Virginia Insurance Virginia-Life-Annuities-and-Health-Insurance Based on Real Exam Environment

Virginia Code § 38.2-503 prohibits unfair or deceptive advertising in insurance, including Accident and Sickness policies. Terms like “reductions” (option A), “exclusions” (option B), and “pre-existing conditions” (option C) are factual policy features that must be disclosed clearly under Virginia Administrative Code 14VAC5-41-10 et seq., ensuring transparency. However, “unlimited benefits” (option D) is misleading if untrue, as all policies have limits (e.g., maximum benefits or coverage caps). Advertising “unlimited benefits” without substantiation violates Virginia’s rules against exaggerated or false claims, risking consumer deception. The study guide likely warns against such terms, citing examples where insurers faced penalties for overstating coverage, making D the prohibited choice.

Virginia Code § 38.2-3445, aligned with ACA rules, allows group health plans to impose a probationary period (option C)—also called a waiting period—before new employees become eligible for coverage, capped at 90 days. This delay, set by the employer, ensures employment stability before benefits begin. Option A (participation period) isn’t a standard term; it might confuse with minimum participation rules for group plans. Option B (grace period) is the post-due-date window for premium payment (e.g., 31 days), not eligibility. Option D (contributory period) implies employee premium contributions but isn’t a defined phase. The study guide likely explains this as an employer tool, with examples like a 30-day wait, making C the precise term.

Detailed Answer in Step-by-Step Solution:

In a deferred annuity, the owner (who purchases the contract) can be the annuitant (who receives payments), the beneficiary (who receives proceeds), or a third party (C).

Option A (group contract) applies to group annuities, not individual ownership.

Option B (non-transferable) is false; ownership can often be assigned.

Option D (rights at payment phase) is incorrect; owners have rights during accumulation.

The Virginia study guide notes that deferred annuity ownership is flexible, allowing the owner to differ from the annuitant or beneficiary, with rights exercisable before payout. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Annuities."

Insurers may evaluate actuarial risk factors such as age, health, weight, and occupation. Religion is never a permissible underwriting factor. Exact extract: “Underwriting practices may not discriminate based on race, color, creed, or religion.” This ensures compliance with fairness standards and anti-discrimination laws.