§1960 Waiver of premium payments on due date

Summary

The Secretary may make rules to let people skip paying premiums on U.S. Government life insurance when they are due so the policy does not lapse. This can apply in three situations: hospital confinement for a compensable disability, a rating of temporary total disability that gives compensation, and mental incompetence when no guardian has been appointed. For mentally incompetent people the waiver can be granted without asking and can be made retroactive. The waiver is counted in whole calendar months, starting the month the condition begins and ending with the month in which half or more of the month they are no longer eligible. Any waived premiums will accrue interest at 5 percent per year, compounded yearly, from the original due date. If the insured does not pay, the interest will be taken out of any insurance settlement or when the policy matures because of permanent total disability or death. If a lien or debt created under these rules is larger than the policy’s cash surrender value when the policy ends for reasons other than death or permanent total disability, the Secretary may transfer funds from the military and naval insurance appropriation to the United States Government Life Insurance Fund to cover the excess.