Virginia Life and Health - Final Exam

Respite Care coverage is typically found in a(n)

Long Term Care policy

In Virginia, false advertising is an example of

Misrepresentation

Which of the following provisions allows an insured or the insurer to terminate the policy?

Cancelable provision

According to the Affordable Care Act, coverage may be rescinded

If intentionally false statements were offered

What happens to a life insurance policy when the policy loan balance exceeds the cash value?

Policy will no longer be in force

Which of the following is true regarding a person receiving a waiver of premium benefit?

The insured must be disabled for a period of time

The initial premium for a life insurance policy is typically paid in what way?

It is typically obtained by the producer and forwarded to the insurer

An accident and health insurance policy's premium requirements are set forth in which of the following provisions?

Consideration clause

Which of the following relationships demonstrates insurable interest in the absence of economic interest?

Marriage partners

Health providers are compensated by a preferred provider organization (PPO) for normal dental procedures by what means?

Decreased fee schedules

The Optionally Renewable provision allows what party to cancel the contract?

The insurer

When issuing disability income coverage on a substandard risk, an insurance company may

shorten the benefit period

James is covered with health insurance by two different insurers. The "insurance with other insurers" provision in an individual health insurance policy allows an insurer to pay benefits to the insured on a pro-rata basis when

The insurer was not notified prior to the claim that the insured has other health coverage

Which of the following statements BEST describes a double indemnity provision in travel accident insurance?

Benefits are doubled under certain circumstances stated in the policy

An agent must hold which of the following licenses to sell variable life insurance policies?

Life, variable, and securities license

Which tax cost is normally associated with death?

Federal estate tax

A group health certificate for coverage issued in Virginia MUST contain a(n)

A summary of policy features and benefits

Accident and health insurance claim handling is made more convenient to the insured by utilizing

Assignment of benefits

Which of the following reduces the opportunity for overinsurance?

Coordination of benefits provision

The State Corporation Commission is empowered to perform each of the following acts EXCEPT

prosecute agents who violate state insurance laws

Which statement regarding the waiver of premium rider is accurate?

Cash payment is not directly provided to the policyowner

A policyowner has a life insurance policy where she had listed her age on the application as 5 years younger than her actual age. If she dies and the insurer discovers the misstatement of age, how much will the insurance company pay?

Less than the face amount

T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an irrevocable beneficiary. What action will the insurance company take if T requests a change of beneficiary?

Request of the change will be refused

During the application process, a statement made by an applicant that becomes part of the contract is considered to be a(n)

warranty

An insurable interest in each other's lives may exist in absence of an economic interest when the individuals are

Marriage partners

Which of the following waiting periods would result in the lowest premium for a disability income policy?

180 days

Which type of life insurance policy is best suited for paying off the outstanding balance of a 30-year mortgage in the event of the insured's death?

30-year decreasing term

A life insurance policy can be backdated before the application date for up to ___ month(s).

6

A licensee who must complete continuing education as a requirement for a license renewal must do so every ___ Year(s).

2

According the the affordable care act (ACA), the proportion of premium revenues spent on clinical services and quality improvements is called the

Medical loss ratio

Defamation can be best defined as

Making a statement that is false or maliciously critical of the financial condition of an insurer

What kind of arrangement gives the policyowner the right to change the beneficiary?

Revocable designation

Which of the following is TRUE about a qualified retirement plan that is "top heavy"?

More than 60% of plan assets are in key employee accounts

Which of these procedures is NOT designed for ambulatory care centers?

Inpatient surgery

The pre-existing conditions exclusion under a small employer medical plan

may be partially or fully satisfied by having creditable coverage with a previous employer

Any employee insured under a group life insurance plan is normally

covered with term life insurance

Long-term care insurance policies may contain exclusions for all of the following EXCEPT

Care for incurable conditions

Which life insurance policy would be eligible to include an automatic premium loan provision?

Whole life

An example of misrepresentation is

falsifying the terms, benefits, advantages, or conditions of an insurance policy

The insured's consideration given for a health insurance policy is

the first premium payment and the application

A signed good health statement may be requested by a life producer at the time of

policy delivery

Long-term care policies sold in Virginia may offer coverage in which

benefits are based on a individual's ability to perform activities of daily living

Which of the following statements BEST describes employer contributions for employer provided health insurance?

Employer contributions are deductible

What is considered interstate travel under the Federal Fraud and False Statements Act?

Puerto Rico

Who normally pays the premiums for group credit life insurance?

Borrower

___ is the attempt made by an agent to intimidate or use force.

Coercion

Omar is covered by a disability income policy. He is hurt while performing an occupation more hazardous than the occupation listed in his policy. The policy's change of occupation provision will have what effect?

Reduce the benefit level

An insurance policy may be issued with a preferred insurance premium in all of these situations EXCEPT

living in a rural area

Which of these is NOT a common life insurance nonforfeiture option?

Life income annuity

A single premium deferred annuity sometimes contains a bailout feature. Which statement regarding this feature is correct?

