Insurance Licensing Virginia-Life-Annuities-and-Health-Insurance - Virginia Life, Annuities, and Health Insurance Examination Series 11-01

Under the Affordable Care Act (ACA), Essential Health Benefits (EHB) include a variety of categories such as hospitalization, laboratory services, and preventive care services. However, adult dental services are not included as one of the ACA's required essential benefits, though they may be offered as part of a separate plan or rider. This distinction is important as it affects coverage requirements and benefits for different age groups.

Straight whole life insurance provides permanent protection until death or policy maturity (typically age 100 or 120). It does not end at age 65.

Exact Extract (Virginia Life Insurance Study Guide): “Straight whole life insurance—permanent protection, level premiums payable for life, with guaranteed cash values, nonforfeiture options, and face amount payable at maturity.”

References (Virginia Documents / Study Guide):

— Virginia Life & Annuities Insurance Examination Outline, Whole Life Insurance

Rebating is an unfair trade practice where an agent offers a portion of their commission or any other inducement to encourage the insured to purchase a policy. This is considered illegal because it could mislead the buyer into making a purchase based on incentives rather than the suitability of the policy for their needs.

Home health care insurance covers long-term physical therapy or nursing services provided at the insured's residence. This type of insurance helps pay for the costs associated with receiving medical care in the home, such as nursing services, physical therapy, or assistance with activities of daily living. Nursing home insurance, on the other hand, covers care provided in a facility, not at home.

Detailed Answer in Step-by-Step Solution:

A foreign insurer (A) is an insurance company operating in a state other than its state of domicile (where it is incorporated).

A domestic insurer (B) operates in its home state. An alien insurer (C) is domiciled outside the U.S. A captive insurer (D) insures its parent company, not based on location.

The Virginia study guide defines a foreign insurer as one licensed to do business in Virginia but incorporated in another state, per insurance regulatory terminology. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Company Types."

Whole life insurance provides permanent coverage, builds guaranteed cash value, and allows for policy loans. However, it has a higher initial premium cost compared to term life insurance. Therefore, the statement that whole life has lower initial costs is incorrect.

Exact Extract (Virginia Life Insurance Study Guide): “Whole life insurance provides long-term protection, guaranteed cash values, and policy loans. Premiums are higher than term insurance for equivalent coverage.”

References (Virginia Documents / Study Guide):

— Virginia Life & Annuities Insurance Examination Outline, Whole Life Characteristics

Detailed Answer in Step-by-Step Solution:

The policyowner (A) has the right to designate the beneficiary, as they control the policy’s terms and ownership rights.

The insurer (B) issues the policy, the beneficiary (C) receives proceeds, and the agent (D) facilitates but doesn’t decide.

The Virginia study guide confirms that the policyowner selects the beneficiary, exercising a fundamental ownership right, unless assigned otherwise. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Beneficiary Designations."

Virginia Code § 38.2-5208 allows LTC policy cancellation by the insurer for nonpayment of premium (option A) after a 31-day grace period and notice, a standard contract right. Option B (Medicaid eligibility) isn’t a cancellation cause; it may coordinate benefits, not terminate coverage. Option C (insurer insolvency) affects payment ability, not lawful cancellation grounds. Option D (nuisance claims) isn’t a legal basis; claims frequency doesn’t void coverage unless fraudulent (Virginia Code § 38.2-309). The study guide likely lists nonpayment as the primary insurer-initiated cancellation reason, with examples like missed payments triggering notice, making A the lawful cause.

With a decreasing term life insurance policy, the premium remains level, but the amount of coverage decreases annually. This type of policy is often used to cover debts that decrease over time, such as a mortgage. Since the coverage amount drops each year, premiums are not reduced — they remain the same throughout the policy term.