terms and conditions as the United States Government life insurance which was surrendered. The amount of permanent plan United States Government life insurance issued pursuant to said section 5, section 623, or section 781 shall not be in excess of the amount of insurance which was surrendered. (b) United States Government life insurance on the 5-year level premium term plan, issued pursuant to the provisions of section 5 of the Servicemen's Indemnity Act of 1951, section 623 of the National Service Life Insurance Act, or section 781 of Title 38, United States Code shall be issued under the same terms and conditions as the United States Government life insurance 5-year level premium term policy which expired. The amount of 5-year level premium term insurance issued pursuant to said section 5, section 623 or section 781 shall not be in excess of the amount of term insurance which expired. (c) The amount of insurance granted under said section 5, section 623, or section 781 plus the amount of any other insurance (National Service Life-United States Government life-War Risk) in force under premium-paying conditions, or as paid-up or extended insurance, shall not exceed $10,000. [24 F.R. 7319, Sept. 11, 1959] EFFECTIVE DATE § 6.5 Insurance applied for by person entering active military or naval service. [Revoked, 24 F.R. 7320, Sept. 11, 1959] § 6.6 Insurance applied for under section 310, World War Veterans' Act, 1924, as amended. [Revoked, 24 F.R. 7320, Sept. 11, 1959] § 6.7 Effective date of United States Government life insurance applied for pursuant to the provisions of section 623 of the National Service Life Insurance Act and section 781 of Title 38, United States Code. (a) The effective date of United States Government life insurance issued pursuant to the provisions of section 623 of the National Service Life Insurance Act and section 781 of Title 38, United States, Code may be established upon written request of the applicant as follows: (1) As of the date on which valid application and tender of premiums are made. (2) As of the first day of the month in which valid application and tender of premiums are made. (3) As of the first day of the month following the month in which valid application and tender of premiums are made. (4) As of the first day of any month, but not more than 6 months prior to the month in which valid application and tender of premiums are made: Provided, That there be paid (i) an amount equal to the full reserve on the insurance at the end of the month prior to the month in which application is made, and (ii) the full premium on the amount of insurance for the month in which application is made. (b) Unless otherwise specified by the applicant, the effective date of such United States Government life insurance shall be established as of the date on which valid application and tender of premiums are made. [24 F.R. 7320, Sept. 11, 1959] PREMIUMS § 6.15 Due date of premiums. Premiums on United States Government life insurance are due and payable monthly in advance in legal tender of the United States of America to the Veterans Administration in the city of Washington, District of Columbia or any office of the Veterans Administration authorized to receive premium payments. Premiums may be paid annually, semiannually, or quarterly, in advance, in which case the premium payable will be the sum of the monthly premiums for the period discounted at 32 percent per annum. The discounted premiums for these periods are stated on the first page of the policy. At maturity by death or otherwise, the discounted value at 32 percent per annum of the premiums paid in advance beyond the current calendar month shall be refunded to the insured, if living; otherwise to the beneficiary. If any premium be not paid when due, the policy shall cease and become void except as otherwise provided. [24 F.R. 7320, Sept. 11, 1959] 46050-60-8 Page 97 Government life insurance has been granted, or any person acting on his behalf has deposited in the mail, within the grace period allowed by Veterans Administration regulation for payment of a premium, an envelope properly addressed to the Veterans Administration, Washington 25, D.C., or any field station of the Veterans Administration, containing money, check, draft, or money order, in payment of a premium, such insurance will not lapse for nonpayment of such premium within the grace period: Provided, That any such check or draft is paid on presentation for payment or the conditions of § 6.17a are met. [24 F.R. 7320, Sept. 11, 1959] § 6.20 Deduction of insurance premiums from compensation, retirement pay, or pension. The insured under a United States Government life insurance policy which is not lapsed, may authorize the monthly deduction of premiums from disability compensation, death compensation, dependency and indemnity compensation, retirement pay, disability