Under Virginia law, interest on life insurance death benefits payable to a beneficiary begins to accrue on what date, and at what minimum annual rate?

Why A is correct

Va. Code § 38.2-3115 requires interest on life insurance death proceeds to accrue from the date of death, computed daily at 2.5% per year or the insurer's greater applicable interest-settlement rate. The rule protects beneficiaries against the loss of value during the interval between death and payment, an interval the beneficiary does not control. Virginia is distinctive in fixing both the start date and the rate by statute.

Why the other options are wrong

• B) Interest runs from the date of death under Va. Code § 38.2-3115, not from the filing date; 6% is the late-premium interest cap under the grace-period rule, not the proceeds-interest rate.
• C) The contestability period has no bearing on when interest on death proceeds begins; Va. Code § 38.2-3115 keys accrual to the date of death.
• D) The insurer's claim approval date is irrelevant to the statutory start of interest; Va. Code § 38.2-3115 starts the clock at death, not at approval.

Memory hook

Death starts the clock: 2.5% a year from the date of death.