per Virginia Code § 38.2-1800 et seq. Implied authority, however, is not written but assumed to be necessary for carrying out express duties―such as scheduling client meetings or collecting initial premiums―unless restricted by the insurer. “Mandated authority” (option B) is not a recognized term in Virginia insurance regulations or study materials.
Option C (express authority) is incorrect because it’s explicitly stated, not unwritten.
Option D (nonexistent) denies the presence of authority, which contradicts the question’s premise. The Virginia Life, Annuities, and Health Insurance study guide likely highlights implied authority as a key concept for agents’ day-to-day operations, making A the correct answer.
A
Explanation:
The concept of agency authority is foundational in Virginia insurance law, derived from general agency principles and reflected in Title 38.2, Chapter 18. Express authority is explicitly granted in the agency agreement (e.g., soliciting and binding coverage), per Virginia Code § 38.2-1800 et seq. Implied authority, however, is not written but assumed to be necessary for carrying out express duties―such as scheduling client meetings or collecting initial premiums―unless restricted by the insurer. “Mandated authority” (option B) is not a recognized term in Virginia insurance regulations or study materials.
Option C (express authority) is incorrect because it’s explicitly stated, not unwritten.
Option D (nonexistent) denies the presence of authority, which contradicts the question’s premise. The Virginia Life, Annuities, and Health Insurance study guide likely highlights implied authority as a key concept for agents’ day-to-day operations, making A the correct answer.
Question #64
If an insurer pays an individual health insurance claim during a policy’s grace period:
- A . The deductible is waived
- B . A 10% service fee is charged
- C . The policy is canceled automatically at the end of the grace period
- D . The amount of unpaid premium may be subtracted from the reimbursement
Correct Answer: D
D
Explanation:
Virginia Code § 38.2-3508 provides a 31-day grace period for individual health insurance premium payments, during which coverage remains active and claims are paid. If a claim arises, the insurer may deduct any unpaid premium from the reimbursement (option D), ensuring it recovers owed funds while honoring the claim. Option).
Option A (deductible waived) is false; deductibles apply regardless of payment status.
Option B (10% fee) is unsupported by Virginia law.
Option C (automatic cancellation) is incorrect; cancellation requires notice post-grace period if unpaid (Virginia Code § 38.2-3510). The study guide likely explains this with examples―e.g., a $500 claim with a $100 unpaid premium nets $400―reflecting standard practice, making D the correct outcome.
D
Explanation:
Virginia Code § 38.2-3508 provides a 31-day grace period for individual health insurance premium payments, during which coverage remains active and claims are paid. If a claim arises, the insurer may deduct any unpaid premium from the reimbursement (option D), ensuring it recovers owed funds while honoring the claim. Option).
Option A (deductible waived) is false; deductibles apply regardless of payment status.
Option B (10% fee) is unsupported by Virginia law.
Option C (automatic cancellation) is incorrect; cancellation requires notice post-grace period if unpaid (Virginia Code § 38.2-3510). The study guide likely explains this with examples―e.g., a $500 claim with a $100 unpaid premium nets $400―reflecting standard practice, making D the correct outcome.
Question #65
All of the following are elements of an insurable risk EXCEPT:
- A . Speculative risk
- B . Accidental loss
- C . A large number of similar units
- D . An ability to measure the loss
Correct Answer: A
A
Explanation:
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."
A
Explanation:
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."
Question #66
Which of the following statements is true regarding an insurance agent’s license?
- A . The license fee is paid to the insurance company.
- B . It authorizes the agent to transact insurance until otherwise terminated, suspended, or revoked.
- C . It must be renewed annually.
- D . A separate license must be issued for each insurer the agent represents.
Correct Answer: B
B
Explanation:
In Virginia, an insurance agent’s license is governed by the State Corporation Commission’s Bureau of Insurance under Title 38.2 of the Virginia Code. According to Virginia Code § 38.2-1819, once issued, the license authorizes the agent to transact insurance business on behalf of appointed insurers until it is terminated, suspended, or revoked by the Bureau. The license fee is paid to the Bureau of Insurance, not the insurance company (Virginia Code § 38.2-1818), making option A incorrect. Virginia Code § 38.2-1822 specifies that licenses are renewed biennially (every two years), not annually, rendering option C false. Finally, Virginia Code § 38.2-1833 clarifies that an agent needs only one license but must secure an appointment for each insurer they represent, not a separate license per insurer, making option D incorrect.
Option B is the only statement consistent with Virginia law, reflecting the license’s ongoing authority unless altered by regulatory action.
B
Explanation:
In Virginia, an insurance agent’s license is governed by the State Corporation Commission’s Bureau of Insurance under Title 38.2 of the Virginia Code. According to Virginia Code § 38.2-1819, once issued, the license authorizes the agent to transact insurance business on behalf of appointed insurers until it is terminated, suspended, or revoked by the Bureau. The license fee is paid to the Bureau of Insurance, not the insurance company (Virginia Code § 38.2-1818), making option A incorrect. Virginia Code § 38.2-1822 specifies that licenses are renewed biennially (every two years), not annually, rendering option C false. Finally, Virginia Code § 38.2-1833 clarifies that an agent needs only one license but must secure an appointment for each insurer they represent, not a separate license per insurer, making option D incorrect.
Option B is the only statement consistent with Virginia law, reflecting the license’s ongoing authority unless altered by regulatory action.
