Virginia State Life, Health and Annuities Practice Exam

The term for voluntarily terminating an insurance policy is known as cancellation. Cancellation refers to the action taken by the policyholder to end the insurance coverage before the expiration date. This can occur for various reasons, such as finding a better policy, no longer needing coverage, or financial considerations.

When a policy is canceled, the insurer typically calculates any applicable refund of premiums paid, minus any fees or adjustment costs. Understanding cancellation is important for policyholders, as it can affect their future insurability and financial planning.

The other terms provided do not specifically refer to the voluntary termination of an insurance policy. Annulment generally relates to declaring something void or invalid, and while revocation implies the rescinding of an authorization or agreement, it is not a commonly used term in the context of insurance policy termination. Withdrawal might suggest pulling out of a situation but doesn’t precisely convey the action of ending an insurance policy.