May is. I972 M29-1.Part I\
Change 3

CONTENTS

CHAPTER 32. DISABILITY BENEFITS ON UNITED STATES GOVERNMENT

LIFE INSURANCE

PARAGRAPH PAGE

SUBCHAPTER I. TOTAL PERMANENT DISABILITY

32.01 General 32-1\
32.02 Definition of Total Permanent Disability 32-I\
32.03 Retrospective Consideration 32-I\
32.04 Statutory Disabilities 32-I\
32.05 Commencing Date of Total Permanent Disability Benefits 32-1\
32.06 Insurance **In** Force for Award Purposes 32-2\
32.07 Recovery From Total Permanent Disability 32 2

**SUBCHAPTER 2.** TOTAL DISABILITY INCOME PROVISION

32.08 General 32-3\
32.09 Definition of Total Disability 32-3\
32.10 Total Disability Income Benefits 32-3\
**32.11** Total Disability Provisions issued Prior to July **3.** 1930
**32-3\
**32.12 Total Disability Provisions Issued on or After July 3. 1930
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32.13 Statutory Disabilities 32-4\
**32.14** Related Rules 32A

SUBCHAPTER 3. EXTRA HAZARD OF MILITARY SERVICE

32.l 5 Necessity for Decision 32-5

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October 16, 1972 **M29-I.Part** I\
**Change 4**

CHAPTER 32. DISABILITY BENEFITS ON UNITED STATES GOVERNMENT LIFE
INSURANCE

SUBCHAPTER I. TOTAL PERMANENT DISABILITY

32.01 GENERAL

This benefit is an integral part of all USGLI (United States Government
Life Insurance) \[plans except the special endowment at age 96.1 It is
not a rider. It is included in policies on extended insurance and
policies exchanged for (reduced paid-up insurance. It provides monthly
income to the insured during total and permanent disability.

32.02 **DEFINITION** OF TOTAL PERMANENT DISABILITY

Any impairment of mind or body which continuously renders it impossible
for the disabled person t9 follow any substantially gainful occupation
and which is founded upon conditions which render it reasonably certain
that the total disability will continue throughout the life of the
insured.

32.03 RETROSPECTIVE CONSIDERATION

In considering such cases in retrospect, it must be remembered that
evidence must show that the insured was totally disabled before the
Lapse of insurance and that at that time the evidence was sufficient to
reasonably establish that such total disability would continue the rest
of the insured\'s life. If the permanency of the total disability cannot
reasonably be established before the lapse of the insurance, a finding
that he was permanently disabled, regardless of events subsequent to
lapse, cannot be sustained. The subsequent events may be such in point
of time or circumstances as to constitute evidence of the conditions
upon which the disability existed during the life of the policy. but
they are of no importance unless they do constitute such evidence,
because they do not of themselves condition the right of recovery under
the policy, which must depend entirely upon the conditions which existed
prior to the lapse of the insurance.

32.04 STATUTORY DISABILITIES

Contracts issued prior to December 15, 1936, provide benefits for
anatomical and functional losses (permanent loss of the use of both
feet, or both hands, or both eyes, or of one foot and one hand, or of
one hand and one eye, or of one foot and one eye, or the loss of hearing
of both ears, or the organic loss of speech, or becoming permanently
helpless or permanently bedridden). The criteria concerning statutory
disabilities as shown in paragraph 31.02 is applicable to USGLI policies
issued prior to December 15, 1936.

32.05 COMMENCING DATE OF TOTAL PERMANENT DISABILITY BENEFITS

a\. Generally, benefits commence with the date of total permanent
disability upon receipt of claim and due proof of such disability while
the insurance is in force. The insured shall be paid \$5.75 per thousand
per month during such permanent disability.

b\. Disability benefits may relate back to a date not exceeding 6 months
prior to receipt of due proof of total permanent disability. Date of
receipt of claim is the earliest possible date of due proof of claim. If
the insured was prevented from filing a claim at an earlier date due to
his mental incompetency, the date of receipt of due proof will be
determined under the rule pertaining to required proof as set forth in
paragraph 31.35. Due proof is not a factor where the total disability is
due to a statutory total and permanent disability.

c\. Insured may file claim as soon as he believes he is totally and
permanently disabled. (No waiting period).

d\. Upon approval of claim, the policy matures and the proceeds are paid
in monthly installments to the insured.

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M29-1, Part I October 16,1972

Change 4

e\. Total and permanent disability benefits continue as long as insured
remains totally **bind** permanently disabled. Such payments reduce the
face amount of insurance.

