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

Virginia Code § 38.2-3106 governs life insurance delivery, where insurers may require a statement of good health (option B) at policy issuance to confirm no material health changes occurred since the application (e.g., a new cancer diagnosis). This signed document protects the insurer from undisclosed risks between underwriting and delivery, potentially voiding coverage if false (subject to incontestability, § 38.2-3105). Option A (disclosure notice) relates to privacy or policy terms, not health updates. Option C (conditional receipt) is issued at application with premium payment, providing temporary coverage, not a delivery requirement. Option D (notice of information practices) informs about data use (per § 38.2-604), not health status. The study guide likely illustrates this with a scenario—e.g., an insured signing to confirm no heart attack post-application—making B the standard practice.

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.

The grace period provision allows a policyholder a specified time (usually 31 days) after the due date to pay overdue premiums while coverage continues. If the insured dies during this period, the premium due is deducted from the policy proceeds.

Exact Extract (Virginia Policy Provisions Requirement): “Life insurance policies shall provide a grace period of not less than 31 days for the payment of premiums, during which the policy shall continue in force.”

References (Virginia Documents / Study Guide):

— Code of Virginia §38.2-3107 (Grace period in life insurance policies)

Virginia Code § 38.2-3432.1, aligned with the Affordable Care Act (ACA), mandates guaranteed renewability for small employer health plans (1-50 employees in Virginia). Insurers can deny renewal for nonpayment of premiums (option A), insufficient participants (option B, e.g., falling below one eligible employee), or fraud (option D), per Virginia Code § 38.2-3407. However, option C—overuse of services (high claims)—a—is not a permissible reason for denial, as renewability cannot be based on claims experience or health status. The study guide emphasizes this protection under Virginia’s small group market rules, making C the exception.