§3957 — Title 50 War and National Defense | U.S. Code

Summary

If a servicemember assigned a life insurance policy before joining the military to secure a debt, the person holding that assignment cannot use the policy during the servicemember’s military service or for one year after unless a court allows it. The rule does not apply if the servicemember gives written permission while serving, if premiums are unpaid, or if the insured dies. A court can refuse a request to act on the assignment if military service makes it much harder for the servicemember to pay. Premiums guaranteed under subchapter IV are not treated as unpaid. Anyone who knowingly breaks this rule can be fined as provided in title 18, jailed up to one year, or both.

Title 50, §3957

War and National Defense — Source: USLM XML via OLRC

(a)If a life insurance policy on the life of a servicemember is assigned before military service to secure the payment of an obligation, the assignee of the policy (except the insurer in connection with a policy loan) may not exercise, during a period of military service of the servicemember or within one year thereafter, any right or option obtained under the assignment without a court order.

(b)The prohibition in subsection (a) shall not apply—

(1)if the assignee has the written consent of the insured made during the period described in subsection (a);

(2)when the premiums on the policy are due and unpaid; or

(3)upon the death of the insured.

(c)A court which receives an application for an order required under subsection (a) may refuse to grant such order if the court determines the ability of the servicemember to comply with the terms of the obligation is materially affected by military service.

(d)For purposes of this subsection, premiums guaranteed under the provisions of subchapter IV of this chapter shall not be considered due and unpaid.

(e)A person who knowingly takes an action contrary to this section, or attempts to do so, shall be fined as provided in title 18, or imprisoned for not more than one year, or both.

Notes & Related Subsidiaries

Editorial Notes

Codification Section was formerly classified to section 536 of the former Appendix to this title prior to editorial reclassification and renumbering as this section.

Prior Provisions

A prior section 306 of act Oct. 17, 1940, ch. 888, art. III, as added Oct. 6, 1942, ch. 581, § 12, 56 Stat. 773, related to extension of benefits to dependents, prior to the general amendment of this Act by Pub. L. 108–189. See section 3959 of this title.

Amendments

2010—Subsec. (e). Pub. L. 111–275 amended subsec. (e) generally. Prior to amendment, subsec. (e) related to penalties.

Statutory Notes and Related Subsidiaries

Effective Date

Section applicable to any case not final before Dec. 19, 2003, see section 3 of Pub. L. 108–189, set out as a note under section 3901 of this title.

§3957 Protection of life insurance policy