October 16, 1972 M29-1 ,Part 1\
Change 4

. CONTENTS\
CHAPTER 14. RH INSURANCE (38 U.S.C. 722(a))\
PARAGRAPH PAGE\
14.01 General (38 U.S.C. 722(a)) 14-1\
14.02 Eligibility 14-1\
14.03 Definition of Types of Duty in Military Service 14-2\
l4.04 Requirements 14-3\
l4.05 Effective Date l4-5\
l4.06 Amount of Insurance l4-6\
14.07 Statutory Disability Insurance 14-7\
14.08 Applications Submitted From Military Hospitals 14-7\
14.09 Terms and Conditions of Insurance Contracts Issued Under 38 U.S.C.
722(a) 14-7\
14.10 Beneficiary and Option Selections 14-8

14.11 Continuing Waiver of Premiums Under 38 U.S.C. 712 or 748 on
Insurance\
Previously Issued or Evidence Indicates Possible Entitlement to\
Waiver of Premiums But No Request for Waiver Is of Record 14-8

14\. l 2 Issue of Endowment Plan Applicant Totally Disabled 14-8\
14.1 3 Notification To Veteran of Possible Eligibility for RH Insurance
14-8\
14.14 Rules on Transfer of Records Upon Receipt of Application for RH
Insurance 14-9

14-i

M29-l, Part **I** December **22, 1978**

Change 8

However, when a veteran has received **a** dishonorable discharge for
his or her last period of service but **had** prior **service that**
terminated after April 25, 1951, under other than dishonorable
conditions and the **disability occurred** during that period,
eligibility for RH insurance **may** be established for that period of
**service.** The determination as to whether the **character** of
discharge **is** one outlined in VA Regulation 1104, **will be made by**
the rating **board** when such board **determines eligibility for**
compensation. The determination of the rating board **will be accepted
by** the Insurance Division unless it is obvious that **a clear** and
**unmistakable** error has been **made** or new **evidence** is
**introduced.** In either **of these** events, the **matter** should be
brought to the attention of **the appropriate** ad**judicating
activity.**

**f.** Any person within the classes defined in **subparagraph a** above
who, while enroute to or from, or at, **a place** for **final
acceptance** or entry upon active **duty, suffers** an **injury or**
disease resulting in **disability, must file** application within 1 year
**after incurrence** of the **disability.**

g\. Forfeiture of compensation benefits for fraud will not be a bar to
issuance of RH insurance to an otherwise qualified applicant. When it is
determined that a case should be considered, it will be forwarded to the
\[Chief, Insurance Program Management Division (290),\] for a final
decision.

**l4.03** DEFINITION OF TYPES OF DUTY IN **MILITARY SERVICE**

**a.** \"Active duty\" means:

\(l\) Full-time duty performed by a member of a uniformed service in the
active military or naval service,

other than active duty for training.

\(2\) Full-time duty as a commissioned officer in \[NOAA (National
Oceanic and Atmospheric Administration) or its ,\] the Coast and
Geodetic Survey, or in the Regular Corps of the Public Health Service,
or in the Predecessor Reserve Corps of the Public Health Service (other
than for training purposes).

\(3\) Service as a cadet at the United States Military, Air Force, or
Coast Guard Academy, or as a midshipman at the United States Naval
Academy.

\(4\) Authorized travel to or from **such duty** or **service.**

b\. \"Active duty for training\" **means:**

\(I\) Full-time duty performed by a member of a Reserve component of a
uniformed service in the active military or naval service of the United
States for training programs.

\(2\) Full-time duty **as a** commissioned officer in the Reserve Corps
of the **Public** Health Service for training **purposes.**

\(3\) Annual training duty performed for **a** period of 14 **days or
more by a** member **of** the Reserve Officers\' Training Corps, the
Naval Reserve **Officers\'** Training Corps, or the Air **Force**
Reserve Officers\' Training Corps.