**f.** Proceeds of policy will be reduced by an indebtedness.

g\. Installments are reduced in proportion which indebtedness bears to
face **of** policy. **If** insured receives the reduced amount **of**
benefits for 240 **months,** the indebtedness is liquidated and
commencing with the 241st installment the full amount of benefits will
be paid.

h\. No limit as to age of insured when claim is made.

32.06 INSURANCE IN FORCE FOR AWARD PURPOSES

USGLI is considered in force on the date of total permanent disability
when on:

a\. A premium-paying basis (a premium credit held to the account of an
insured on the date of lapse of his insurance, sufficient to prevent
lapse, may be so used, even though the credit is in connection with
another insurance contract, unless the insured has directed that the
credit be used for another purpose);

b\. A paid-up Basis;

c\. A waiver of premiums by virtue of a previous finding of total
disability under the total disability provisions if attached to the
contract;

d\. A waiver of premium basis under section 306, World War Veterans\'
Act of 1924, as amended;

e\. Extended insurance basis;

f\. Where the insurance, or any part thereof, is revived under section
305, World War Veterans\' Act of 1924, as amended; **or**

g\. Where the insurance is on a waiver of premium basis under 38 U.S.C.
\~24, provided the insured under a permanent plan policy has paid that
portion of the premium not required for the pure insurance risk. -

32.07 RECOVERY FROM TOTAL PERMANENT DISABILITY

a\. If the insured recovers from total permanent disability before 240
installments have been paid or if the insured fails to furnish proof of
continuous total permanent disability upon request of VA, all income and
waiver benefits cease and the policy may be continued at a reduced
amount of insurance.

b\. Reduced amount of insurance is the commuted value of remaining
installments (240 less number paid).

c\. Premium payments are reduced in proportion to the reduced amount of
policy.

d\. If subsequent claim for total permanent disability is approved, the
amount of monthly benefits will be the same as those paid originally,
unless insured has voluntarily requested further reduction.

e\. If the insured recovers from total permanent disability after having
received a total of 240 or more monthly installments, **no** further
benefits will accrue either to the insured or to the beneficiaries.

f\. If the insured reduces the amount of insurance which is available
upon recovery, benefits will be in the direct proportion that the
commuted value of the remaining unpaid installments bears to the amount
of insurance so retained. Premiums will be reduced accordingly.

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August 31,\'I97I M29-1, Part 1\
Change 2

SUBCHAPTER 2. TOTAL DISABILITY INCOME PROVISION

32.08 GENERAL

**Iii** addition to **the** total permanent disability income provided
in all USGLI policies, **a disability** income provision may be added to
the policies to provide income to the insured who becomes totally
disabled (not total permanent) or to increase the income of the insured
who becomes totally and permanently disabled. The provision is generally
referred to as a rider.

32.09 DEFINITION OF TOTAL DISABILITY

a\. Total disability is any impairment of mind or body which
continuously renders it impossible for the disabled person to follow any
substantially gainful occupation.

b\. **The** applicable rules concerning the determination of total
disability under NSLI are applicable to the determination of total
disability under the total disability income provision attached to USGLI
(except for the period of time requirement).

**32.10** TOTAL DISABILITY **INCOME BENEFITS**

a\. Monthly income benefits of \$5.75 for each \$1,000 of insurance on
which extra premium has been paid. Monthly income will be paid as long
as insured remains totally disabled.

b\. Premiums are waived on basic policy and rider. The policy (basic)
will participate in dividends, if earned, even though the premiums are
being waived under a total disability award.

c\. Unlike income paid on account of total permanent disability,
payments for total disability do not reduce the face of the policy.

d\. Monthly payments will be made concurrent with total permanent
disability income payments if there is also a finding of total permanent
disability.

**e.** If an insured is receiving total and permanent as well as total
disability income benefits under an endowment policy and rider and the
endowment period ends, he has the right of election to take the
endowment **or** continue to receive total and permanent disability
benefits. If insurance settlement is made under the endowment benefits
the total permanent disability payments stop. The amount of payment
under the endowment benefits will be the commuted value of the unpaid
guaranteed installments (240 minus the number of installments paid).
Payments on the TDIP (Total Disability Income Provision) will continue
as long as the insured remains totally disabled. Upon recovery, the TDIP
terminates and may not thereafter be reinstated.

f\. The total disability must occur before default in premium.

32.11 TOTAL DISABILITY PROVISIONS ISSUED PRIOR TO JULY 3, 1930

a\. These riders provided for:

\(1\) One-year waiting period.

**(2)** Payments date back to beginning of total disability.

\(3\) No age limit as to date **of** disability.

