insurance which has not been so converted or exchanged and which matures within the time limitation provided in subdivision (i) (b) of this subparagraph will be based on the amount of insurance which is in force at death or the largest amount of insurance which was in force during any of the premium months of November 1960, December 1960 or January 1961, whichever is the lesser.

(iii) A dividend payable under the provisions of this subparagraph will be paid as soon as practicable after whichever of the following dates is the earlier:

(a) The date any portion of the insurance is converted or exchanged under section 723 (b) within the period stated in subdivision (i)(a) of this subparagraph;

(b) The date of death of the policyholder within the period stated in subdivision (i) (b) of this subparagraph.

(c) General. (1) The term "timely payment of premiums" as used in Public Law 87-223 will include section 621 and section 723 (b) insurance where the effective date of reinstatement is during one of the premium months of November 1960, December 1960, or January 1961.

(2) Among other factors, the dividend will be based on the period insurance was in force under section 621 prior to the premium due date in February 1961, except that the period during which premiums were waived under section 622 of the National Service Life Insurance Act or 38 U.S.C. 724 will be excluded.

(3) Dividends payable under the provisions of Public Law 87-223 shall be paid, without interest, in cash to the policyholder, if living. If the policyholder is dead and the insurance matured such dividends shall be paid to the person currently entitled to receive payment under this policy. If the policy is not in force at death any such unpaid dividends shall be paid to the insured's estate. (Instruction 1, Public Law 87223)

[26 FR. 9993, Oct. 25, 1961]

§ 8.186 National Service Life Insurance premium refunds-Philippine vet

erans.

(a) Provisions of the law. Section 1 of Public Law 89-641 provides for the refund of National Service Life Insurance premiums erroneously deducted from arrears in pay of members of the organized military forces of the Philippine

Commonwealth Army ordered into the service of the Armed Forces of the United States. The basic provisions of the law as implemented by this issue are:

(1) An application for the refund must be made within 2 years from the date of enactment.

(2) The application must be filed with the Government of the Republic of the Philippines, the Philippine Panel, Joint RP-U.S. Veterans Commission.

(3) An appropriate official of the Philippine Government will certify those claims which are valid according to their records and deny those claims which they deem invalid and for which the Veterans Administration finds there is no entitlement.

(4) All refunds will be made from the National Service Life Insurance appropriation.

(5) If the veteran is deceased, the refund may be made only to the following individuals in the order named:

(1) To the widow or widower of such person, if living;

(ii) If no widow or widower, to the child or children of such person, if living, in equal shares; or

(iii) If no widow, widower, child, or children, to the parent or parents of such person, if living, in equal shares.

(6) No refund will be made to the heirs or legal representatives as such of any veteran or any beneficiary of such veteran.

(7) If the veteran is deceased and no individual within the permitted class survives, no payment will be made.

(8) Applications will be distributed by the Philippine Government.

(9) All refunds will be made in U.S. Dollars at the rate of $1 for each two pesos. This reflects the rate of exchange that existed at the time the deductions were made.

(b) Entitlement where veteran is deceased. (1) The term "widow or widower" is defined as the lawful wife or husband of the veteran at the time of death. A subsequent remarriage will not become a bar to entitlement.

(2) The term "child or children" is defined as a legitimate child, a legally adopted child or an illegitimate child; and without regard to age marital status, school attendance or income.

(3) The term "parent or parents" is defined as natural parents only. The refund will be made to them in equal shares, if living; otherwise, all to the survivor; and in either case, without re

gard to income or dependency. Payment will not be made to any claimant who did not exercise the legal and moral obligations of a parent. In that event, the entire amount will be payable to the remaining parent.

(4) Proof of relationship and death will be established in accordance with the applicable §§ 3.204 through 3.212 of this chapter.

(c) Types of applications. VA Form 29-8366 (NR), Application for Refund of Erroneous National Service Life Insurance Premium Deduction-Philippine Commonwealth Army Veterans, is provided for use by living Philippine veterans. VA Form 29–8366a (NR), Application for Refund of Erroneous National Service Life Insurance Premium Deduction-Deceased Philippine Commonwealth Army Veterans, is provided for use by eligible relatives of deceased Philippine veterans. (Instruction 1, Public Law 89-641)

(80 Stat. 884; 38 U.S.C. 107 note) [32 F.R. 923, Jan. 26, 1967]

(a) The term "eligible veteran" means any veteran who is or has been granted assistance in securing a suitable housing unit under chapter 21 of title 38, United States Code, and who has not attained his 70th birthday.

