Virginia Code

Va. Code Ann. § 38.2-3122 (2026)

Proceeds and avails of life insurance policies and annuity contracts free of certain claims

✓ current as of May 2026

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A. As used in this section, "protected insurance item" means, with respect to a policy of life insurance or annuity issued or issued for delivery in the Commonwealth:

1. The cash surrender value of any such policy;

2. The proceeds of any such policy;

3. The withdrawal value of any optional settlement or deposit with any company made pursuant to the terms of such policy; or

4. All other benefits, indemnities, payments, and privileges of every kind from any such policy.

B. In no case whatsoever shall any protected insurance item be liable to execution, attachment, garnishment, or other legal process in favor of any creditor of:

1. The person whose life is insured by the related policy or contract;

2. The person who can, may, or will receive the benefit of that protected insurance item, provided that such person is the insured or owner of the contract, deposit, indemnity, policy, or settlement or the spouse or intended spouse of, a dependent child of, or any other person dependent on, the insured or owner of the contract, deposit, indemnity, policy, or settlement;

3. The person who owns the related contract, deposit, or policy; or

4. The person who effected the related contract, deposit, or policy.

C. The provisions of subsection B shall not apply to any claim by a creditor with respect to a life insurance policy, annuity contract, or deposit with an insurance company that was taken out, made, or assigned in writing for the benefit of the creditor.

D. Notwithstanding the provisions of subsection B and subject to the applicable statute of limitations, the amount of any premiums or other amounts paid for the related life insurance policy, annuity contract, or deposit with an insurance company that were paid with the intent to defraud creditors, with the interest thereon, shall inure to the benefit of the creditors from the proceeds of the policy, contract, or deposit.

E. The exemption provided by this section shall not apply to any protected insurance item issued or effected during the six months preceding the date that the person claiming the exemption (i) files a voluntary petition in bankruptcy; (ii) becomes the subject of an order for relief or is declared insolvent in any federal or state bankruptcy or insolvency proceeding; or (iii) files a petition or answer seeking for himself any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation.

F. The exemption established by this section shall apply to a protected insurance item regardless of whether (i) the right to change the beneficiary thereof is reserved or permitted or (ii) any of the following persons or any of their estates is a contingent beneficiary thereof:

1. The person insured by the related life insurance policy;

2. The person effecting the related life insurance policy or annuity contract;

3. The annuitant of the related annuity contract; or

4. The owner of the related life insurance policy or annuity contract.

Code 1950, § 38-119; 1952, c. 317, § 38.1-448; 1986, c. 562; 2016, c. 274.

Notes of Decisions

Cited in 8 cases, 1997–2020 · leading case: Abbott v. Willey, 479 S.E.2d 528 (Va. 1997).

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Abbott v. Willey, 479 S.E.2d 528 (Va. 1997). · cites it 4× “The defendants also asserted that the plaintiffs’ unjust enrichment claim is barred by Code § 38.2-3122. The trial court sustained the defendants’ demurrer and entered judgment in their favor.”

In Re Watkins, 267 B.R. 703 (Bankr. E.D. Va. 2001). · cites it 10× “2-3123 effectively limits Va.Code Ann. § 38.2-3122, upon which the debtor relies.”

Faulknier v. Shafer, 563 S.E.2d 755 (Va. 2002). · cites it 2× “6 On brief, Shafer asserted that Code § 38.2-3122 allows her to receive the life insurance proceeds free of any claim by a creditor, such as Faulknier.”

Herndon v. Massachusetts Gen. Life Ins., 28 F. Supp. 2d 379 (W.D. Va. 1998). · cites it 3× “, Va.Code §§ 38.2-3122 — 3125, and in some cases even requires that certain types of notice be provided to both, see Va.”

In Re Bissell, 255 B.R. 402 (Bankr. E.D. Va. 2000). “…and poor debtors’ exemptions (§§ 34-4 and 34-26, respectively); (2) life insurance and other insurance exemptions (§§ 38.2-3122 and 38.2-3123); (3) tenants by the entirety exemption (§ 55-37); (4) spendthrift trusts (§ 55-19); and (5) miscellaneous exemptions, such as…”

In re Naranjo, 590 B.R. 126 (Bankr. E.D. Va. 2018). · cites it 28× “The Debtor bases her claim on Va. Code Ann. § 38.2-3122 (B), which protects any "protected insurance item" 1 from the claims of creditors of "any .”

Wood v. Martin (Va. 2020). · cites it 22× “A related statute clarifies this point: Since the purpose of §§ 38.2-3122 and 38.2-3122.1 is to confer additional rights, privileges, and benefits upon beneficiaries and assignees of policies, no beneficiary or assignee shall by reason of these sections be divested or deprived…”

Rebecca Elgin, f/k/a Rebecca Elgin Kroner v. Kroner (Va. Ct. App. 2000). · cites it 2× “See Code § 38.2-3122 (with certain exceptions, exempting life insurance proceeds from the claims of the insured's creditors); N.”

— Va. Code Ann. § 38.2-3122(B) — 2 cases

Wood v. Martin (Va. 2020). “A related statute clarifies this point: Since the purpose of §§ 38.2-3122 and 38.2-3122.1 is to confer additional rights, privileges, and benefits upon beneficiaries and assignees of policies, no beneficiary or assignee shall by reason of these sections be divested or deprived…”

In re Naranjo, 590 B.R. 126 (Bankr. E.D. Va. 2018). “The Debtor bases her claim on Va. Code Ann. § 38.2-3122 (B), which protects any "protected insurance item" 1 from the claims of creditors of "any .”

— Va. Code Ann. § 38.2-3122(C) — 1 case

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