pension, or death pension that may be due and payable to him under any laws administered by the Veterans Administration in accordance with the following provisions. (a) The authorization must be in writing over the signature of the insured, or his legal representative, and, whenever practicable on such forms as may be prescribed by the Veterans Administration. If insured is incompetent and has no legal representative and has a wife to whom benefits are being paid pursuant to section 3202(f) of Title 38, United States Code and § 13.201 of this chapter, she may authorize payment of insurance premiums through the deduction system. If insured is incompetent and has no legal representative and an institutional award has been made in his behalf, the authorization may be executed by the Manager of the field station in which the insured is hospitalized or receiving domiciliary care, and, in appropriate cases, by the chief officers of State hospitals or other institutions to whom similar awards may have been approved. (b) The monthly disability compensation, death compensation, dependency and indemnity compensation, retirement pay, disability pension, or death pension so due and payable must be equal to, or in excess of, the amount of the insurance premium figured on a monthly basis. [Introductory paragraph and paragraphs (a) and (b) amended, 24 F.R. 7320, Sept. 11, 1959] Prior Amendments 1958: 23 F.R. 681, Feb. 1. § 6.21 * Authorization for deduction of insurance premiums from compensation, retirement pay, or pension. The authorization for deductions from disability compensation, death compensation, dependency and indemnity compensation, retirement pay, disability pension, or death pension to be acceptable for the payment of insurance premiums must be executed and mailed or otherwise delivered to the Veterans Administration while the insurance is not lapsed. Such an authorization will be effective against the benefit payment for the month in which it is mailed or otherwise delivered to the Veterans Administration unless the insured elects to have the authorization become effective against the benefit payment for a succeeding month. However, the deduction made from the benefit payment for the month in which the authorization becomes effective shall be for the insurance premium due in the succeeding calendar month. When premium deductions are authorized in accordance with the provisions of Veterans Administration regulations, the Veterans Administration will make monthly deductions from the benefit payment due and payable to the insured of an amount sufficient to pay the monthly insurance premium. Such deductions will continue so long as the benefit payment due and payable to the insured is sufficient to pay the monthly insurance premium or until the authorization is revoked by the veteran or otherwise terminated. [24 F.R. 7320, Sept. 11, 1959] in fact made, if upon the due date of the premium there is due and payable to the insured an amount of disability compensation, death compensation, dependency and indemnity compensation, retirement pay, disability pension, or death pension sufficient to provide the payment. Any premium authorized to be deducted from such compensation, retirement pay, or pension due and payable to the insured and not actually paid shall be deducted from the amount of such current compensation, retirement pay, or pension that may become due and payable to the insured. The amounts so deducted for premiums shall be deposited and covered into the Treasury to the credit of the United States Government Life Insurance Fund. [24 F.R. 7320, Sept. 11, 1959] § 6.23 Termination of the authorization to deduct insurance premiums from compensation, retirement pay, pension. or Deduction of insurance premiums on United States Government life insurance shall cease and the authorization shall terminate if the disability compensation, death compensation, dependency and indemnity compensation, retirement pay, disability pension, or death pension becomes insufficient to provide the premium or if such compensation, retirement pay, or pension is no longer due and payable to the insured. If authorization was executed by the Manager of a Veterans Administration hospital or domiciliary or chief officer of a State hospital or other institution to make deductions from an institutional award, the authorization will cease and terminate at the termination of the institutional award, and, if subsequent premiums are to be paid by deduction from monthly benefit payments, another authorization must be executed by the insured or his legal representative or his wife. (See § 6.20(a).) The insurance shall lapse after the termination or cancellation of the authorization to deduct premiums from compensation, retirement pay, or pension, unless the premium be otherwise paid within the grace period. The insured will be