Free Insurance Licensing Virginia-Life-Annuities-and-Health-Insurance Practice Exam with Questions & Answers | Set: 5

Pre-existing conditions are defined as illnesses or conditions for which an insured received medical advice, diagnosis, or treatment prior to the effective date of coverage.

Exact Extract (Virginia Health Insurance Study Guide): “Pre-existing condition—any condition for which diagnosis, medical advice, or treatment was received prior to the policy’s effective date.”

References (Virginia Documents / Study Guide):

— Virginia Health Insurance Examination Outline, Policy Exclusions and Limitations

Medicare Part A is generally available at age 65, but younger individuals may qualify if they have received Social Security disability benefits for at least 24 months.

Exact Extract (Virginia Medicare Study Guide): “Individuals under age 65 become eligible for Medicare Part A after receiving Social Security disability benefits for 24 months.”

References (Virginia Documents / Study Guide):

— Virginia Health Insurance Examination Outline, Medicare Eligibility

The free-look provision ensures policyholders may review their contract and, if dissatisfied, return it for a full refund. Exact extract: “The insured may return the policy within 10 days of delivery for a full refund of all premiums.”

Agents may collect premiums but cannot personally cash or deposit checks as if they were funds of their own. Exact extract: “Agents must forward funds promptly to insurers and may not treat premiums as personal assets.”

Virginia small-group medical insurance disclosure rules require insurers to inform policyholders of renewability provisions, available benefits, and rights related to premium rate increases. However, insurers are not required to disclose their business operating expenses. Exact extract: “At the request of the policyholder, the insurer shall disclose the insurer’s right to increase premium rates, the renewability provisions, and all available benefits.”

Only distributions from qualified employer-sponsored retirement plans (like 401(k)s or pensions) are eligible for rollover into an IRA. Personal savings, lottery winnings, or insurance death benefits do not qualify. Exact extract: “Eligible rollover distributions from qualified plans may be directly transferred or rolled over into an IRA within 60 days to preserve tax-deferred status.” This ensures retirement funds remain tax-deferred until later withdrawal.

Virginia law requires agents to promptly notify the Bureau of Insurance if they discontinue the use of an assumed name or trade name under which they were licensed.

Exact Extract (Virginia Producer Regulations): “An agent who conducts business under an assumed or fictitious name shall notify the Bureau of Insurance when such name is no longer used.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-1822 (Use of assumed or fictitious names)

Detailed Answer in Step-by-Step Solution:

Group health underwriting considers average age (A), claims history (B), and occupation type (D) to assess risk, but marital status (C) is typically irrelevant for group policies, unlike individual underwriting.

The Virginia study guide notes that group underwriting focuses on collective risk factors like age, claims experience, and occupation, not personal details like marital status. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Group Insurance Underwriting."

Virginia Code § 38.2-5207 and 14VAC5-200-185 outline marketing standards for long-term care (LTC) insurance to protect consumers. Option A (twisting)—misrepresenting a policy to induce replacement—is prohibited as an unfair practice (Virginia Code § 38.2-502). Option C (high pressure tactics)—aggressive sales forcing quick decisions—violates ethical standards and is banned (14VAC5-200-40). Option B (replacing existing coverage) is incorrect as stated; replacement itself isn’t prohibited but requires disclosure via a replacement notice (14VAC5-200-75), making it regulated, not banned outright—however, the question implies unauthorized or deceptive replacement, which is prohibited. Option D (cold lead advertising)—soliciting via broad, unsolicited leads (e.g., mailers)—is permitted if it complies with disclosure rules and isn’t deceptive (14VAC5-200-50). The study guide likely lists twisting and high pressure as unethical, with examples like misstating benefits, while allowing cold lead ads with proper labeling (e.g., “advertisement”), making D the exception.

The waiver of premium rider allows the insured to stop paying premiums while disabled. After a specified waiting period (typically 90 days), premiums are waived for as long as the disability continues.

Exact Extract (Virginia Disability Study Guide): “Waiver of premium—after a period of total disability, future premiums are waived while benefits remain payable.”

References (Virginia Documents / Study Guide):

— Virginia Health Insurance Examination Outline, Disability Riders