TITLE IV – LIFE INSURANCE

§ 541. Definitions [Sec. 401]

For the purposes of this title [50 U.S.C. App. §§541 - 549]:

1. Policy. The term "policy" means any individual contract for whole, endowment, universal, or term life insurance (other than group term life insurance coverage), including any benefit in the nature of such insurance arising out of membership in any fraternal or beneficial association which -
   1. provides that the insurer may not -
      1. decrease the amount of coverage or require the payment of an additional amount as premiums if the insured engages in military service (except increases in premiums in individual term insurance based upon age); or
      2. limit or restrict coverage for any activity required by military service; and
   2. is in force not less than 180 days before the date of the insured's entry into military service and at the time of application under this title.
2. Premium. The term "premium" means the amount specified in an insurance policy to be paid to keep the policy in force.
3. Insured. The term "insured" means a servicemember whose life is insured under a policy.
4. Insurer. The term "insurer" includes any firm, corporation, partnership, association, or business that is chartered or authorized to provide insurance and issue contracts or policies by the laws of a State or the United States.

§ 542. Insurance rights and protections [Sec. 402]

1. Rights and protections. The rights and protections under this title [50 U.S.C. App. §§541 - 549] apply to the insured when -
   1. the insured,
   2. the insured's legal representative, or
   3. the insured's beneficiary in the case of an insured who is outside a State, applies in writing for protection under this title, unless the Secretary of Veterans Affairs determines that the insured's policy is not entitled to protection under this title.
2. Notification and application. The Secretary of Veterans Affairs shall notify the Secretary concerned of the procedures to be used to apply for the protections provided under this title. The applicant shall send the original application to the insurer and a copy to the Secretary of Veterans Affairs.
3. Limitation on amount. The total amount of life insurance coverage protection provided by this title for a servicemember may not exceed $250,000, or an amount equal to the Servicemember's Group Life Insurance maximum limit, whichever is greater, regardless of the number of policies submitted.

§ 543. Application for insurance protection [Sec. 403]

1. Application procedure. An application for protection under this title [50 U.S.C. App. §§541 – 549] shall -
   1. be in writing and signed by the insured, the insured's legal representative, or the insured's beneficiary, as the case may be;
   2. identify the policy and the insurer; and
   3. include an acknowledgement that the insured's rights under the policy are subject to and modified by the provisions of this title.
2. Additional requirements. The Secretary of Veterans Affairs may require additional information from the applicant, the insured and the insurer to determine if the policy is entitled to protection under this title.
3. Notice to the Secretary by the insurer. Upon receipt of the application of the insured, the insurer shall furnish a report concerning the policy to the Secretary of Veterans Affairs as required by regulations prescribed by the Secretary.
4. Policy modification. Upon application for protection under this title [50 U.S.C. App. §§541 – 549], the insured and the insurer shall have constructively agreed to any policy modification necessary to give this title [said sections] full force and effect.

§ 544. Policies entitled to protection and lapse of policies [Sec. 404]

1. Determination. The Secretary of Veterans Affairs shall determine whether a policy is entitled to protection under this title [50 U.S.C. App. §§541 - 549] and shall notify the insured and the insurer of that determination.
2. Lapse protection. A policy that the Secretary determines is entitled to protection under this title shall not lapse or otherwise terminate or be forfeited for the nonpayment of a premium, or interest or indebtedness on a premium, after the date on which the application for protection is received by the Secretary.
3. Time application. The protection provided by this title applies during the insured's period of military service and for a period of two years thereafter.

§ 545. Policy restrictions [Sec. 405]

1. Dividends. While a policy is protected under this title [50 U.S.C. App. §§541 - 549], 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.
2. Specific restrictions. While a policy is protected under this title, 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 title.

§ 546. Deduction of unpaid premiums [Sec. 406]

1. 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 title [50 U.S.C. App. §§541 - 549], the insurer in making settlement shall deduct from the insurance proceeds the amount of the unpaid premiums guaranteed under this title, together with interest due at the rate fixed in the policy for policy loans.
2. 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.
3. Reporting requirement. The amount deducted under this section, if any, shall be reported by the insurer to the Secretary of Veterans Affairs.

§ 547. Premiums and interest guaranteed by United States [Sec. 407]

1. Guarantee of premiums and interest by the United States.
   1. Guarantee. Payment of premiums, and interest on premiums at the rate specified in section 406 [50 U.S.C. App. §546], which become due on a policy under the protection of this title [50 U.S.C. App. §§541 – 549] is guaranteed by the United States. If the amount guaranteed is not paid to the insurer before the period of insurance protection under this title expires, the amount due shall be treated by the insurer as a policy loan on the policy.
   2. Policy termination. If, at the expiration of insurance protection under this title, the cash surrender value of a policy is less than the amount due to pay premiums and interest on premiums on the policy, the policy shall terminate. Upon such termination, the United States shall pay the insurer the difference between the amount due and the cash surrender value.
2. Recovery from insured of amounts paid by the United States.
   1. Debt payable to the United States. The amount paid by the United States to an insurer under this title shall be a debt payable to the United States by the insured on whose policy payment was made.
   2. Collection. Such amount may be collected by the United States, either as an offset from any amount due the insured by the United States or as otherwise authorized by law.
   3. Debt not dischargeable in bankruptcy. Such debt payable to the United States is not dischargeable in bankruptcy proceedings.
3. Crediting of amounts recovered. Any amounts received by the United States as repayment of debts incurred by an insured under this title shall be credited to the appropriation for the payment of claims under this title [said sections].

§ 548. Regulations [Sec. 408]

The Secretary of Veterans Affairs shall prescribe regulations for the implementation of this title [50 U.S.C. App. §§541 - 549].

§ 549. Review of findings of fact and conclusions of law [Sec. 409]

The findings of fact and conclusions of law made by the Secretary of Veterans Affairs in administering this title [50 U.S.C. App. §§541 - 549] are subject to review on appeal to the Board of Veterans' Appeals pursuant to chapter 71 of title 38, United States Code [38 U.S.C. §§7101 et seq.], and to judicial review only as provided in chapter 72 of such title [38 U.S.C. §§7251 et seq..].