38 U.S.C. § 1904 — Plans of insurance

Page 497 TITLE 38—VETERANS’ BENEFITS § 1904 ‘‘Veterans’ Special Life Insurance’’ for ‘‘Veterans’ spe- cial term insurance’’ in item 723. 1971—Pub. L. 92–188, § 3, Dec. 15, 1971, 85 Stat. 645, sub- stituted ‘‘Payment or use of dividends’’ for ‘‘Dividends to pay premiums’’ in item 707. 1970—Pub. L. 91–291, § 7, June 25, 1970, 84 Stat. 331, sub- stituted ‘‘Duration and termination of coverage; con- version’’ for ‘‘Termination of coverage; conversion’’ in item 768. 1965—Pub. L. 89–214, § 2, Sept. 29, 1965, 79 Stat. 886, re- designated ‘‘SUBCHAPTER III—GENERAL’’ as ‘‘SUB- CHAPTER IV—GENERAL’’ and inserted ‘‘SUB- CHAPTER III—SERVICEMEN’S GROUP LIFE INSUR- ANCE’’ comprising items 765 to 776. 1964—Pub. L. 88–664, § 12(c), Oct. 13, 1964, 78 Stat. 1099, added item 725. SUBCHAPTER I—NATIONAL SERVICE LIFE INSURANCE § 1901. Definitions For the purposes of this subchapter— (1) The term ‘‘insurance’’ means National Service Life Insurance. (2) The terms ‘‘widow’’ or ‘‘widower’’ mean a person who was the lawful spouse of the insured at the maturity of the insurance. (3) The term ‘‘child’’ means a legitimate child, an adopted child, and, if designated as bene- ficiary by the insured, a stepchild or an illegit- imate child. (4) The terms ‘‘parent’’, ‘‘father’’, and ‘‘moth- er’’ mean a father, mother, father through adop- tion, mother through adoption, persons who have stood in loco parentis to a member of the military or naval forces at any time before entry into active service for a period of not less than one year, and a stepparent, if designated as beneficiary by the insured. (Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1148, § 701; renumbered § 1901, Pub. L. 102–83, § 5(a), Aug. 6, 1991, 105 Stat. 406.) Editorial Notes PRIOR PROVISIONS Prior section 1901 was renumbered section 3901 of this title. Another prior section 1901, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1215, as amended by Pub. L. 90–77, title II, § 204(a), Aug. 31, 1967, 81 Stat. 184, related to veterans el- igible for assistance, prior to the general revision of chapter 39 of this title by Pub. L. 91–666. See sections 3901 and 3902 of this title. AMENDMENTS 1991—Pub. L. 102–83 renumbered section 701 of this title as this section. § 1902. Premium rates and policy values Premium rates for insurance shall be the net rates based upon the American Experience Table of Mortality and interest at the rate of 3 per centum per annum. All cash, loan, paid-up, and extended values, and all other calculations in connection with insurance, shall be based upon said American Experience Table of Mortality and interest at the rate of 3 per centum per annum. (Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1148, § 702; renumbered § 1902, Pub. L. 102–83, § 5(a), Aug. 6, 1991, 105 Stat. 406.) Editorial Notes PRIOR PROVISIONS Prior section 1902 was renumbered section 3902 of this title. Another prior section 1902, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1215, related to limitation on types of as- sistance furnished and veterans otherwise entitled, prior to the general revision of chapter 39 of this title by Pub. L. 91–666. See sections 3902 and 3903 of this title. AMENDMENTS 1991—Pub. L. 102–83 renumbered section 702 of this title as this section. § 1903. Amount of insurance Insurance shall be issued in any multiple of $500 and the amount of insurance with respect to any one person shall be not less than $1,000 or more than $10,000. No person may carry a com- bined amount of National Service Life Insurance and United States Government life insurance in excess of $10,000 at any one time. The limita- tions of this section shall not apply to the addi- tional paid up insurance the purchase of which is authorized under section 1907 of this title. (Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1148, § 703; Pub. L. 92–188, § 1, Dec. 15, 1971, 85 Stat. 645; re- numbered § 1903 and amended Pub. L. 102–83, § 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 406.) Editorial Notes PRIOR PROVISIONS Prior section 1903 was renumbered section 3903 of this title. Another prior section 1903, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1216, related to limitation on amounts paid by United States, prior to the general revision of chapter 39 of this title by Pub. L. 91–666. See section 3902 of this title. AMENDMENTS 1991—Pub. L. 102–83 renumbered section 703 of this title as this section and substituted ‘‘1907’’ for ‘‘707’’. 