§1960 Waiver of Premium Payments on Due Date

Summary

Allows the Secretary to make rules that let some people skip paying U.S. Government life insurance premiums on the due date and keep their coverage. It covers three groups: people confined in a Department hospital for a compensable disability; people rated temporarily totally disabled and getting compensation; and people judged mentally incompetent who had no legal guardian and whose policy lapsed until a guardian notifies the Department, but not later than six months after a guardian is appointed. For mentally incompetent people the waiver is automatic and can be applied retroactively. Waivers are counted in full calendar months, starting with the month the condition began and ending with the month in which they lose eligibility if they do so for half or more of that month. Any premiums waived will accrue interest at 5 percent per year, compounded annually, from each premium’s due date. If the insured does not pay, the unpaid amounts and interest will be taken from the policy payments or when the policy matures because of permanent total disability or death. If a lien or debt at policy termination (other than death or permanent total disability) is larger than the cash surrender value, the Secretary may transfer funds from the military and naval insurance appropriation into the United States Government Life Insurance Fund to cover the excess.