38.2-3115 - Interest on life insurance proceeds.
§ 38.2-3115. Interest on life insurance proceeds.
A. If an action to recover the proceeds due under a life insurance policy orannuity contract results in a judgment against the insurer, interest on thejudgment at the legal rate of interest shall be paid from (i) the date ofpresentation to the insurer of proof of death on a life insurance policy orannuity contract or (ii) the date of maturity of an endowment policy to thedate judgment is entered.
B. If no action is brought, interest upon the principal sum paid to thebeneficiary or policyowner shall be computed daily at an annual rate of 2 1/2percent or at the annual rate currently paid by the insurer on proceeds leftunder the interest settlement option, whichever is greater, commencing fromthe date of death on a life insurance policy or annuity contract claim andfrom the date of maturity of an endowment contract to the date of payment.The interest shall be added to and become a part of the total sum payable.
C. No insurer shall be required to pay interest computed under this sectionif the total interest is less than five dollars.
D. This section shall not apply to (i) credit life insurance for which thepremium is paid wholly from funds of the creditor with no specificidentifiable charge being made to insureds for the insurance and upon whichpost-death interest on the indebtedness is waived by the creditor in anamount at least equal to the amount of interest that would otherwise bepayable under this section; (ii) credit life insurance payable in whole or inpart to a creditor that is an affiliate, as defined in § 13.1-725, of theinsurer and that does not charge interest on the indebtedness from the dateof death of the insured; or (iii) policies or contracts issued prior to July1, 1977, but shall apply to any renewals or reissues of group life insurancepolicies or contracts occurring after that date.
(1977, c. 264, § 38.1-443.1; 1986, c. 562; 1991, c. 368; 2006, c. 209.)