\(4\) Authorized travel to or from **such duty. The term does** not
include **duty** performed as **a** temporary member of the Coast Guard
Reserve.

**c.** *\"Inactive duty training\"* means **any of** the training,
instructions, duty, appropriate **duties,** or **equivalent** training,
instruction, **duty, appropriate duties,** or **hazardous** duty,
**performed with or** without compensation by **a** member of a Reserve
component of **a** uniformed service, prescribed by the **appropriate
secretary pursuant to** section 501 of the Career Compensation Act of
1949, or any other provision of **law.** The term does not **include:**

**(l)** Work or study performed by **a member of a Reserve component**
of **a** uniformed **service** in connection with correspondence courses
at the Army, Navy, Air Force, Marine Corps, Coast Guard, or **Public**
Health **Service.**

14-2

**December** 22,1978 M29-1, Part 1\
Change 8

CHAPTER 14. RH INSURANCE

14.01 GENERAL (38 U.S.C. 722(a))

a\. RH life insurance is available to persons released from active duty
with the military service on or after April 25, 1951, under other than
dishonorable conditions, with service-connected disability or
disabilities for which compensation would be payable if 10 percent or
more in degree, and except for which such persons would be insurable
according to the standards of good health established by the
Administrator.

b\. The applicant must submit an application for the insurance, together
with satisfactory proof of his or her insurability, except for
service-connected disability, according to the standards of good health
established by the Administrator.

**c.** Service-connected disability even though evaluated at less than
10 percent (including zero percent), will not make the applicant
ineligible if all other requirements are met. The exceptions to this
rule are:

\(1\) Service-connected disability for a dental condition that was made
for a dental claim is not qualifying since such ratings are always less
than 10 percent and no compensation is payable. Ratings pertaining to
injury which involve dentures are based on the injury and are not
considered as dental ratings.

\(2\) Under 38 U.S.C. 602, any veteran who develops an active psychosis
within 2 years after his or her discharge or release from military
service during or immediately following a period in which the United
States is engaged in combat will be granted service-connected
disability. This disability makes the veteran eligible for hospital and
medical care only. The veteran is not eligible for RH insurance on this
rating alone.

14.02 ELIGIBILITY

a\. Registrants under the Selective Service Act of 1948, as amended, and
persons provisionally accepted for active duty on or after June 27,
**1950,** who were ordered to report to a designated place for induction
into the active service and who incurred a disability while enroute to
suds place, are eligible to apply for RH insurance notwithstanding that,
even if the disability exceeded 10 percent, no compensation would be
payable. Application for the insurance must be filed by such persons
within 1 year after the incurrence of disability under these conditions.

b\. Commissioned officers of the Public Health Service who are deemed to
be in the active military service under the provisions of Public Law
881, 84th Congress (but not entitled to protection under the
Servicemen\'s indemnity Act of 1951, as amended) are considered to have
been in the active service on or after July 4,1952, and prior to January
1, 1957, for the purpose of applying for RH insurance if they were
separated during that period and **file** application for insurance on
or after January 1, 1957.

**c.** Commissioned officers of \[NOAA (National Oceanic and Atmospheric
Administration), or its predecessor,\] the Coast and Geodetic Survey,
who are deemed to be in the active military service under the provisions
of Public Law 881, 84th Congress (but not entitled to protection under
the Servicemen\'s indemnity Act of 1951, as amended), are considered to
have been in the active service on or after July 29, 1954, and prior to
January 1, 1957, for the purpose of applying for RH insurance if they
were separated on or after April 25, 1951, and prior to January 1, 1957,
and file application for insurance on or after January 1, 1957.

d\. A person who, while serving in the National Guard on temporary duty,
suffers a disability which is subsequently rated as service-connected is
eligible to apply for RH insurance.

e\. Since discharge under other than dishonorable conditions is a
requirement for eligibility under 38 U.S.C. 722(a) usually any
application received indicating a dishonorable discharge will be
immediately disapproved and the applicant advised as to the reason. When
the applicant did not receive a dishonorable discharge but was
discharged under dishonorable conditions as set forth in VA Regulation
1012, the insurance will not be granted.

