Get Virginia Insurance Virginia Life, Annuities, and Health Insurance Examination Series 1101 Exam Practice Questions - Real and Updated

Answer : B

A survivorship life insurance policy, also known as second-to-die life insurance, insures two individuals under a single policy. The death benefit is paid only after both insured individuals have died. This type of policy is most commonly issued to spouses but may also insure business partners or other pairs with shared financial interests. Because the insurer does not pay the benefit until the second death occurs, survivorship policies typically have lower premiums than purchasing two separate permanent life insurance policies with the same combined face amount. Survivorship life insurance is primarily used for estate planning purposes, such as providing funds to pay estate taxes, create liquidity for heirs, or fund trusts. It is not designed to replace income upon the first death. The defining feature of survivorship life insurance is that exactly two lives are insured, and the benefit is triggered by the second death.

Answer : B

In a non-qualified deferred annuity, the owner's cost basis is the total amount of premiums paid into the contract. This figure is used to determine the taxable and non-taxable portions of withdrawals and annuity payments.

Earnings in the annuity grow tax-deferred, and when distributions occur, amounts exceeding the cost basis are taxable as ordinary income. Opportunity cost and cash values are unrelated to tax basis calculations.

Virginia exam standards emphasize understanding cost basis to correctly apply annuity taxation rules, making option B correct.

Answer : C

A 10-year certain annuity guarantees payments for 120 months. If the annuitant dies after receiving 119 payments, only one more payment remains for the beneficiary. Exact extract: ''Life with 10-year certain annuities guarantee at least 120 payments; if the annuitant dies before that period, remaining payments go to the beneficiary.'' After 120 months, no benefits continue.

Answer : B

The needs approach calculates the amount of life insurance a client should have by analyzing family financial obligations---such as income replacement, education costs, debts, and funeral expenses. This approach ensures sufficient coverage to meet survivors' future needs.

Exact Extract (Virginia Life Insurance Study Guide): ''The needs approach considers the financial needs of survivors to determine the appropriate amount of life insurance coverage, including income, debt repayment, education funding, and final expenses.''

Reference (Virginia Documents / Study Guide):

--- Virginia Life & Annuities Insurance Examination Outline, Section 2.1 Needs approach

Answer : B

Before an applicant is tested for HIV, they must sign a consent form that acknowledges their understanding of the test and the potential implications of the results. This is required by law to ensure that the test is done voluntarily and that the applicant is aware of their rights. The other options, such as paying for the test or providing evidence of insurability, are not required before HIV testing.