Payment or use of dividends

  1. Law
  2. USC 38
  3. Veterans' Benefits
  4. GENERAL BENEFITS
  5. INSURANCE
  6. NATIONAL SERVICE LIFE INSURANCE
  7. Payment or use of dividends

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§1907. Payment or use of dividends

(a) Until and unless the Secretary has received from the insured a request or directive in writing exercising any other dividend option allowable under the insured's policy, any dividend accumulations and unpaid dividends shall be applied in payment of premiums becoming due on insurance subsequent to the date the dividend is payable after January 1, 1952.

(b) No claim by an insured for payment in cash of a special dividend declared prior to January 1, 1952, shall be processed by the Secretary unless such claim was received within six years after such dividend was declared. Whenever any claim for payment of a special dividend, the processing of which is barred by this subsection, is received by the Secretary, it shall be returned to the claimant, with a copy of this subsection, and such action shall be a complete response without further communication.

(c) The Secretary, upon application in writing made by the insured for insurance under this subsection, and without proof of good health, is authorized to apply any dividend due and payable on national service life insurance after the date of such application to purchase paid up insurance. Also, the Secretary, upon application in writing made by the insured during the one-year period beginning September 1, 1991, and without proof of good health, is authorized to apply any national service life insurance dividend credits and deposits of such insured existing at the date of the insured's application to purchase paid up insurance. After September 1, 1992, the Secretary may, from time to time, provide for further one-year periods during which insureds may purchase additional paid up insurance from existing dividend credits and deposits. Any such period for the purchase of additional paid up insurance may be allowed only if the Secretary determines in the case of any such period that it would be actuarially and administratively sound to do so. Any dividends, dividend credits, or deposits on endowment policies may be used under this subsection only to purchase additional paid up endowment insurance which matures concurrently with the basic policy. Any dividends, dividend credits, or deposits on policies (other than endowment policies) may be used under this section only to purchase additional paid up whole life insurance. The paid up insurance granted under this subsection shall be in addition to any insurance otherwise authorized under this title, or under prior provisions of law. The paid up insurance granted under this subsection shall be issued on the same terms and conditions as are contained in the standard policies of national service life insurance except (1) the premium rates for such insurance and all cash and loan values thereon shall be based on such table of mortality and rate of interest per annum as may be prescribed by the Secretary; (2) the total disability income provision authorized under section 1915 of this title may not be added to insurance issued under this section; and (3) the insurance shall include such other changes in terms and conditions as the Secretary determines to be reasonable and practicable.

( Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1149 , §707; Pub. L. 91–291, §9, June 25, 1970, 84 Stat. 331 ; Pub. L. 92–188, §2, Dec. 15, 1971, 85 Stat. 645 ; Pub. L. 97–295, §4(22), Oct. 12, 1982, 96 Stat. 1306 ; Pub. L. 99–576, title VII, §701(23), Oct. 28, 1986, 100 Stat. 3292 ; renumbered §1907 and amended Pub. L. 102–83, §§4(a)(2)(A)(iii)(I), (C)(i), (b)(1), (2)(E), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 403–406 ; Pub. L. 102–86, title II, §203, Aug. 14, 1991, 105 Stat. 416 .)

Amendments

1991-Pub. L. 102–83, §5(a), renumbered section 707 of this title as this section.

Subsec. (a). Pub. L. 102–83, §4(a)(2)(A)(iii)(I), substituted "Secretary" for "Veterans' Administration".

Subsec. (b). Pub. L. 102–83, §4(a)(2)(C)(i), substituted "by the Secretary" for "in the Veterans' Administration" in second sentence.

Pub. L. 102–83, §4(a)(2)(A)(iii)(I), substituted "Secretary" for "Veterans' Administration" in first sentence.

Subsec. (c). Pub. L. 102–86 amended subsec. (c) of this section as in effect before the redesignations made by Pub. L. 102–83, §5, by substituting "during the one-year period beginning September 1, 1991" for "before February 1, 1973" and inserting after second sentence "After September 1, 1992, the Secretary may, from time to time, provide for further one-year periods during which insureds may purchase additional paid up insurance from existing dividend credits and deposits. Any such period for the purchase of additional paid up insurance may be allowed only if the Secretary determines in the case of any such period that it would be actuarially and administratively sound to do so."

Pub. L. 102–83, §5(c)(1), substituted "1915" for "715" in cl. (2).

Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator" wherever appearing.

1986-Subsecs. (a), (c). Pub. L. 99–576 substituted "the insured's" for "his".

1982-Subsec. (c). Pub. L. 97–295 substituted "before February 1, 1973" for "within six calendar months after the effective date of this subsection".

1971-Pub. L. 92–188, §2(3), substituted "Payment or use of dividends" for "Dividends to pay premiums" as section catchline.

Subsec. (a). Pub. L. 92–188, §2(1), substituted "or directive in writing exercising any other dividend option allowable under his policy" for "in writing for payment in cash".

Subsec. (c). Pub. L. 92–188, §2(2), added subsec. (c).

1970-Pub. L. 91–291 designated existing provisions as subsec. (a) and added subsec. (b).

Effective Date of 1971 Amendment

Pub. L. 92–188, §4, Dec. 15, 1971, 85 Stat. 645 , provided that: "The amendments made by this Act [amending this section and sections 703 and 741 [now 1903 and 1941] of this title] shall take effect on a date established by the Administrator but in no event later than the first day of the first calendar month which begins more than six calendar months after the date of enactment of this Act [Dec. 15, 1971]."

Effective Date of 1970 Amendment

Amendment by Pub. L. 91–291 effective June 25, 1970, see section 14(a) of Pub. L. 91–291, set out as a note under section 1317 of this title.


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