14-1

M29-1, Part 1 l December 22, 1978

Change 8

\(3\) When an application for waiver of premiums for an amount of
insurance greater than that of record (or when the amount is left blank)
is submitted within the 1-year period, the claim for waiver of premiums
will be considered as an informal application for RH insurance. A period
of 31 or 60 days from the date of the letter of notification will be
allowed for meeting any necessary additional requirements.

\(4\) Application for RH insurance must be submitted within l year.
Prior to March 4,1969, the 1-year period started with the date the VA
Form 21-6796, Rating Decision, was signed. On and after March 4, 1969,
the 1-year period begins with the date of the notice by the VA initially
granting service connection for disability. It is emphasized that the
year commences with the date of the notice and not the receipt of the
notice. When the veteran does not apply for compensation and the first
notification is released by the Insurance Division, the 1-year period
will begin with the date of the notification. If a copy of the award
letter, or the award letter date is not furnished by the regional
office, the date will be determined by subtracting 3 days from the date
the rating decision was received in the insurance office. If the final
date of the l-year period falls on a Saturday, Sunday or legal holiday,
the 1-year period is extended to include the next workday. The exception
to this rule is: If an applicant is shown by evidence satisfactory to
the Administrator to have been mentally incompetent during any part of
the 1-year period, application for RH insurance may be filed within 1
year after \[the appointment of a legal\] guardian or within 1 year
after the date of rating removing suds disability as determined by the
Administrator, whichever is the earlier date. If \[the legal\] guardian
is discharged during the 1-year period and later a new \[legal\]
guardian is appointed, the new \[legal\] guardian will have 1 year from
the date of the appointment to file the application.

**(5) \[ \]** If the applicant \[is\] mentally incompetent, application
\[has\] to be submitted by a \[legal\] guardian, and if required under
the State law, after the court shall have authorized the fiduciary to
make such application. \[l

\(6\) An application submitted by a \[legal\] guardian should be
accompanied by VA Form 27-555, Certificate of Legal Capacity to Receive
and Disburse Benefits, executed by the \[Veterans Services Officer\] of
the regional office having jurisdiction, and indicating that the signer
of the application has been duly appointed as \[legal\] guardian and
whether court approval is required by State law. When VA Form 27-555
giving the required information is not attached, and the application
does not bear a notation by the \[Veterans Services Officer\] to the
effect that VA Form 27-555 has previously been furnished, VA Form
29-505, Request for Information \[ l or a letter will be addressed to
the \[Veterans Services Officer\] of the regional office of jurisdiction
requesting that VA Form **27-555** be forwarded.

NOTE.\' An application for RH Insurance which required court approval
will be considered acceptable even though the court approval is
subsequent to the time limit prescribed for submission of such
application, provided all other requirements arc met. The court
approval, when received, will be considered supplemental to the
application.

\(7\) When completing Part II, Statement of Applicant, on the
application (VA Form 29-4364) \[ \] for an incompetent veteran, the
legal\] guardian should enter any information he or she has knowledge of
and sign himself or herself as the veteran\'s legal guardian in the
space provided for the signature of the applicant, identifying
himself/herself as the legal guardian. \[ \]

**\[**

\(8\) If a \[legal\] guardian has not been appointed, the incompetent
veteran may submit an application, if he or she possesses sufficient
mental capacity to express a desire to apply for RH insurance and
understands the nature of his or her act. However, such application
should be accompanied by a statement from a member of the medical staff
of the institution having custody of the incompetent veteran to the
effect that the veteran has sufficient mental capacity and was willing
to sign the application. If the applicant is mentally incompetent, but
no guardian has been appointed and the applicant is not confined to an
institution (trial visit, etc.), certification as to testamentary
capacity should be made by \[a licensed\] physician.

