July-August - Air Defense Artillery

WHAT SHALL , DO WITH MY
GOVERNMENT INSURANCE?
By Major Kenneth F. Hanst, Jr., Retired,
THAT is the question from every post
and outpost, referring both to U. S.
Government Life Insurance-USGLIand
National Service Life Insurance-
NSLI. The Army Mutual Aid Association
has been happy to aid members in
arriving at the proper answer in their
individual cases.
Vlhile we cannot give here the approved
solution to fit all cases, because of
the different personal factors, we can
give a definite recommendation to most
servicemen and some pertinent advice
and pointers to those who have borderline
cases. First, let us review the salient
features of the Serviceman's Indemnity
and Insurance Acts of 1951.
The Indemnity Act provides that all
members of the Armed Services on active
duty, including cadets and midshipmen
at the service academies and the National
Guard and Reserve on duty for 14
days or more, are insured automatically
against death in the amount of $10,000
without cost to the servicemen. This
gratuitous coverage of $10,000 will be
decreased by any amount of NSLI or
USGLI in force. Every person on active
duty has a government insurance of
$10,000, but no more. The gratuitous
insurance extends 120 days after separation
from the service.
Beneficiaries may be named by the
insured and changed at will so long as
they are members of his immediate family,
and he may specify what proportion
Major Kenneth F. Hanst, Jr., graduated
from USMA in 1942; served with the 28th Infantry
Division in 1943 and 1944. In November,
1944, while commanding a rille company
in the Hurtgen Forest he was severely
wounded by artillery fire, in which action he
was awarded the bronze star medal for valor.
He retired from the Army in 1947 and is now
Secretary of the Army Mutual Aid Association.
JULY-AUGUST, 1951
and the Journal Staff
of the indemnity is to be payable to each,
if more than one is named. If no designation
of beneficiary is made, the indemnity
will be paid to the first eligible beneficiary
in the order of spouse, children,
parents, and brothers and sisters.
If the insured dies, the payments must
be made in equal monthly installments
over a period of ten years. There are no
options. Where the gratuitous insurance
is $10,000 the monthly payments amount
to $92.90.
For those leaving the service with service-incurred
disabilities because of which
they are not insurable according to Veterans
Administration standards for National
Service Life Insurance, a new
category of permanent insurance will be
available, and it will include waiver of
premiums for total disability, but no payments
during the life of the insured.
This insurance will be similar to standard
NSLI policies, except that it will be
non-participating, the monthly cost will
be slightly higher under the new tables,
and likewise the optional annuity settlements
will be less favorable.
All others who have had the gratuitous
insurance and who are separated from
active sen'ice will be eligible without
medical examination for a new type of
five-year, level premium, renewable term
insurance upon leaving the service. This
new term insurance will not be convertible
to a permanent plan.
THE 1951 Acts establish definite
benefits for those in the service who now
hold policies of NSLI or USGLI. Premiums
for term policies will be waived
during the period of active service if the
insured makes application to the Veterans
Administration. Policies of permanent
types of insurance may be surren-
dered for their cash value, in order that
the insured may take advantage of the
free coverage, and then later reinstated,
contrary to previous practice which did
not allow reinstatement of policies which
had been surrendered for their cash
value; or the insured may request waiver
of that portion of his present premiums
which the Veterans Administration determines
to be applicable to the "pure
insurance risk," figures for which are
not yet available. In the latter case, the
insured would continue to pay the balance
of the premium while in active
service and would resume paying his
present premiums after leaving the serv-
Ice.
Waiver of premiums for Total Disability
Income Provisions is not authorized.
Such premiums must be paid if the provisions
are to remain in force. Such insurance
lapses with cash surrender.
No dividends are payable during the
period in which waiver of premiums is
in effect whether for term or permanent
type policies.
ANALYSIS
TERM Insurance holders have the options,
1) to request the waiver of premiums,
or 2) to continue NSLI term
premiums in effect. The second option
offers no advantages whatever. The
holder gains no advantages for paying
the premiums, and if his separation from
the service occurs after the end of the
five-year term, evidence of good health is
required to obtain a new NSLI term
policy.
. If waiver of premiums is requested,
the holder gets his insurance free; when
the term expires it is automatically renewed
for five years more and continued
free. He also retains the great advan-
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