1971—Pub. L. 92–188 made section limitations inappli- cable to the additional paid up insurance purchase of which is authorized under section 707 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1971 AMENDMENT Amendment by Pub. L. 92–188 effective on date estab- lished by Administrator but in no event later than first day of first calendar month beginning more than six calendar months after Dec. 15, 1971, see section 4 of Pub. L. 92–188, set out as a note under section 1907 of this title. § 1904. Plans of insurance (a) Insurance may be issued on the following plans: Five-year level premium term, ordinary life, twenty-payment life, thirty-payment life, twenty-year endowment, endowment at age sixty, and endowment at age sixty-five. Level premium term insurance may be converted as of the date when any premium becomes or has be- come due, or exchanged as of the date of the original policy, upon payment of the difference in reserve, at any time while such insurance is in force and within the term period to any of the foregoing permanent plans of insurance, except that conversion to an endowment plan may not be made while the insured is totally disabled. Page 498 TITLE 38—VETERANS’ BENEFITS § 1904 (b) Under such regulations as the Secretary may promulgate a policy of participating insur- ance may be converted to or exchanged for in- surance issued under this subsection on a modi- fied life plan. Insurance issued under this sub- section shall be on the same terms and condi- tions as the insurance which it replaces, except (1) the premium rates for such insurance shall be based on the 1958 Commissioners Standard Ordinary Basic Table of Mortality and interest at the rate of 3 per centum per annum; (2) all cash, loan, paid-up, and extended values shall be based on the 1958 Commissioners Standard Ordi- nary Basic Table of Mortality and interest at the rate of 3 per centum per annum; and (3) at the end of the day preceding the sixty-fifth birthday of the insured the face value of the modified life insurance policy or the amount of extended term insurance thereunder shall be automatically reduced by one-half thereof, with- out any reduction in premium. (c) Under such regulations as the Secretary may promulgate, a policy of nonparticipating insurance may be converted to or exchanged for insurance issued under this subsection on a modified life plan. Insurance issued under this subsection shall be on the same terms and con- ditions as the insurance which it replaces, ex- cept that (1) term insurance issued under sec- tion 621 of the National Service Life Insurance Act of 1940 shall be deemed for the purposes of this subsection to have been issued under sec- tion 1923(b) of this title; and (2) at the end of the day preceding the sixty-fifth birthday of the in- sured the face value of the modified life insur- ance policy or the amount of extended term in- surance thereunder shall be automatically re- duced by one-half thereof, without any reduc- tion in premium. Any person eligible for insur- ance under section 1922(a), or section 1925 of this title may be granted a modified life insurance policy under this subsection which, subject to exception (2) above, shall be issued on the same terms and conditions specified in section 1922(a) or section 1925, whichever is applicable. (d) Any insured whose modified life insurance policy is in force by payment or waiver of pre- miums on the day before the insured’s sixty- fifth birthday may upon written application and payment of premiums made before such birth- day be granted National Service Life Insurance, on an ordinary life plan, without physical exam- ination, in an amount of not less than $500, in multiples of $250, but not in excess of one-half of the face amount of the modified life insurance policy in force on the day before the insured’s sixty-fifth birthday. Insurance issued under this subsection shall be effective on the sixty-fifth birthday of the insured. The premium rate, cash, loan, paid-up, and extended values on the ordi- nary life insurance issued under this subsection shall be based on the same mortality tables and interest rates as the insurance issued under the modified life policy. Settlements on policies in- volving annuities on insurance issued under this subsection shall be based on the same mortality or annuity tables and interest rates as such set- tlements on the modified life policy. If the in- sured is totally disabled on the day before the insured’s sixty-fifth birthday and premiums on the insured’s modified life insurance policy are being waived under section 1912 of this title or the insured is entitled on that date to waiver