State RegulationsVA specificDifficulty 2/5
An insured returns an individual accident and sickness policy within the right-to-examine period, and the insurer promptly refunds the premium. What is the legal status of the returned policy under Va. Code § 38.2-3502?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Va. Code § 38.2-3502 treats a policy returned during the 10-day right to examine as void from the beginning, and it requires the insurer to refund the premium promptly upon return of the policy. The void-from-the-start rule matters in practice: no claim can attach to a period when the policy was supposedly in force, and neither party is left with a half-terminated contract. Virginia also requires the right-to-examine notice on the policy's first page, so the insured sees the cancellation right where it cannot be missed — a presentation the Virginia Bureau of Insurance expects.
Why the other options are wrong
- B) Coverage does not linger until the refund clears; the policy is void from the beginning the moment it is returned.
- C) No reduced paid-up conversion applies to an exercised free look; the contract is erased, not restructured.
- D) There is no run-off period through the paid-for time; voidness is retroactive to issuance.
Memory hook
Free look returns erase the policy from day one — void from the beginning.