38 U.S.C. § 1924: In-service waiver of premiums

Summary

Premiums are waived on certain National Service Life Insurance and United States Government life insurance policies that were in effect on January 1, 1959. The waiver covers five-year level term policies and the part of permanent policies that pays for the pure insurance risk. The waiver stays in place while the person is in continuous active service and for 120 days after that, unless it is canceled. While premiums are waived, the policy does not share in dividends or participation. If a policy pays out while premiums are waived, the United States must pay whatever money is needed so the benefit equals its value when it matures. The value may be figured using mortality tables the Secretary prescribes and interest at 2¼% per year for certain National Service policies, 3% per year for other National Service policies, and 3½% per year for United States Government life insurance. The Secretary will move money between the insurance appropriations and the proper insurance funds as needed. For policies that mature on or after January 1, 1972, any premiums waived on or after that date (minus dividends) become a debt against the policy and will be taken out of the proceeds unless paid; the government’s payment is reduced by that amount.

Title 38, §1924

Veterans' Benefits, Source: USLM XML via OLRC

(a)Waiver of all premiums on five-year level premium term insurance and that portion of any permanent insurance premiums representing the cost of the pure insurance risk, as determined by the Secretary, granted on National Service Life Insurance or United States Government life insurance under section 622 of the National Service Life Insurance Act of 1940 and in effect on January 1, 1959, shall, unless canceled, continue in effect according to the provisions of such section for the remainder of the insured’s continuous active service and for one hundred and twenty days thereafter. Such premium waiver renders the contract of insurance nonparticipating during the period the waiver is in effect.

(b)Whenever benefits become payable because of the maturity of such insurance while under the premium waiver continued by this section, liability for payment of such benefits shall be borne by the United States in an amount which, when added to any reserve of the policy at the time of maturity, will equal the then value of such benefits under such policy. Where life contingencies are involved in the calculation of the value of such benefits, the calculation of such liability or liabilities shall be based upon such mortality table or tables as the Secretary may prescribe with interest at the rate of 2¼ per centum per annum as to insurance issued under section 620 and 621 of the National Service Life Insurance Act of 1940, at the rate of 3 per centum per annum as to other National Service Life Insurance, and 3½ per centum per annum as to United States Government life insurance. The Secretary shall transfer from time to time from the National Service Life Insurance appropriation to the National Service Life Insurance Fund and from the military and naval insurance appropriation to the United States Government Life Insurance Fund such sums as may be necessary to carry out the provisions of this section.

(c)In any case in which insurance continued in force under this section matures on or after January 1, 1972, an amount equal to the amount of premiums, less dividends, waived on and after that date shall be placed as an indebtedness against the insurance and, unless otherwise paid, shall be deducted from the proceeds. In such case, the liability of the Government under subsection (b) of this section shall be reduced by the amount so deducted from the proceeds.

Notes & Related Subsidiaries

Editorial Notes

References in Text

section 622 of the National Service Life Insurance Act of 1940, referred to in subsec. (a), is section 622 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 enacted section 823 of former Title 38, Pensions, Bonuses, and Veterans’ Relief, and which was repealed and the provisions thereof reenacted as this section by Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1105. section 620 and 621 of the National Service Life Insurance Act of 1940, referred to in subsec. (b), are section 620 and 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 enacted section 821 and 822 of former Title 38, Pensions, Bonuses, and Veterans’ Relief, and which were repealed and reenacted as section 722 and 723 [now 1922 and 1923], respectively, of this title by Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1105.

Amendments

1991—Pub. L. 102–83 renumbered section 724 of this title as this section and substituted “Secretary” for “Administrator” wherever appearing in subsecs. (a) and (b). 1971—Subsec. (c). Pub. L. 92–197 added subsec. (c).

Statutory Notes and Related Subsidiaries

Effective Date

of 1971 AmendmentAmendment by Pub. L. 92–197 effective Jan. 1, 1972, see section 10 of Pub. L. 92–197, set out as a note under section 1311 of this title.

§1924 In-service Waiver of Premiums