under such section the insured shall be auto- matically granted the maximum amount of in- surance authorized under this subsection and premiums on such insurance shall be waived during the continuous total disability of the in- sured. (e) After June 30, 1972, and under such regula- tions as the Secretary may promulgate, insur- ance may be converted to or exchanged for in- surance on a modified life plan under the same terms and conditions as are set forth in sub- sections (b) and (c) of this section except that at the end of the day preceding the seventieth birthday of the insured the face value of the modified life insurance policy or the amount of extended insurance thereunder shall be auto- matically reduced by one-half thereof, without any reduction in premium. Any insured whose modified life insurance policy issued under this subsection is in force by payment or waiver of premiums on the day before the insured’s seven- tieth birthday may be granted insurance on the ordinary life plan upon the same terms and con- ditions as are set forth in subsection (d) of this section except that in applying such provisions the seventieth birthday is to be substituted for the sixty-fifth birthday. Notwithstanding any other provision of law or regulations the Sec- retary under such terms and conditions as the Secretary determines to be reasonable and prac- ticable and upon written application and pay- ment of the required premiums, reserves, or other necessary amounts made within one year from the effective date of this subsection by an insured having in force a modified life plan issued under subsection (b) or (c) of this section, including any replacement insurance issued under subsection (d) of this section or other pro- vision of this title, can exchange such insurance without proof of good health for an amount of insurance issued under this subsection equal to the insurance then in force or which was in force on the day before such insured’s sixty-fifth birthday, whichever is the greater. (Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1148, § 704; Pub. L. 88–664, § 12(b), Oct. 13, 1964, 78 Stat. 1098; Pub. L. 92–193, Dec. 15, 1971, 85 Stat. 648; Pub. L. 97–295, § 4(21), Oct. 12, 1982, 96 Stat. 1306; Pub. L. 99–576, title VII, § 701(21), Oct. 28, 1986, 100 Stat. 3292; renumbered § 1904 and amended Pub. L. 102–83, §§ 4(b)(1), (2)(E), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 404–406.) Editorial Notes REFERENCES IN TEXT Section 621 of the National Service Life Insurance Act of 1940, referred to in subsec. (c), is section 621 of act Oct. 8, 1940, ch. 757, title VI, pt. I, as added Apr. 25, 1951, ch. 39, pt. II, § 10, 65 Stat. 36, which was repealed and the provisions thereof reenacted as section 723 [now 1923] of this title by Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1105. PRIOR PROVISIONS Prior section 1904 was renumbered section 3904 of this title. Another prior section 1904, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1216, related to prohibition against dupli- cation of benefits, prior to the general revision of chap- Page 499 TITLE 38—VETERANS’ BENEFITS § 1907 ter 39 of this title by Pub. L. 91–666, § 2(a), Jan. 11, 1971, 84 Stat. 1998. See section 3903 of this title. AMENDMENTS 1991—Pub. L. 102–83, § 5(a), renumbered section 704 of this title as this section. Subsec. (b). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted ‘‘Secretary’’ for ‘‘Administrator’’. Subsec. (c). Pub. L. 102–83, § 5(c)(1), substituted ‘‘1923(b)’’ for ‘‘723(b)’’, ‘‘1922(a)’’ for ‘‘722(a)’’ in two places, and ‘‘1925’’ for ‘‘725’’ in two places. Pub. L. 102–83, § 4(b)(1), (2)(E), substituted ‘‘Sec- retary’’ for ‘‘Administrator’’. Subsec. (d). Pub. L. 102–83, § 5(c)(1), substituted ‘‘1912’’ for ‘‘712’’. Subsec. (e). Pub. L. 102–83, § 4(b)(1), (2)(E), substituted ‘‘Secretary’’ for ‘‘Administrator’’ wherever appearing. 1986—Subsec. (d). Pub. L. 99–576, § 701(21)(A), sub- stituted ‘‘the insured’s’’ for ‘‘his’’ in four places, and ‘‘the insured’’ for ‘‘he’’ in two places. Subsec. (e). Pub. L. 99–576, § 701(21)(B), substituted ‘‘the insured’s’’ for ‘‘his’’ and ‘‘the Administrator’’ for ‘‘he’’. 1982—Subsec. (e). Pub. L. 97–295 substituted ‘‘After June 30, 1972,’’ for ‘‘On and after the effective date of this subsection’’, and substituted ‘‘subsection’’ for ‘‘subsections’’ after ‘‘plan issued under’’. 1971—Subsec. (e). Pub. L. 92–193 added subsec. (e). 