State RegulationsVA specificDifficulty 2/5
A producer offers to have an applicant's life insurance policy dated several months earlier so the applicant can be rated at a younger age and pay a lower premium. Under Virginia law, this practice is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Va. Code §§ 38.2-3104 and 38.2-3316 prohibit dating a policy so as to misrepresent when the coverage actually takes effect. Dating a policy earlier so the applicant is rated at a fictitiously younger age misrepresents the effective date and creates a pricing advantage the applicant is not entitled to. The premium must be based on the applicant's true age and the coverage's true inception, and violations expose both the insurer and the producer to action by the Virginia Bureau of Insurance.
Why the other options are wrong
- A) A waiver cannot legitimize an improper policy date; Va. Code §§ 38.2-3104 and 38.2-3316 prohibit the practice regardless of the applicant's consent.
- B) Preserving a client relationship never justifies misdating a policy; the dating rules apply to every sale.
- C) There is no group-policy carve-out for improper dating; the prohibition is not limited by the type of coverage.
Memory hook
Backdating for a younger rating is a misrepresentation, not a discount.