Virginia Life Study Guide

Virginia’s life-policy statutes are not exotic. They sit close enough to the national model that most of what you already know survives the border — and that is precisely the problem. The deviations are small numbers rather than different structures, so a candidate coasting on national material gets eight rows of the table right, builds confidence, and loses the four questions that were worth studying for. This chapter is those four.

The grace period is thirty-one days, and the word “not less than” matters

Va. Code § 38.2-3303 requires a grace period of not less than 31 days for any premium after the first. Not thirty. Not “one month,” which is what an insurer’s marketing copy will say and what a February lapse would make painfully different.

Read the construction as well as the number. “Not less than” is a floor, not a fixed term — an insurer may write a longer grace period into the contract and many do, but it may never write a shorter one. A question asking what Virginia requires and a question asking what a particular policy provides have different answers, and Virginia’s exam can ask either.

Reinstatement — three years, and a six percent ceiling nobody teaches

Section 38.2-3311 gives the owner of a lapsed policy three years from default to reinstate, on four conditions: evidence of insurability, payment of all overdue premiums, payment of interest on those premiums, and reinstatement of any policy indebtedness.

The third condition is where Virginia does something most states do not. The statute caps that interest at a rate not exceeding 6% per year. National material almost never carries a number here, because most states leave the rate to the contract. Virginia legislated it — so “what may the insurer charge on the arrears?” is a Virginia question with a Virginia answer.

Policy loans do not exist until the third year

Section 38.2-3308 is the provision that most reliably contradicts what candidates think they know. The familiar shorthand is that a loan becomes available as soon as there is cash value to lend against. Virginia says a policy loan is available after the policy has been in force three policy years — a waiting period, independent of how quickly value accumulates.

The rate is capped too, and here you have to read the statute rather than the summary. A fixed loan rate may not exceed 8% per year — and that cap sits on both sides of July 1, 1981, not only after it. What the 1981 date actually divides is the alternative: a policy issued on or after July 1, 1981 may instead carry an adjustable maximum rate tied to Moody’s Corporate Bond Yield Average, which an earlier policy could not. Fixed means 8% either way; the date changes what else was available.

Free look, incontestability, and misstatement of age

Three provisions that behave the way you expect, with the details Virginia actually writes.

The free look is 10 days from delivery (§ 38.2-3301), and note the scope: the section is written for individual life insurance policies, and does not by its terms reach annuities. What matters is the remedy: the owner surrenders the policy to the insurer or its agent with a written cancellation request, the policy is void from the beginning, and the insurer refunds any premium paid. Void ab initio, not cancelled going forward — there is no earned premium to deduct. An insurer may print a longer examination period; it may never print a shorter one.

Incontestability is two years from the date of issue, during the lifetime of the insured, except for nonpayment of premiums (§ 38.2-3305). Two clauses do the work there. During the lifetime of the insured means a policy that has been in force two years while the insured is dying does not become incontestable at the graveside. And the nonpayment carve-out is not a contest at all — a policy that lapsed simply is not in force.

Misstatement of age (§ 38.2-3306) adjusts the benefit to the amount the premium paid would have purchased at the correct age at issue. Note the direction: the benefit moves, not the premium. An insured who understated their age has been underpaying, so the death benefit comes down; one who overstated it gets more insurance than they bought.

Viatical settlements, and where the clock starts

Virginia regulates viatical and life settlements under its own act at § 38.2-6000 et seq., and the tested provision is the viator’s right to rescind. Section 38.2-6008(C) requires every viatical settlement contract entered into in the Commonwealth to give the viator “an unconditional right to rescind the contract for at least 15 calendar days from the receipt of the viatical settlement proceeds.” Section 38.2-6007(A)(5) says the same thing in the disclosure the provider must hand over.

Read where the clock starts, because that is the whole point: receipt of the proceeds, not execution of the contract. A viator who signed six weeks ago and has not been paid has not lost anything — the window has not begun. Some states run the period from signing, or from the later of signing and payment; Virginia runs it from the money, full stop, and “at least” makes fifteen days a floor rather than a fixed term.

One more provision in the same subsection is easy to miss and very askable: if the insured dies during the rescission period, the contract is deemed rescinded.

Variable products sit half outside Title 38.2

Selling variable life or variable annuities in Virginia takes the Life and Annuities license plus FINRA registration — Series 6 or 7 and Series 63 — because a variable contract is a security as well as an insurance product. Virginia issues a separate Variable Contract line of authority, and the application asks for a CRD number. One product, two regulators, and the insurance license alone is not enough to touch it.