1964—Pub. L. 88–664 designated existing provisions as subsec. (a) and added subsecs. (b) to (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1971 AMENDMENT Pub. L. 92–193 provided that the amendment made by Pub. L. 92–193 is effective first day of first calendar month which begins more than six calendar months after Dec. 15, 1971. EFFECTIVE DATE OF 1964 AMENDMENT Amendment by Pub. L. 88–664 effective first day of first calendar month which begins more than six cal- endar months after Oct. 13, 1964, see section 12(d) of Pub. L. 88–664, set out as an Effective Date note under section 1925 of this title. § 1905. Renewal All level premium term policies, except as otherwise provided in this section, shall cease and terminate at the expiration of the term pe- riod. At the expiration of any term period any five-year level premium term policy which has not been exchanged or converted to a permanent plan of insurance and which is not lapsed shall be renewed as level premium term insurance without application for a successive five-year period at the premium rate for the attained age without medical examination. However, renewal will be effected in cases where the policy is lapsed only if the insured makes application for reinstatement and renewal of the term policy within five years after the date of lapse, and re- instatement in such cases shall be under the terms and conditions prescribed by the Sec- retary. In any case in which the insured is shown by evidence satisfactory to the Secretary to be totally disabled at the expiration of the level premium term period of the insurance under conditions which would entitle the in- sured to continued insurance protection but for such expiration, the insurance, if subject to re- newal under this section, shall be automatically renewed for an additional period of five years at the premium rate for the then attained age, un- less the insured has elected insurance on some other available plan. (Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1148, § 705; Pub. L. 91–291, § 8, June 25, 1970, 84 Stat. 331; Pub. L. 99–576, title VII, § 701(22), Oct. 28, 1986, 100 Stat. 3292; renumbered § 1905 and amended Pub. L. 102–83, §§ 4(b)(1), (2)(E), 5(a), Aug. 6, 1991, 105 Stat. 404–406.) Editorial Notes PRIOR PROVISIONS Prior section 1905, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1216; Pub. L. 90–77, title II, § 204(b), Aug. 31, 1967, 81 Stat. 184, related to applications, prior to the general revision of chapter 39 of this title by Pub. L. 91–666, § 2(a), Jan. 11, 1971, 84 Stat. 1998. AMENDMENTS 1991—Pub. L. 102–83 renumbered section 705 of this title as this section and substituted ‘‘Secretary’’ for ‘‘Administrator’’ in two places. 1986—Pub. L. 99–576 substituted ‘‘the’’ for ‘‘his’’ in three places and ‘‘the insured’’ for ‘‘him’’. 1970—Pub. L. 91–291 made it a requirement for re- newal of lapsed policies that the insured make applica- tion for reinstatement and renewal of his term policy within five years after the date of lapse and struck out provision that the lapse occur within two months be- fore the expiration of the term period. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1970 AMENDMENT Amendment by Pub. L. 91–291 effective June 25, 1970, see section 14(a) of Pub. L. 91–291, set out as a note under section 1317 of this title. § 1906. Policy provisions Provisions for cash, loan, paid-up, and ex- tended values, dividends from gains and savings, refund of unearned premiums, and such other provisions as may be found to be reasonable and practicable may be provided for in the policy of insurance from time to time by regulations pro- mulgated by the Secretary. (Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1149, § 706; renumbered § 1906 and amended Pub. L. 102–83, §§ 4(b)(1), (2)(E), 5(a), Aug. 6, 1991, 105 Stat. 404–406.) Editorial Notes AMENDMENTS 1991—Pub. L. 102–83 renumbered section 706 of this title as this section and substituted ‘‘Secretary’’ for ‘‘Administrator’’. § 1907. Payment or use of dividends (a) Until and unless the Secretary has received from the insured a request or directive in writ- ing exercising any other dividend option allow- able under the insured’s policy, any dividend ac- cumulations and unpaid dividends shall be ap- plied in payment of premiums becoming due on insurance subsequent to the date the dividend is payable after January 1, 1952. (b) No claim by an insured for payment in cash of a special dividend declared prior to January 1, 1952, shall be processed by the Secretary unless such claim was received within six years after such dividend was declared. Whenever any claim for payment of a special dividend, the processing of which is barred by this subsection, is received