\(4\) All premiums paid during waiting period will be refunded, and all
premiums waived thereafter during continuance of total disability.

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M29-l, Part-t I August 31,1971

Change **2**

**(5) Any** installments due the insured and not paid during his
lifetime will be paid to the beneficiary.

\(6\) Due proof is not a factor.

32.12 TOTAL DISABILITY PROVISIONS ISSUED ON OR AFTER JULY 3, I930

a\. These riders provide for:

**(1)** Four-month waiting period.

\(2\) Payments become effective as **of** the first day of the fifth
consecutive month of total disability **(not** calendar month). Example:
Total disability occurred January 17: benefits begin May 17, not May l.

**(3) Any** payments due the insured and not paid in his lifetime will
be paid to the beneficiary.

\(4\) Total disability must commence prior to the 65th birthday and
**a** 4-month period of continuous total disability must elapse before
benefits commence.

\(5\) Payments may relate back 6 months prior to receipt of proof of
disability but not prior **to** the first day of the fifth month of
total disability. Waiver of all premiums begins with premium falling due
after income begins.

\(6\) If the payment of benefits would be limited by application of the
due proof rule and the insured was prevented from timely filing claim
because of mental incompetency, then the date of receipt of due proof
will be determined on the basis of the rule set forth in paragraph
**31.35** concerning required proof under National Service Life
Insurance.

\(7\) Due proof must be submitted before default in payment of a premium
or within l year from due date of premium **in** default.

\(8\) Premiums paid during the 4-month waiting period are not
refundable.

\(9\) Any premiums paid after the **monthly** income becomes payable
will be refundable to insured if living, otherwise to the beneficiary,
without interest.

(l0) Where the insured becomes totally disabled and it has been
determined that his failure to file claim during his lifetime was due to
circumstances beyond his control and claim and due proof are filed by
the beneficiary within l year after the date of death, the monthly
income payments, except as otherwise provided in statutory cases, may
relate back to a date not exceeding 6 months prior to the date of death
of the insured.

32.13 STATUTORY DISABILITIES

a\. Total disability riders issued prior to December 15, 1936, (since
that date this provision **not** included) construe as total disability
the loss of use of both feet, or both hands, or both eyes, or of one
foot and one eye.

**or** of one hand and **one** eye, or of one foot and one hand, or of
the organic loss of speech, or the loss of hearing of both ears, **or**
becoming permanently helpless or permanently bedridden (refers only to
riders issued on or after July 3, 1930, and prior to December 15, l936).

b\. Benefits payable because of the above losses begin the first day of
the fifth consecutive month after such losses occur.

32.14 RELATED RULES

**The** rules as set forth under National Service Life Insurance
pertaining to the necessity for claims, findings of competency and
fraud, and extra hazard determinations are applicable to USGLI\]

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May\' 15,1972 M29- 1• Part l\
**Change 3**

SUBCHAPTER 3. EXTRA HAZARD OF MILITARY SERVICE

32.15 NECESSITY FOR DECISION

**a. Whenever benefits under USGLI become payable because of total
permanent disability of the insured or because of the death of the
insured as a result of disease or injury traceable to the extra hazard
of military service, there is transferred from the military and naval
insurance appropriation to the USGLI fund a sum which, together with the
policy reserve at maturity, will equal the then value of the benefits.
If the insured, receiving total permanent disability denefits, recovers
and has the right to continue a reduced amount of insurance, there will
be transferred to the military and naval insurance appropriation all of
the loss reserve to the credit of such policy claim except a sum
sufficient to cover the reserve on the reduced amount of insurance.**

b Whenever benefits under the total disability provision become payable
because of total disability of the unsured as a result of disease or
injury traceable to the extra hazard of military service, there is
transferred from the military and naval insurance appropriation to the
USGLI fund, from time to time, any amounts which become, or have become,
payable to the insured on account of such total disability. There shall
be transferred from the USGLI fund to the military and naval insurance
appropriation the amount of the reserve held on account of the total
disability benefit. When the insured recovers and is entitled to
continue protection under the total disability provision, there shall be
transferred to the USGLI fund a sum sufficient to set up the then
required reserve on such total disability benefits.

c.When insurance benefits are awarded for the total permanent disability
of the insured, or for death of the insured, or TDIP benefits are
awarded for total disability of the insured, a determination must be
made as to whether the injury or disease involved is traceable to the
extra hazard of military service. Insurance.

d\. The rules on extra hazard as provided in chapter 31, subchapter7,
paragraph 31.473e, apply to [USGLI]{.underline} (K) policies also.}

482 •:ii\~ II5\~I

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