PRIA, Government Policy, Made Personal

Summary

If a service member gave a life insurance policy to someone before entering military service to secure a debt, the person holding that policy cannot use the policy or any rights from that deal during the member’s service or for one year after without a court order. The insurance company may still make policy loans. The holder can act sooner only if the service member gives written permission, the policy’s premiums are actually unpaid, or the insured dies. A court can refuse an order if military service seriously hurts the service member’s ability to pay. Premiums guaranteed under subchapter IV are not counted as unpaid. Anyone who knowingly breaks these rules can be fined under Title 18, jailed for up to one year, or both.

Title 50, §3957

War and National Defense, Source: USLM XML via OLRC

(a)Assignment of policy protected

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)Exception

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)Order refused because of material affect

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)Treatment of guaranteed premiums

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

(e)Misdemeanor

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