Virginia-Life-Annuities-and-Health-Insurance Dumps with Practice Exam Questions Answers

Detailed Answer in Step-by-Step Solution:

Employer-paid premiums for group health plans like major medical (B), dental (C), and HMOs (D) result in tax-free benefits under IRC Section 106.

Disability income (A) benefits are taxable if the employer pays the premium, per IRS rules, unlike medical benefits.

The Virginia study guide, aligned with IRS regulations, notes that employer-funded disability income benefits are taxable to the recipient, while medical, dental, and HMO benefits remain tax-free. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Taxation of Insurance Benefits."

Health Maintenance Organizations (HMOs) in Virginia, per Virginia Code § 38.2-4306, emphasize preventive care to reduce long-term costs. Preventive services, as defined in the study guide and aligned with ACA standards, include childhood immunizations (option C), such as vaccines for measles or polio, offered at no cost to members. Option A (rehabilitation therapy) is restorative, not preventive, addressing existing conditions. Option B (treatment for alcoholism) is a treatment service, not prevention, though HMOs cover it separately. Option D (home health services) supports recovery or chronic care, not primary prevention. The study guide likely lists immunizations as a core preventive benefit, contrasting them with treatment-oriented services, confirming C as the correct answer.

The incontestability clause in health insurance policies generally provides that after two years from the date of issue, the insurer cannot deny a claim or void coverage due to material misrepresentation in the application, except in cases of fraud. This ensures that policyholders have long-term protection from policy rescission due to innocent mistakes.

Detailed Answer in Step-by-Step Solution:

Agents must notify the Virginia Bureau of Insurance (A) of changes like discontinuing an assumed name, as it regulates licensing and business conduct.

The NAIC (B), Chamber (C), and Surety Organization (D) have no direct authority over this requirement.

The Virginia study guide mandates that agents report significant business changes, including assumed name cessation, to the Bureau of Insurance per state law. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Agent Responsibilities."

Virginia requires life insurance policies to include an incontestability provision stating that, after the policy has been in force during the insured’s lifetime for two years from the date of issue, the insurer cannot contest the policy’s validity (with the key exception of nonpayment of premiums). This is exactly what the question describes: a clause that limits the insurer’s ability to challenge the policy after a defined time period, providing stability and protection to policyowners and beneficiaries.

The other clauses serve different purposes. The entire contract clause identifies what documents make up the contract (typically the policy and attached application), but it does not bar contestability after a time period. Guaranteed renewable and noncancelable are health insurance concepts that address renewal rights and premium stability, not the life policy’s contestability window. The incontestability clause is also closely tied to representations/misrepresentations and underwriting: the insurer has a limited time to investigate and rescind for material misstatements, after which the policy becomes “incontestable” under Virginia statute (again, except for premium nonpayment and certain limited exceptions allowed by law).