(b) The term "grant” means the monetary assistance given to a veteran in acquiring a suitable housing unit under chapter 21 of title 38, United States Code.

(c) The term "housing unit" means a family dwelling or unit, together with the necessary land therefor, that has been or will be purchased, constructed, or remodeled with a grant to meet the needs of an eligible veteran and of his family, and is or will be owned and occupied by him as his home,

or a family dwelling or unit, including the necessary land therefor, acquired by an eligible veteran to be used as his residence after selling or otherwise disposing of title to the housing unit for which his grant was made.

(d) The term "Veterans Mortgage Life Insurance" means the mortgage protection life insurance authorized for veterans under 38 U.S.C. 806.

(e) The term "initial amount of insurance" means the amount of insurance corresponding in amount to the unpaid principal of a mortgage loan outstanding on a housing unit owned or to be acquired by an eligible veteran on August 11, 1971, or on the date of approval of his grant made under chapter 21 of title 38, United States Code, whichever is the later date.

(f) The term "mortgage loan" means any loan, lien, or other indebtedness incurred by an eligible veteran to buy, build, remodel, or enlarge a housing unit, the payment of which loan, lien, or indebtedness is secured by a mortgage lien, or other equivalent security of record, on the housing unit in the usual legal form employed in the community in which the property is situated. The term also includes refinancing of such an indebtedness to avoid a default, to consolidate liens, to renew or extend the time for payment of the indebtedness, and in cases where the housing unit is being bought, built, remodeled, or enlarged by increasing the amount of such an indebtedness.

(g) The term "owned" means the eligible veteran has or will acquire an interest in the housing unit which is:

(1) A fee simple estate, or

(2) A leasehold estate, the unexpired term of which, including renewals at the option of the lessee, is not less than 50 years, or

(3) An interest in a residential unit in a cooperative or a condominium type development which in the judgment of the Chief Benefits Director or the Director, Loan Guaranty Service, provides a right of occupancy for a period of not less than 50 years: Provided, The title to such estate or interest is or shall be such as is acceptable to prudent lending institutions, informed buyers, title companies, and attorneys, generally, in the community.

(h) Whenever in the regulations relating to Veterans Mortgage Life Insurance, a personal pronoun in the masculine gender is used or appears, it shall

be taken to include the feminine also, unless the context clearly indicates the contrary.

§ 8a.2 Maximum amount of insurance.

(a) Each eligible veteran is authorized a life-time maximum amount of insurance under section 806 of title 38, United States Code, not to exceed $30,000, to be used as needed for insurance on his life during periods he is obligated under a mortgage loan. Whenever insurance on the life of an eligible veteran is reduced because of a reduction of the principal of his mortgage loan, or in accordance with the amortization schedule of his mortgage loan, his lifetime maximum of $30,000 is permanently reduced by such an amount, except in the case of a reduction of the principal of the mortgage loan resulting from a sale of the property or a refinancing of the loan.

(b) The maximum amount of insurance in force on any one life at one time shall not exceed the lesser of the following amounts:

(1) $30,000.

(2) The reduced maximum amount of insurance available to an eligible veteran.

(3) Where the grant was approved and fully disbursed prior to August 11, 1971, the amount of the unpaid principal of the mortgage loan outstanding on that date on a housing unit then owned and occupied by the eligible veteran.

(4) Where the grant was approved prior to August 11, 1971, but had not been fully disbursed on that date, the amount of the unpaid principal of the mortgage loan outstanding on that date on a housing unit then owned and occupied by the eligible veteran, or on a housing unit then in the process of construction or remodeling for him, and such initial amount of insurance may be adjusted upward, subject to the maximum insurance available to the eligible veteran, or downward, depending upon the amount of the mortgage loans outstanding on the date of full disbursement of the grant, or on the date of the final settlement of the purchase, construction, or remodeling agreement, whichever date is the later date.

