State RegulationsVA specificDifficulty 2/5
An insured dies two weeks into the grace period with the premium still unpaid. Under Va. Code § 38.2-3303, how does the insurer handle the death benefit?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Va. Code § 38.2-3303 keeps the policy in force during the grace period, so death within the window is a covered death — the claim is not denied. But the statute lets the insurer deduct the overdue premium, with interest, from the settlement. The result balances both protections: the beneficiary collects the death benefit, and the insurer collects the premium the insured never got around to paying.
Why the other options are wrong
- A) Denial is wrong because the policy remains in force during the grace period under Va. Code § 38.2-3303.
- B) The insurer may reduce the payment by the overdue premium plus interest; the beneficiary does not receive a windfall of the unpaid premium.
- C) The adjustment is the overdue premium with interest, not a Commission-set service charge.
Memory hook
Death in grace still pays — minus the late premium and its interest.