PDF Virginia-Life-Annuities-and-Health-Insurance Study Guide

The deductible is the initial portion of covered expenses the insured must pay before the insurer pays benefits. Coinsurance applies only after the deductible has been met. Exact extract: “The deductible is the amount of covered expenses an insured must pay out of pocket before the insurer is obligated to pay under the major medical policy.” This provision ensures cost-sharing and discourages excessive claims.

Renewable term insurance renews at the insured’s attained age, not the original issue age. Thus, at renewal after five years, the premium is based on age 40 rates.

Exact Extract (Virginia Life Insurance Study Guide): “Renewable term—premiums increase at renewal based on the insured’s attained age.”

References (Virginia Documents / Study Guide):

— Virginia Life Insurance Examination Outline, Term Insurance Features

The fixed period settlement option in life insurance, per Virginia Code § 38.2-3115, pays the death benefit in equal installments over a set time (e.g., 10 years), determined by the policyowner or beneficiary if not restricted. Option B is true; a longer period spreads the principal and interest over more payments, reducing each installment (e.g., $100,000 over 20 years yields smaller payments than over 5 years). Option C is true; payments blend principal and interest earned on the remaining proceeds held by the insurer. Option D is true; Virginia law allows beneficiaries to choose settlement options unless the policyowner locks in a method (e.g., via a policy endorsement). Option A is false; the payment amount depends on the proceeds, interest rate, and period length—not the beneficiary’s age, which might influence a life income option instead. The study guide likely contrasts fixed period (time-based) with life annuity (age-based) options, using examples like $500 monthly for 10 years, making A the exception.

When underwriting group health, insurers consider the group’s stability, demographics, and industry risk. Persistency (how long the employer has had coverage) is important for business retention but is not directly a health risk factor.

Exact Extract (Virginia Group Insurance Study Guide): “Underwriting group health considers stability, composition, and industry. Persistency of a contract relates to retention, not health risk.”

References (Virginia Documents / Study Guide):

— Virginia Health Insurance Examination Outline, Group Underwriting Factors