(5) Where the grant is approved on or after August 11, 1971, the amount of the unpaid principal of the mortgage loan outstanding on the date of approval

of the grant on a housing unit then owned and occupied by the eligible veteran, or on a housing unit being or to be constructed or remodeled for him, and such initial amount of insurance may be adjusted upward, subject to the maximum insurance available to the eligible veteran, or downward, depending upon the amount of the mortgage loans outstanding on the date of full disbursement of the grant, or on the date of final settlement of the purchase, construction, or remodeling agreement, whichever date is the later date.

(6) Where an eligible veteran ceases to own the housing unit purchased in part with a grant, or a subsequently acquired housing unit which was subject to a mortgage loan that resulted in his life being insured under Veterans Mortgage Life Insurance, and becomes obligated under a mortgage loan on another housing unit occupied or to be occupied by him, the amount of the unpaid principal outstanding on the mortgage loan on the newly acquired housing unit on the date insurance hereunder is placed in effect.

(7) Where an eligible veteran incurs or refinances a mortgage loan, the amount of the incurred or refinanced mortgage loan.

(8) Where the title to a housing unit is or will be vested in an eligible veteran and his spouse, the amount of insurance shall not exceed the principal amount of the outstanding mortgage loans. If title to an undivided interest in a housing unit is or will be vested in a person other than the spouse of an eligible veteran, the amount of Veterans Mortgage Life Insurance on his life shall be computed to be such part of the total of the unpaid principal of the loan outstanding on the housing unit as is proportionate to the undivided interest of the veteran in the entire property.

§ 8a.3 Effective date.

(a) Where the grant was approved prior to August 11, 1971, Veterans Mortgage Life Insurance shall be effective August 11, 1971, if on that date, the eligible veteran was obligated under a mortgage loan, and any such eligible veteran is automatically insured, unless he elects in writing not to be insured, or fails to respond within 60 days after the date a final request is made or mailed to him for information on which his premium can be based.

(b) Where the grant is approved on or after August 11, 1971, Veterans Mort

gage Life Insurance shall be effective on the date of approval of the grant, if on that date the eligible veteran is obligated under a mortgage loan, and any such eligible veteran is automatically insured, unless he elects in writing not to be insured, or fails to respond within 60 days after the date a final request is made or mailed to him for information on which his premium can be based.

(c) In any case in which a veteran would have been eligible for Veterans Mortgage Life Insurance on August 11, 1971, or on the date of approval of his grant, whichever date is the later date, but such insurance did not become effective because he was not obligated under a mortgage loan on that date, or because he elected in writing not to be insured, or failed to timely respond to a request for information on which his premium could be based, the insurance will be effective on a date agreed upon by the veteran and the Administrator, but only if the veteran files an application in writing with the Veterans' Administration for such insurance, submits evidence that he meets the health requirements of the Administrator, together with information on which his premiums can be based, and is or becomes obligated under a mortgage loan upon the date agreed upon as the effective date of his insurance.

(d) In any case in which an eligible veteran disposes of the housing unit purchased, constructed or remodeled in part with a grant, or a subsequently acquired housing unit, and becomes obligated under a mortgage loan on another housing unit occupied or to be occupied by him, the insurance will be effective upon a date requested by the veteran and agreed to by the Administrator, but only if the eligible veteran files an application for such insurance, submits evidence that he meets the health requirements of the Administrator, furnishes information on which his premium can be based, and is or becomes obligated under a mortgage loan on the date the insurance is to become effective.

(e) In any case where an eligible veteran insured under Veterans Mortgage Life Insurance, refinances the mortgage loan which is the basis for such insurance on his life, any increase in the amount of insurance or any delay in the rate of reduction of insurance will be effective only if the eligible veteran files an application for insurance, submits evidence that he meets the health requirements of the Administrator, and

20-121-7429

furnishes information on which his premium can be based.

§ 8a.4 Coverage.

(a) Veterans Mortgage Life Insurance shall provide protection against the death of an eligible veteran insured thereunder, but only if death occurs while such insurance is in force.