Question #67
A function performed by both the life insurance agent and the home office underwriter is:
- A . Finding new clients
- B . Evaluating risks
- C . Collecting premiums
- D . Reviewing a client’s coverage periodically
Correct Answer: B
B
Explanation:
Virginia Code § 38.2-1800 et seq. outlines roles in life insurance. Agents and underwriters both evaluate risks (option B): agents assess initial client risk (e.g., health questions) for application accuracy, while underwriters analyze it for approval (e.g., medical records).
Option A (finding clients) is agent-only; underwriters don’t prospect.
Option C (collecting premiums) is primarily the agent’s task, not underwriting’s.
Option D (reviewing coverage) is a post-sale service, not a core underwriting function. The study guide likely contrasts roles but notes this shared risk focus―e.g., an agent flags smoking, underwriter rates it―making B the common duty.
B
Explanation:
Virginia Code § 38.2-1800 et seq. outlines roles in life insurance. Agents and underwriters both evaluate risks (option B): agents assess initial client risk (e.g., health questions) for application accuracy, while underwriters analyze it for approval (e.g., medical records).
Option A (finding clients) is agent-only; underwriters don’t prospect.
Option C (collecting premiums) is primarily the agent’s task, not underwriting’s.
Option D (reviewing coverage) is a post-sale service, not a core underwriting function. The study guide likely contrasts roles but notes this shared risk focus―e.g., an agent flags smoking, underwriter rates it―making B the common duty.
Question #68
When may a person insured under a group term insurance policy exercise the conversion option?
- A . Never, because group life insurance does not have a conversion privilege
- B . Anytime while insurable and still a member of the insured group
- C . Within 31 days after the person has terminated employment
- D . Anytime after the group contract has existed for five years
Correct Answer: C
C
Explanation:
Virginia Code § 38.2-3330 mandates a conversion privilege in group term life policies, allowing insureds to convert to an individual policy without evidence of insurability within 31 days after losing group eligibility (e. g., employment termination).
Option C matches this precisely.
Option A is false; conversion is a legal requirement.
Option B is incorrect; conversion applies post-eligibility, not during active membership while still insurable.
Option D (five years) is arbitrary and unsupported by law. The study guide likely details this 31-day window with examples―e.g., an employee converting to whole life after layoffs―emphasizing its protective role, making C the correct timing.
C
Explanation:
Virginia Code § 38.2-3330 mandates a conversion privilege in group term life policies, allowing insureds to convert to an individual policy without evidence of insurability within 31 days after losing group eligibility (e. g., employment termination).
Option C matches this precisely.
Option A is false; conversion is a legal requirement.
Option B is incorrect; conversion applies post-eligibility, not during active membership while still insurable.
Option D (five years) is arbitrary and unsupported by law. The study guide likely details this 31-day window with examples―e.g., an employee converting to whole life after layoffs―emphasizing its protective role, making C the correct timing.
Question #69
Anything of value given to produce a contract is the definition of:
- A . A grant
- B . A codicil
- C . A consideration
- D . A covenant
Correct Answer: C
C
Explanation:
In insurance contract law, per Virginia Code § 38.2-102, a contract requires consideration―something of value exchanged to make it legally binding.
Option C (consideration) fits this definition: the insured’s premium payment and the insurer’s promise of coverage form the mutual value.
Option A (grant) implies a unilateral transfer, not a contract element.
Option B (codicil) is a will amendment, irrelevant to insurance contracts.
Option D (covenant) is a promise within a contract, not the value exchanged. The study guide likely explains consideration as a foundational principle, using examples like a $500 premium for a $100,000 policy, distinguishing it from other legal terms. Virginia follows common law requiring consideration for enforceability, making C theprecise answer.
C
Explanation:
In insurance contract law, per Virginia Code § 38.2-102, a contract requires consideration―something of value exchanged to make it legally binding.
Option C (consideration) fits this definition: the insured’s premium payment and the insurer’s promise of coverage form the mutual value.
Option A (grant) implies a unilateral transfer, not a contract element.
Option B (codicil) is a will amendment, irrelevant to insurance contracts.
Option D (covenant) is a promise within a contract, not the value exchanged. The study guide likely explains consideration as a foundational principle, using examples like a $500 premium for a $100,000 policy, distinguishing it from other legal terms. Virginia follows common law requiring consideration for enforceability, making C theprecise answer.
Question #70
Which of the following is an advantage of term life insurance?
- A . The cost is about the same as whole life insurance
- B . It will be cost-effective in the long term if it is maintained to age 65 and beyond
- C . It provides insurance protection on a permanent basis
- D . The initial premium is lower than for an equivalent amount of whole life insurance
Correct Answer: D
D
Explanation:
Detailed Answer in Step-by-Step Solution:
Term life insurance’s primary advantage is its lower initial premium (D) compared to whole life for the same death benefit, due to its temporary nature and lack of cash value.
Option A (same cost) is false; term is cheaper.
Option B (cost-effective long-term) is incorrect; premiums rise with renewals.
Option C (permanent) applies to whole life, not term.
The Virginia study guide highlights that term life insurance offers affordable initial premiums for temporary coverage, making it attractive for short-term needs compared to whole life.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Types of Life Insurance."
D
Explanation:
Detailed Answer in Step-by-Step Solution:
Term life insurance’s primary advantage is its lower initial premium (D) compared to whole life for the same death benefit, due to its temporary nature and lack of cash value.
Option A (same cost) is false; term is cheaper.
Option B (cost-effective long-term) is incorrect; premiums rise with renewals.
Option C (permanent) applies to whole life, not term.
The Virginia study guide highlights that term life insurance offers affordable initial premiums for temporary coverage, making it attractive for short-term needs compared to whole life.
Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Types of Life Insurance."