Virginia-Life-Annuities-and-Health-Insurance Exam Dumps - Virginia Life, Annuities, and Health Insurance Examination Series 11-01

A mutual insurance company is owned by its policyholders rather than shareholders. When the company’s operating results are favorable, dividends may be declared and paid to policyholders as a return of excess premium.

These dividends are not guaranteed and are not considered taxable income in most cases, as they are treated as a refund of premium. Shareholders receive dividends only in stock insurance companies. Beneficiaries receive death benefits, and producers receive commissions, not dividends.

Virginia exam content highlights ownership structure as the key distinction between mutual and stock insurers, making option A correct.

The direct response marketing system involves insurers selling insurance directly to consumers through mass media advertising, mail, telephone, or internet communication, without using insurance agents. This system relies on advertisements that invite prospects to apply directly to the insurer.

Branch office and captive agent systems involve licensed agents who represent the insurer. Contingent systems are related to compensation structures, not distribution methods.

Virginia licensing standards identify direct response marketing as a legitimate method of insurance distribution, with the insurer assuming responsibility for underwriting, policy issuance, and customer service. Because no agent is involved, commissions are typically not paid, which can lower policy costs.

The gatekeeper system requires primary care physician approval for specialist referrals or hospital services, controlling use of services. Exact extract: “The gatekeeper concept requires members to seek primary physician approval for specialized or expensive services, thereby controlling utilization.”

Virginia requires that the Medicare Supplement Buyer’s Guide be delivered at the time of application. This ensures applicants have all necessary information before purchase decisions.

Exact Extract (Virginia Medicare Supplement Regulations): “An outline of coverage and buyer’s guide shall be provided to all applicants at the time of application.”

References (Virginia Documents / Study Guide):

— Virginia Administrative Code 14VAC5-170-150 (Disclosure requirements for Medicare Supplement policies)

Under the Affordable Care Act (ACA), Essential Health Benefits (EHB) include a variety of categories such as hospitalization, laboratory services, and preventive care services. However, adult dental services are not included as one of the ACA's required essential benefits, though they may be offered as part of a separate plan or rider. This distinction is important as it affects coverage requirements and benefits for different age groups.

Virginia Code § 38.2-3501 governs health insurance applications, requiring accuracy and applicant consent. Changes or corrections by an agent (e.g., fixing a misspelled name) must be initialed by the applicant (option B) to verify agreement, as the application becomes part of the contract (Virginia Code § 38.2-3503). Option A (agent) initialing alone risks unauthorized alterations. Option C (physician) is irrelevant; medical input isn’t standard for application edits. Option D (underwriter) assesses, not corrects, applications post-submission. The study guide likely stresses this consumer protection rule, with examples—e.g., an agent correcting a birthdate, initialed by the applicant—ensuring transparency, making B the correct party.

A contingent beneficiary is designated to receive the policy proceeds only if the primary beneficiary is unable to do so, usually due to predeceasing the insured.

Exact Extract (Virginia Life Insurance Study Guide): “Contingent beneficiary—receives benefits if the primary beneficiary dies before the insured.”

References (Virginia Documents / Study Guide):

— Virginia Life Insurance Examination Outline, Beneficiary Designations

The notice of claim is the first step in initiating a health insurance claim. The insured must provide this notice to the insurer within the time limit specified in the policy, or as soon thereafter as reasonably possible. This notice typically includes basic information about the claim, and additional documentation, such as medical bills or a physician's diagnosis, may be required later in the process.