Pass the Insurance Licensing Virginia Insurance License Virginia-Life-Annuities-and-Health-Insurance Questions and answers with Dumpstech

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.

If the amount of a policy loan plus accrued interest exceeds the life insurance policy’s cash value, the policy will generally lapse and become no longer in force. This occurs because the insurer cannot lend more than the available cash value, and the outstanding loan would exceed the policy’s value, leading to its termination.

The gatekeeper system requires primary care physician approval for specialist referrals or hospital services, controlling use of services. Exact extract: “The gatekeeper concept requires members to seek primary physician approval for specialized or expensive services, thereby controlling utilization.”

In an HMO, members designate a primary care physician (PCP) who coordinates care and issues referrals to specialists. This gatekeeper function is a hallmark of HMO plans.

Exact Extract (Virginia HMO Study Guide): “HMO members select a primary care physician responsible for providing and coordinating all medical care.”

References (Virginia Documents / Study Guide):

— Virginia Health Insurance Examination Outline, HMO Characteristics

A joint life insurance policy insures two lives under one policy and pays the death benefit at the first insured’s death. After payment, the policy terminates.

This type of policy is commonly used to cover joint financial obligations such as business partnerships or mortgages.

Option B describes survivorship (second-to-die) life insurance, not joint life. Insurable interest is required at policy issue, not at death. Therefore, option A is correct.

HMOs emphasize preventive care to control costs and maintain wellness, including immunizations, checkups, and screenings. Exact extract: “Health Maintenance Organizations emphasize preventive health services as a primary means of controlling health costs.”

A contingent beneficiary is designated to receive the policy proceeds only if the primary beneficiary is unable to do so, usually due to predeceasing the insured.

Exact Extract (Virginia Life Insurance Study Guide): “Contingent beneficiary—receives benefits if the primary beneficiary dies before the insured.”

References (Virginia Documents / Study Guide):

— Virginia Life Insurance Examination Outline, Beneficiary Designations

Detailed Answer in Step-by-Step Solution:

The conversion privilege in term insurance allows conversion to a permanent policy (e.g., whole life) at the insured’s current (attained) age without proving insurability (B), typically before the term expires.

Option A (another term policy) is not standard. Option C (annuity with insurability) is incorrect; conversion is to life insurance. Option D (issue age rates) doesn’t apply; rates adjust to attained age.

The Virginia study guide explains that the conversion privilege ensures continued coverage by allowing term policies to convert to permanent ones without medical exams, based on attained age. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Term Insurance Features."

Flexible premium life insurance, such as universal life (Virginia Code § 38.2-3113.1), allows the policyowner to adjust premium payments within policy limits (e.g., minimum to maintain coverage, maximum for tax advantages), offering flexibility over fixed-premium plans like whole life. Option A correctly identifies the policyowner as the decision-maker. Option B (contingent beneficiary) is false; beneficiaries have no control over premiums. Options C and D tie adjustments to economic indices (CPI, interest rates), but Virginia law and standard policies don’t grant insurers unilateral premium-changing rights based on these factors—flexibility is the policyowner’s prerogative, subject to cash value sufficiency. The study guide likely contrasts this with traditional policies, using examples of skipped or increased payments, confirming A as the defining trait.

Under the conversion option of a group life insurance plan, the insured can convert their coverage to an individual policy without requiring evidence of insurability. This means the individual does not need to prove they are in good health to convert their group coverage to a personal policy. The new policy's premium rate, coverage amount, and duration will vary based on the terms of the conversion option, but no proof of health is required for conversion.