If the interest rate falls below a specified level, the surrender charge is waived

An insured, age 67, is covered under a disability income policy. What will the insurer normally require in order for the insured to continue coverage?

The insured must be actively at work for a specified number of hours per week

The annuitant in a single premium deferred annuity (SPDA)

makes only one premium payment

Which of the co-annuitants listed below would receive the largest monthly benefit payments in a joint and 100% survivor annuity?

Ages 71 and 73

Tim is covered by an accident and health insurance policy that may not be changed in any way by the insurer up to a stated age, as long as the premiums are paid. What type of policy is this?

Noncancelable

When an individual is planning to protect his family with life insurance, one method of doing so is called needs analysis. What exactly does needs analysis involve?

Identifies the needs of an individual and the individual's dependents

The Medical Information Bureau consists of members from which group?

Insurance companies

A health insurer MUST provide a proof of loss form

within 15 days of receipt of the notice of loss

The benefit period of Medicare Part A begins on the first day the insured

enters a hospital

According to the Affordable Care Act (ACA), dependent children may remain on their parent's plan until what age?

Age 26

When testing for the Human Immunodeficiency Virus (HIV), Virginia law requires a consent form

that discloses who may receive a copy of the results

Giving up a known right on a voluntary basis is called a(n)

waiver

Which of the following is considered a Limited accident and health plan?

Cancer plan

Which statement regarding the life insurance premium for a children's rider is true?

Premium remains the same no matter how many children

Medicare Part A does not provide coverage for

the first 3 pints of blood

What is the primary reason for the State Corporation Commission's examination of an agent's insurance records?

To determine compliance with state insurance laws and regulations

Which statement regarding the certificate of insurance is accurate?

It indicates evidence of an employee's insurance coverage

Which of the following statements accurately describes the "time limit on certain defenses"?

After a stated period of time, claims cannot be denied due to material misrepresentation on the application

If an insured dies during the grace period without having paid the premium, how much will the insurer pay?

Policy's face amount minus any premiums due

What is covered under a limited accident and health insurance policy?

Limited perils and amounts

An independent agent may

Represent several insurers

Which of these is NOT an Unfair Claims Settlement Practice?

Offering to settle a claim by arbitration

A life insurance policy that includes a return of premium rider will pay the beneficiary how much upon the insured's death?

Total premiums paid plus the policy face amount

During the sale of a life insurance policy, an agent may provide an incomplete illustration

Never

An agent's insurance records must be provided to the State Corporation Commission

upon request of the State Corporation Commission

What is a Pap test designed to detect?

Cervical cancer

Which of the following does NOT help determine group health insurance premiums?

Income level of group members

The Virginia Life, Accident, and Sickness Insurance Guaranty Association protects an insured in the event of

the insurer's insolvency

James owns a business and purchased a policy that covers the business expense of finding a permanent or temporary employee to replace a disabled one. This type of disability coverage is called

Key employee coverage

When the disclosure of an insured's nonpublic information is involved, what is the insurer obligated to do?

Give notice, explain, and allow opting out

Which of the following is NOT subject to the promise to pay in an insuring clause?

How the premium is calculated

Which of these is NOT considered the responsibility of a producer during the underwriting process?

Selecting the final approval date

Virginia offers an attended COBRA insurance plan for companies with

2-19 employees

Which of these may NOT be deducted from premium payments or the cash value of a variable life insurance policy?

Federal premium taxes

Mary has a Health Savings Account (HSA). Distributions that have been made for anything other than qualified medical expenses are considered taxable and subject to a penalty of

20%

A retirement plan that sets aside part of the company's net income for distributions to qualified employees is called a

profit-sharing plan

Viatical settlement proceeds may be subject to the claims of

creditors

Which of the following has the power to suspend or revoke an agent's license?

State Corporation Commission

Insurance crimes which affect interstate commerce are prosecuted by the

US Attorney General

Which of the following health insurance plans charges a premium that cannot be increased?

Noncancelable

Q is severely injured in an automobile accident and becomes totally disabled. How many months must Q be disabled before being able to apply for Social Security disability benefits?

5

Which would NOT be a location where skilled nursing care is provided?

Personal residence

In Virginia, an insurance agent's appointment

is in effect until termination

A group health insurance policy is a contract between an

Employer and insurance company

Who is the beneficiary in a life insurance policy?

The stated person or entity who is designated to receive the death proceeds

A policy that has premiums that are lower than normal during the early years is called

Modified life

John received a one-time distribution of $50,000 from his modified endowment contract (MEC). Prior to that, the contract's cash value was $150,000, the contract investment amount was $100,000, and the death benefit was $500,000. What percentage of the $50,000 distribution was taxable as ordinary income?

100%

The premiums for a group life credit policy must be paid for by the

creditor

In a speech to a local association, an agent incorrectly stated that XYZ Insurance Company is in financial difficulty and not paying claims. The agent may be guilty of

Defamation

All of these are considered features of whole life insurance EXCEPT

Initial premium is lower than for an equivalent amount of term insurance

Group life plans sold in Virginia typically contain a conversation option. If the insured elects this option, the new policy

does NOT require evidence of insurability