State RegulationsVA specificDifficulty 2/5
A Virginia policyowner wants to pay her new life policy's premiums monthly, but the producer tells her the company permits only annual payment. Under Va. Code § 38.2-3302, is the producer right?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Va. Code § 38.2-3302 ties premium payment to the mode of payment selected by the policyholder. The policyowner — not the producer's preference — drives how often premiums are paid, and Virginia imposes no regulatory bar on monthly premium modes for individual life policies. No Commission approval is needed; the policy simply specifies the modes available, and payment follows the one the policyholder selects.
Why the other options are wrong
- A) The statute keys payment to the policyholder's selection of mode under Va. Code § 38.2-3302, not to a unilateral insurer decision.
- C) Monthly modes are not prohibited in Virginia; the statute contemplates payment in the mode the policyholder selects.
- D) Mode selection is a contractual matter under Va. Code § 38.2-3302; no Commission approval is required to pay in a non-annual mode.
Memory hook
The policyholder picks the payment mode — the producer does not pick it for her.