State RegulationsVA specificDifficulty 1/5
A Virginia beneficiary learns that the insurer has held her life insurance death proceeds while processing the settlement. What is the minimum interest payment Virginia law requires the insurer to pay on such held proceeds?
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Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
Va. Code § 38.2-3115 not only fixes the rate and start date for interest on death proceeds — daily accrual at 2.5% per year from the date of death — it also establishes a minimum interest payment of $5. The floor guarantees that even small amounts of held proceeds generate an actual interest payment rather than a rounded-down zero, reinforcing the statute's purpose of compensating beneficiaries for the waiting period.
Why the other options are wrong
- A) $10 is not the statutory floor; Va. Code § 38.2-3115 sets the minimum interest payment at $5.
- B) $15 does not correspond to the death-proceeds interest floor; the minimum under Va. Code § 38.2-3115 is $5.
- D) $50 is far above the statutory minimum; Va. Code § 38.2-3115 guarantees at least $5 in interest on held death proceeds.
Memory hook
Five dollars minimum: even a short wait earns real interest under § 38.2-3115.