Life Insurance for Veterans - Direct Payments for Insurance

To provide direct insurance payments, including advance payments disbursed as loans, to Veterans and their beneficiaries for claims based on death or other qualifying circumstances. Payments may be authorized for United States Government Life Insuran

Veterans' Life Insurance (VALife) is the only currently open Life Insurance Program for Service-connected Disabled Veterans. Also offered is Veterans Mortgage Life Insurance for Veterans who have qualified for a Specially Adapted Housing Grant.

Veterans currently insured under USGLI, NSLI, or VMLI. Payment cannot be made if it causes the insurance proceeds to revert back to a State (as in cases where there are no permissible heirs to pay). 38 U.S.C. 1950; 38 U.S.C. 1917(d).

Payment may be made on a claim to a designated beneficiary, a representative of the estate, a minor or incompetent, or another designee filing for benefits. 38 U.S.C. 1917. A beneficiary may assign all or a portion of his or her share of the insurance to a restricted class of the insured's relatives. 38 U.S.C. 1918(b). Payments may also be made to the policyholder for loan or dividend amounts. 38 CFR 8.11(b); 38 CFR 6.14; 38 CFR 8.10; 38 CFR 6.11.

The funds used to pay insurance proceeds will be discussed below in the "Award Procedure (093)" section. Life insurance settlement is payable upon death of the insured, or the insured may surrender a permanent plan policy for cash. 38 U.S.C. 1917; 38 U.S.C. 1951; 38 CFR 8.11(b); 38 CFR 6.14. The insured may also be granted a loan for up to 94 percent of the cash surrender value of a permanent plan policy. 38 CFR 8.13; 38 CFR 6.13. Interest on United States Government Life Insurance (WWI) policy loans is charged at the rate of 5 percent per annum. 38 U.S.C. 1944. Interest is charged at a variable annual rate for NSLI. 38 CFR 8.13. The variable rate equals the yield on the Ten-Year Constant Maturities Index for U.S. Treasury securities for the month of June of each year rounded down to the next whole percentage. 38 CFR 8.13(c). This loan rate is effective from the first day of October of each year and will not exceed 12 percent or be lower than 5 percent per annum. 38 CFR 8.13(d). The face amount of the policy, less any indebtedness on the policy, is payable to the designated beneficiary upon the insured's death under a regular life policy, and only to the mortgage holder under VMLI coverage. 38 U.S.C. 1917(a); 38 U.S.C. 2106(e). Other direct payments may include dividend cash option payments or other payments as authorized. 38 CFR 8.10; 38 CFR 6.11.

Direct Insurance payments can be directly deposited into a claimant's account. Claimants must provide their checking or savings deposit account number as well as their social security numbers. Claimants must also provide the name, address, phone number, and routing transit number for their financial institutions. If the award check is to be mailed to the claimant's bank account, the account number and type of account (checking or savings) must be shown on the claim in addition to the name and address of the bank. USGLI proceeds are paid from the USGLI fund. 38 U.S.C. 1955(a). Under 38 CFR part 8, four distinct life insurance programs exist, namely, NSLI, Veterans Special Life Insurance (VSLI, 38 U.S.C. 1923), Veterans Reopened Insurance (VRI, 38 U.S.C. 1925), and Service-Disabled Veterans Insurance (S-DVI, 38 U.S.C. 1922). NSLI proceeds are paid from the NSLI fund. 38 U.S.C. 1920(a). VSLI proceeds are paid from the VSLI fund. 38 U.S.C. 1923(a). VRI proceeds are paid from the VRI fund. 38 U.S.C. 1925(d)(1). S-DVI proceeds are paid from the fund established at 38 U.S.C. 1922(a)(4). VMLI proceeds are paid from the "Veterans Insurance and Indemnities" appropriations account. 38 U.S.C. 2106(d))(1).

Contact the headquarters or regional location, as appropriate for application deadlines.

Most death awards are authorized by the Insurance Center within 10 days of receipt of the documents needed for payment.

In the event of a denial or disagreement, a notification letter will advise of applicable review/appeal options, associated filing requirements and time limits.