State RegulationsVA specificDifficulty 2/5
A policyowner returns her new Virginia life policy within the free-look period and asks what happens to the coverage she thought she had. Under Va. Code § 38.2-3301, which statement is correct?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Va. Code § 38.2-3301, when a policyowner exercises the right to examine and returns the policy within the period, the policy is void from the beginning — as if it had never been issued — and the insurer refunds the premium. That retroactive cancellation is the defining feature of the free look: there is no coverage to claim during or after the window once the return is made, and the policyholder is put back exactly where she started financially.
Why the other options are wrong
- A) The returned policy is void from the beginning under Va. Code § 38.2-3301, so no coverage survives for claims during the window.
- C) The return does not wait for the insurer's acceptance; the statute's effect is immediate and retroactive.
- D) The premium is refunded in full; the insurer may not keep any part of it as a service charge.
Memory hook
Free look return = the policy never existed: void from the beginning, premium back.