Important Virginia Insurance Virginia Life, Annuities, and Health Insurance Examination Series 1101 Exam Questions

Answer: D

Explanation:

When determining the amount of life insurance needed, insurers and agents focus on factors affecting survivors, not the insured. The number and ages of dependents, as well as the family's standard of living, directly influence how much income replacement and financial support will be needed after death.

Self-maintenance costs refer to expenses incurred by the insured while alive and do not affect survivor needs after death. Therefore, option D is the correct exception. Virginia exam materials stress survivor income needs, education costs, debts, and lifestyle preservation when evaluating death benefit amounts.

Answer: D

Explanation:

In a noncontributory group life insurance plan, the employer pays the entire premium. Because employees are not required to contribute, Virginia group insurance standards require 100% participation of eligible employees to prevent adverse selection.

Lower participation thresholds apply only to contributory plans, where employees share premium costs. Therefore, option D correctly reflects the participation requirement for noncontributory group life insurance.

Answer: B

Explanation:

Insurance works on the law of large numbers, which states that as the number of exposure units increases, the predictability of losses increases---not that the number of losses decreases. Losses still occur, but they become more statistically predictable.

Exact Extract (Virginia Insurance Fundamentals Study Guide): ''Law of large numbers---predictability of loss increases as the number of similar exposure units increases. The number of losses does not decrease.''

Reference (Virginia Documents / Study Guide):

--- Virginia General Insurance Concepts, Risk and Principles of Insurance

Answer: C

Explanation:

When all named beneficiaries predecease the insured, the policy proceeds revert to the insured's estate. This allows settlement under probate unless otherwise directed by policy terms.

Exact Extract (Virginia Life Insurance Study Guide): ''If no living beneficiary is designated at the time of the insured's death, proceeds are payable to the estate of the insured.''

Reference (Virginia Documents / Study Guide):

--- Virginia Life Insurance Examination Outline, Beneficiary Succession

Answer: D

Explanation:

Automatic premium loans use policy cash value to keep coverage in force, and interest is charged on the borrowed amount. Exact extract: ''The automatic premium loan uses policy values to pay overdue premiums; interest is charged on the loan balance.''