50 U.S.C. § 3975: Policy restrictions

Summary

While a policy is protected under this subchapter, dividends or other money from the policy cannot be paid to the insured or used to buy extra dividend benefits unless the Secretary of Veterans Affairs approves. If approval is denied, those amounts must be added to the policy’s value and held until final settlement. Also, while protected, cash value, loan value, dividend withdrawals, unearned premiums, or similar policy values cannot be accessed by the insured without the Secretary’s approval. The insured still may change a beneficiary or choose an optional settlement for a beneficiary.

Title 50, §3975

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(a)Dividends

While a policy is protected under this subchapter, a dividend or other monetary benefit under a policy may not be paid to an insured or used to purchase dividend additions without the approval of the Secretary of Veterans Affairs. If such approval is not obtained, the dividends or benefits shall be added to the value of the policy to be used as a credit when final settlement is made with the insurer.

(b)Specific restrictions

While a policy is protected under this subchapter, cash value, loan value, withdrawal of dividend accumulation, unearned premiums, or other value of similar character may not be available to the insured without the approval of the Secretary. The right of the insured to change a beneficiary designation or select an optional settlement for a beneficiary shall not be affected by the provisions of this subchapter.

Notes & Related Subsidiaries

Editorial Notes

Codification Section was formerly classified to section 545 of the former Appendix to this title prior to editorial reclassification and renumbering as this section.

Prior Provisions

A prior section 405 of act Oct. 17, 1940, ch. 888, art. IV, 54 Stat. 1184; Oct. 6, 1942, ch. 581, § 13, 56 Stat. 775; Pub. L. 102–12, § 9(16), Mar. 18, 1991, 105 Stat. 40, related to deduction of unpaid premiums upon settlement of policies maturing during protection, prior to the general amendment of this Act by Pub. L. 108–189. See section 3976 of this title.

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.

§3975 Policy Restrictions