An insured under an individual accident and sickness policy dies without having designated a beneficiary, and a benefit is payable under the policy. Under Va. Code § 38.2-3503(A), how may the insurer handle that payment?

Why A is correct

Va. Code § 38.2-3503(A) includes a payment provision protecting benefits when no beneficiary has been designated: the insurer may pay up to $2,000 to any relative by blood or connection or to other persons appearing to it as equitably entitled, and such payment fully discharges the insurer. The cap keeps the mechanism to modest, clearly deserved sums while sparing small benefits the delay and expense of probate. Insurers that follow this rule are protected, which is why the Virginia Bureau of Insurance treats it as a standard required provision in individual A&H policies.

Why the other options are wrong

• B) An indefinite hold pending an executor is unnecessary; the statute authorizes direct payment to an equitable relative up to the $2,000 cap.
• C) The employer has no automatic claim to the benefit; payment runs to relatives or persons equitably entitled.
• D) Immediate escheat is not the rule; the statute prefers prompt payment to an entitled person within the cap.

Memory hook

No beneficiary? $2,000 to a fair relative discharges the debt and skips probate.