(b) The $30,000 life-time maximum amount of Veterans Mortgage Life Insurance available to an eligible veteran shall be permanently reduced, and the amount of such insurance in force on his life at any one time shall be reduced simultaneously (1) with the reduction in the principal of the mortgage loan, whether or not the mortgage loan is amortized, and (2) in addition, if the mortgage loan is amortized, according to the schedule for the reduction of the principal of the mortgage loan whether or not the scheduled payments are timely made.

(c) If the amount of the mortgage loan exceeds $30,000, or the reduced maximum amount of insurance available to an eligible veteran, whichever amount is the lesser, the amount of insurance in force on the life of the veteran shall remain at a constant level until the principal amount of the mortgage loan which is basis for establishing the amount of insurance is reduced to $30,000, or to the amount of the reduced maximum amount of insurance available to the veteran, at which time the amount of insurance in force on his life shall be reduced in accordance with the schedule for the reduction of the principal of the mortgage loan, and whether or not the scheduled payments are timely made.

(d) Subject to the $30,000 life-time maximum amount of insurance, and to the reduced maximum amount of insurance available to him, an eligible veteran is entitled to be insured under Veterans Mortgage Life Insurance or to apply for such insurance as often as he becomes obligated under a mortgage loan or a refinanced mortgage loan on a housing unit or a successor housing unit owned and occupied by him. Where a veteran who is not automatically insured under Veterans Mortgage Life Insurance applies for such insurance, he shall be required to meet the health standards and other conditions established by the Administrator for such insureds.

Any amount of Veterans Mortgage Life Insurance in force on the date of death of an eligible veteran shall be paid only to the holder of the mortgage loan. If the Administrator is the holder of the mortgage loan, the insurance proceeds shall be credited to the loan indebtedness and, as appropriate, deposited in either the direct loan or the loan guaranty revolving fund established by section 1823 or 1824 of title 38, respectively. If there is more than one mortgage loan on a housing unit at the time the insurance matures, the proceeds will be payable to the holder of the mortgage loans in the order of the priority of the liens. § 8a.6 Payment of premiums.

Premiums for Veterans Mortgage Life Insurance will be established by the Administrator and based on such mortality data as appropriate to cover only the mortality cost of insuring standard lives. If the veteran is receiving compensation or other cash benefits from the Veterans Administration, the necessary premiums will be deducted from such payments. If the veteran is not receiving payments from the Veterans Administration, premiums must be paid directly by the veterans to the insurer.

§ 8a.7 Termination.

Veterans Mortgage Life Insurance shall terminate upon whichever of the following events first occurs:

(a) Satisfaction of the veteran's indebtedness under the mortgage upon which the loan is based.

(b) The veteran's 70th birthday. (c) Termination of the veteran's ownership of the property securing the mortgage.

(d) Request of the veteran.

(e) Discontinuance of payment of premiums by the veteran.

(f) Discontinuance of the entire insurance contract or agreement.

(a) The term “member” means (1) a person on active duty, active duty for training, or inactive duty training in the Uniformed Services in a commissioned, warrant, or enlisted rank or grade, or as a cadet or midshipman at the U.S. Military Academy, U.S. Naval Academy, U.S. Air Force Academy, or the U.S. Coast Guard Academy.

(2) A member, cadet, or midshipman of the Reserve Officers Training Corps while attending field training or practice cruises; and

(3) A person whose coverage is extended after termination of duty under § 9.5(a) because of length of service or under § 9.7 (a) or (b) because of disability.

(b) The term “active duty" means (1) Full-time duty in the Armed Forces, other than active duty for training;

(2) Full-time duty (other than for training purposes) as a commissioned officer of the Regular or Reserve Corps of the Public Health Service; and

(3) Full-time duty as a commissioned officer of the National Oceanic and Atmospheric Administration.

(4) Full-time duty as a cadet or midshipman at the U.S. Military Academy, U.S. Naval Academy, U.S. Air Force Academy, or the U.S. Coast Guard Academy.

(c) The term "Armed Forces" means the U.S. Army, Navy, Air Force, Marine Corps, Coast Guard and the Reserves thereof.

(d) The term "active duty for training" means (1) Full-time duty in the