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Lapse
of policies for nonpayment of premiums
Section 403
(50 U.S.C.
App. §'
543)
The Secretary of Veterans Affairs shall find whether the policy is
entitled to protection under this article and shall notify the insured
and the insurer of such finding. Any policy found by the Secretary to
be entitled to protection under this article shall not, subsequent to
the date of application, and during the period of military service of
the insured or during two years after the expiration of such service,
lapse or otherwise terminate or be forfeited for the nonpayment of a
premium becoming due and payable, or the nonpayment of any indebtedness
or interest.
Rights
and privileges of insured
Section 404
(50 U.S.C.
App. §'
544)
No dividend or other monetary benefit under a policy shall be paid
to an insured or used to purchase dividend additions while a policy is
protected by the provisions of this article except with the consent and
approval of the Secretary of Veterans Affairs. If such consent is not
procured, such 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. No cash value, loan value, or withdrawal of dividend accumulation,
or unearned premium, or other value of similar character shall be available
to the insured while the policy is protected under this article except
upon approval by the Secretary of Veterans Affairs. The insured's right
to change a beneficiary designation or select an optional settlement
for a beneficiary shall not be affected by the provisions of this article.
Settlement
of policies during protection
Section 405
(50 U.S.C.
App. §'
545).
In the event of maturity of a policy as a death claim or otherwise
before the expiration of the period of protection under the provisions
of this article, the insurer in making settlement will deduct from the
amount of insurance the premiums guaranteed under this article, together
with interest thereon at the rate fixed in the policy for policy loans.
If no rate of interest is specifically fixed in the policy, the rate
shall be the rate fixed for policy loans in other policies issued by
the insurer at the time the policy bought under the Act was issued. The
amount deducted by reason of the protection afforded by this article
shall be reported by the insurer to the Secretary of Veterans Affairs.
Guaranty
of premiums and interest
Section 406
(50 U.S.C.
App. §'
546)
Payment of premiums and interest thereon at the rate specified in section
405 hereof becoming due on a policy while protected under the provisions
of this article is guaranteed by the United States, and if the amount
so guaranteed is not paid to the insurer prior to the expiration of the
period of insurance protection under this article, the amount then due
shall be treated by the insurer as a policy loan on such policy, but
if at the expiration of said period the cash surrender value is less
than the amount then due, the policy shall then cease and terminate and
the United States shall pay the insurer the difference between such amount
and the cash surrender value. The amount paid by the United States to
an insurer on account of applications approved under the provisions of
this article, as amended, shall become a debt due to the United States
by the insured on whose account payment was made and, notwithstanding
any other Act, such amount may be collected either by deduction from
any amount due said insured by the United States or as otherwise authorized
by law. Any moneys received as repayment of debts incurred under this
article, as originally enacted and as amended, shall be credited to the
appropriation for the payment of claims under this article.
Regulations;
finality of determinations
Section 407
(50 U.S.C.
App. §'
547)
The Secretary of Veterans Affairs shall provide by regulations for
such rules of procedure and forms as he may deem advisable in carrying
out the provisions of this article. The findings of fact and conclusions
of law made by the Secretary in administering the provisions of this
article shall be final, and shall not be subject to review by any other
official or agency of the Government.
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Above Information Courtesy
of United States Army JAG Corps
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