Insurance Licensing Updated Virginia-Life-Annuities-and-Health-Insurance Exam Questions and Answers by matthias

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.

Individual health policies must include a free look period of at least 10 days, giving policyholders the right to return the policy for a full refund if dissatisfied.

Exact Extract (Virginia Insurance Regulations): “Every individual health insurance policy shall include a free-look provision of not less than 10 days.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-3514 (Standard Policy Provisions – Free Look)

Detailed Answer in Step-by-Step Solution:

In a PPO, using a non-PPO provider (out-of-network) leads to higher out-of-pocket expenses (A) due to lower reimbursement rates and potential excess charges.

Option B (full cost) is inaccurate; some coverage applies. Option C (100% reimbursement) is false. Option D (waiting period) is unrelated.

The Virginia study guide reiterates that PPOs cover out-of-network care but at a reduced level, increasing the insured’s costs compared to in-network use. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Managed Care Plans."

The bailout provision (also known as a “market-value adjustment escape clause”) allows the annuity owner to surrender the contract without penalty if the credited interest rate falls below a certain guaranteed minimum. This protects the annuitant from being locked into low rates.

Exact Extract (Virginia Annuities Study Guide): “Bailout provision—permits withdrawal of funds without surrender charges if the credited interest rate drops below a specified level.”

References (Virginia Documents / Study Guide):

— Virginia Life & Annuities Examination Outline, Annuity Contract Features