This study paper presents a comprehensive review of virtual inertia (VI)-based inverters in modern power systems. The transition from the synchronous generator (SG)-based conventional power generation to converter-based renewable energy sources (RES) deteriorates the frequency stability of the power system due to the intermittency of wind and photovoltaic (PV) generation. Unlike conventional power generation, the lack of rotational inertia becomes the main challenge to interface RES with the electrical grid via power electronic converters. In the past several years, researchers have addressed this issue by emulating the behavior of SG mathematically via pulse width modulation (PWM) controller linked to conventional inverter systems. These systems are technically known as VI-based inverters, which consist of virtual synchronous machine (VSM), virtual synchronous generator (VSG), and synchronverter. This paper provides an extensive insight into the latest development, application, challenges, and prospect of VI application, which is crucial for the transition to low-carbon power system.