notified by letter directed to his last address of record, of the termination of the authorization to deduct premiums; but the failure to give such notice or the failure to receive such notice shall not prevent lapse of the insurance. [24 F.R. 7321, Sept. 11, 1959] GRACE PERIOD § 6.35 Establishment of grace period. For the payment of any premium under a United States Government life insurance policy, a grace period of 31 days without interest will be allowed, during which time the policy will remain in force; but if the policy shall become a claim within the grace period, the unpaid premium shall be deducted from the amount of insurance payable. A 5-year level premium term policy shall cease and become void at the end of the 60month period unless renewed as provided in Veterans Administration regulations. [24 F.R. 7321, Sept. 11, 1959] POLICIES § 6.40 Forms of policies. The forms of policies of insurance described and designated below are hereby prescribed for use in granting United States Government life insurance. Contracts of insurance authorized to be made in accordance with the terms and conditions set forth in the forms of policies described and designated in this section are subject in all respects to the applicable provisions of Title 38, United States Code, amendments and supplements thereto, and all Veterans Administration regulations promulgated pursuant thereto. Ordinary life policy (VA Form 9-741) Five-year level premium term policy (VA Form 9-735) Twenty-payment life policy (VA Form 9 747) Thirty-payment life policy (VA Form 9 The 5-year level premium term policy (VA Form 9-735) is substituted for the 5-year convertible term policy (VA Form 9-745). Additions to or modifications of said policies may hereafter be made by the Administrator of Veterans Affairs. [24 F.R. 7321, Sept. 11, 1959] § 6.41 Form to be used in applying for converted insurance. [Revoked, 24 F.R. 7321, Sept. 11, 1959] § 6.42 Forms of application and policies to be used in converting yearly renewable term insurance subsequent to July 2, 1927. [Revoked, 24 F.R. 7321, Sept. 11, 1959] § 6.45 Incontestability of United States Government life insurance. (a) A United States Government life insurance policy shall be incontestable from the date of issuance, reinstatement or conversion, except for fraud, nonpayment of premiums, or on the ground that the applicant was not a member of the military or naval forces of the United States, and the policy is issued free of restrictions as to travel, residence, occupation, or military or naval service. However, no insurance shall be payable for death inflicted as a lawful punishment for crime or military offense, except when inflicted by the enemy: Provided, That the cash value, less any indebtedness, on the date of such death shall be paid to the designated beneficiary if living, or, if there be no designated beneficiary alive at the death of the insured, the said value shall be paid to the estate of the insured. [Paragraph (a) amended, 24 F.R. 7321, Sept. 11, 1959] REFUND OF PREMIUMS IN FRAUD CASES [REVISED] § 6.46 Refund of premiums in fraud cases. Where United States Government life insurance is canceled or voided for fraud and notice thereof is mailed after March 16, 1954, any premiums paid on such insurance for any period subsequent to 2 years after the date insurance was issued, reinstated, or converted because of such fraud shall be refunded without interest. On antedated policies the date of issue or conversion for the purpose of this section is the due date of the first full premium. The amount of any dividends, loan, or other insurance payment made as a result of the fraudulent issue, reinstatement or conversion shall be deducted from such refund. The re fund shall be made to the insured, if living, otherwise to the designated beneficiary; or, if no designated beneficiary survives, to the insured's estate. [24 F.R. 7321, Sept. 11, 1959] CHANGES IN PLAN § 6.51 To a policy at a higher rate of premium as of a current effective date. A United States Government life insurance policy on the 5-year level premium term plan may be exchanged for a policy of the same amount on any plan BENEFICIARY OF UNITED STATES § 6.62 Assignment, claims of creditors and taxation. (a) The proceeds of a United States Government insurance policy shall not be assignable except that any person to whom such insurance shall be payable may assign his interest in such insurance to the spouse, child, grandchild, parent, brother, sister, uncle, aunt, nephew, niece, brother-in-law, or sisterin-law of the insured. No such assignment of a United States Government life insurance policy shall be binding upon the United States unless in writing and until filed in the Veterans Administration. The United States assumes no responsibility for the validity of any assignment. (b) Payments of United States Government life