50 U.S.C. § 3976: Deduction of unpaid premiums

Summary

When an insurance policy pays out because a servicemember dies or the policy matures while it is protected, the insurer must subtract any unpaid premiums the law guarantees. The insurer must also add interest at the policy’s loan rate. If no loan rate is shown in the policy, the insurer must use the same loan rate it used for its other policies when this policy was issued. The insurer must report the amount it deducted to the Secretary of Veterans Affairs.

Title 50, §3976

War and National Defense, Source: USLM XML via OLRC

(a)Settlement of proceeds

If a policy matures as a result of a servicemember’s death or otherwise during the period of protection of the policy under this subchapter, the insurer in making settlement shall deduct from the insurance proceeds the amount of the unpaid premiums guaranteed under this subchapter, together with interest due at the rate fixed in the policy for policy loans.

(b)Interest rate

If the interest rate is not specifically fixed in the policy, the rate shall be the same as for policy loans in other policies issued by the insurer at the time the insured’s policy was issued.

(c)Reporting requirement

The amount deducted under this section, if any, shall be reported by the insurer to the Secretary of Veterans Affairs.

Notes & Related Subsidiaries

Editorial Notes

Codification Section was formerly classified to section 546 of the former Appendix to this title prior to editorial reclassification and renumbering as this section.

Prior Provisions

A prior section 406 of act Oct. 17, 1940, ch. 888, art. IV, 54 Stat. 1184; Oct. 6, 1942, ch. 581, § 13, 56 Stat. 775; Apr. 3, 1948, ch. 170, § 6, 62 Stat. 160, related to guaranty of premiums and interest by United States, settlement of amounts due upon expiration of protection, subrogation of United States, and crediting debt repayments, prior to the general amendment of this Act by Pub. L. 108–189. See section 3977 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.

§3976 Deduction of Unpaid Premiums