State RegulationsVA specificDifficulty 1/5
Under Va. Code § 38.2-3307, dividends on a Virginia participating life insurance policy:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Va. Code § 38.2-3307 governs dividends on participating life insurance policies and requires the insurer to pay them to the policyholder as provided in the policy. The policy's dividend provisions — the elections the policyholder makes among the available options — control how the money is applied. The statutory anchor ensures that a participating policy's dividend promise is enforceable rather than discretionary.
Why the other options are wrong
- A) No annual written request is a precondition; Va. Code § 38.2-3307 requires dividends to be paid as the policy provides.
- B) Unclaimed dividends are not forfeited to the insurer; the policyholder's entitlement under Va. Code § 38.2-3307 does not evaporate after a year.
- C) Dividends belong to the policyholder, not to the insurer's expense budget; Va. Code § 38.2-3307 directs payment to the policyholder as provided in the policy.
Memory hook
Dividends go to the policyholder as the policy provides — not on request, not forfeited.