insurance as such are exempt from taxation, but such exemption does not extend to any property purchased in part or wholly out of such payments. Payments of insurance to a beneficiary under a United States Government life insurance policy are exempt from claims of creditors, and are not liable to attachment, levy, or seizure by or under any legal or equitable process whatever, either before or after receipt by the beneficiary. (c) The exemption shall apply against the United States or any agency thereof: Provided, That except as to dividends being held to the credit of the insured for the payment of premiums under the provisions of section 746 of Title 38, United States Code, the United States shall be entitled to collect by setoff or otherwise out of benefits, payable to any beneficiary under a United States Government life insurance policy, the amount of any indebtedness due the United States by such beneficiary because of overpayments or illegal payments made to such beneficiary under laws administered by the Veterans Administration: Provided further, That in the settlement of any claim under a United States Government life insurance policy, the United States shall be entitled to deduct the amount of unpaid premiums or loans, or interest on such premiums or loans; or indebtedness arising from overpayments of dividends, refunds, loans, or other insurance benefits; or any other indebtedness existing under the particular insurance contract. (d) Effective January 1, 1958, payments of insurance to a beneficiary under a United States Government life insurance policy shall be subject to levy for taxes due the United States by such beneficiary. CODIFICATION: § 6.62 was revised, 23 F.R. 681, Feb. 1, 1958. Subsequently, paragraphs (a) and (d) were amended, 24 F.R. 582, Jan. 27, 1959, and paragraph (c) was amended, 24 F.R. 15, Jan. 1, 1959. § 6.70 OPTIONAL SETTLEMENT Selection of optional settlements for minors and incompetents. When an optional mode of settlement of United States Government life insurance heretofore or hereafter matured is available to a beneficiary who is a minor or incompetent, such option may be exercised by his fiduciary, person qualified under section 14 of Title 25, United States Code, or person recognized by the Administrator as having custody of the person or the estate of such beneficiary, and the obligation of the United States under the insurance contract shall be fully satisfied by payment of benefits in accordance with the mode of settlement so selected. [24 F.R. 582, Jan. 27, 1959] Title 38, United States Code, and Veterans Administration regulations issued thereunder, any insurance which has lapsed or may hereafter lapse and which has not been surrendered for a cash value or for paid-up insurance may be reinstated upon written application signed by the applicant, and, except as hereinafter provided in this paragraph, upon payment of all premiums in arrears, with interest from their several due dates, provided such applicant at the time of application and tender of premiums is in the required state of health as shown in § 6.79 (a) or (b), whichever is applicable, and submits evidence thereof at the time of application and tender of premiums as may be satisfactory to the Administrator of Veterans Affairs. Interest on premiums in arrears shall be at the rate of 5 per centum per annum, compounded annually, to the first monthly premium due date after July 31, 1946, and thereafter at the rate of 4 per centum per annum, compounded annually: Provided, That no interest on premiums in arrears will be required if reinstatement is effected within 3 months from the due date of the premium in default. The payment or reinstatement of any indebtedness against any policy must be made, with interest, and if such indebtedness with interest exceeds the reserve of the policy at the time of application for reinstatement thereof, then the amount of such excess shall, except as provided in § 6.81, be paid by the applicant as a condition of the reinstatement of the indebtedness and of the policy. A lapsed United States Government life insurance policy which is in force under extended term insurance may be reinstated without health statement or other medical evidence, if application and tender of premiums with the required interest are made not less than 5 years prior to the date such extended insurance would expire. In any case in which the extended insurance under an endowment policy provides protection to the end of the endowment period, such policy may be reinstated upon application and payment of the premiums with the required interest, and health statement or other medical evidence will not be required. United States Government life insurance on the 5-year level premium term plan may be reinstated at any time after lapse and within the 60-month period upon evidence of the insurability of the |