NOTE. Under the same situation as stated in paragraph (4) above, if a
legal guardian has been appointed and the veteran signs the application,
the (Legal\] guardian must sign also.

14-4

December 22,1978 M29-1, Part 1\
Change 8

\(2\) Attendance at an educational institution in an inactive status
under the sponsorship of the **Army,** Navy, Air Force, Marine Corps,
Coast Guard, or Public Health **Service.**

\(3\) Duty performed as a **temporary member** of the Coast Guard
**Reserve.**

**d.** On and after January 1, 1957, as defined in section 102 of Public
Law 881, 84th Congress, a **\"member** of **a** uniformed **service\"**
is a person appointed, enlisted, or **inducted** in a component of the
Army, Navy, Air **Force,** Marine Corps, or Coast Guard (including a
**Reserve** component of a uniformed **service),** or in one of these
services without specification of component, or as a **commissioned
officer** of NOAA (National **Oceanic and Atmospheric** Administration)
or its **Predecessor,** the Coast **and Geodetic Survey, or** the
Regular or **Reserve Corps** of the Public Health **Service,** and any
**person serving** in the **Army or** Air **Force under call or
conscription. The term includes** the following:

\(1\) A **retired member** of any of these services.

\(2\) A member of the Fleet **Reserve or** Fleet Marine Corps Reserve.

\(3\) A cadet at the United States Military **Academy,** the United
**States** Coast Guard Academy, the United States Air Force Academy, or
**a** midshipman at the United **States** Naval **Academy.**

\(4\) A **member** of the Reserve Officers\' Training Corps, or the Air
Force **Reserve Officers\'** Training Corps, when **ordered to** annual
training duty for 14 days or **more, and** while performing authorized
travel to and from that duty.

\(5\) Any person, while en route to or from, or at, **a** place for
final **acceptance** or for **entry** upon active duty in military or
naval **service, who has** been provisionally **accepted** for such duty
or who, under the Universal Military Training and Service Act, has been
**selected** for active military or naval **service** and has been
**ordered or directed** to **proceed** to such **place.**

\(6\) The term does not include a temporary **member** of the Coast
Guard Reserve.

**e. The** term \"Reserve component of a uniformed service\" includes
the Army **Reserve,** the Naval **Reserve, the Marine Corps Reserve,**
the Air Force Reserve, **the** Coast Guard **Reserve,** the **Reserve
Corps** of the Public Health

**Service,** the National Guard of the United States, and the Air
National Guard of the United States. A **member** of the National
**Guard** or **the Air** National Guard of the **several States,
Territories,** or the District of Columbia, when performing training or
duty under sections 92,94,97,99, or 113 of the National Defense Act of
June 3, 1916, as **amended,** shall, for the purpose of benefits
**provided** by Public Law 881, 84th Congress, be **considered** a
**member** of a **Reserve component** of a uniformed **service, and**
training or duty **performed** by **a member** under these sections of
the act shall be **considered** *\"active duty for training* **or**
*inactive duty training\"* as appropriate.

14.04 REQUIREMENTS

a\. Applications

\(1\) Application for RH insurance should be **made, whenever
practicable,** on VA Form 29-4364, Application for National **Service
Life Insurance (RH). \[However, previous editions** of VA Form 29-4364,
Application for National **Service** Life Insurance (RH) **(Medical)**
and VA Form 29-4364a, Application for National **Service** Life
Insurance (RH) **(Nonmedical),** will be **considered** as valid
application, if timely submitted.\] A statement over **the** signature
of the applicant giving the necessary information \[will also\] be
**considered.**

\(2\) The application must be signed by the applicant and submitted
before the expiration of the statutory time limit. (If the application
is **dated more** than 1 year **prior** to its postmark **date,** it
will be **disapproved** and the **veteran so** advised. The veteran will
be given the opportunity to **reapply** and advised that the new
application must be submitted within the 1-year **period** of
eligibility or 31 **days,** whichever is the latest date. If the
original application was not submitted within the **1-year period** of
eligibility, it should be disapproved for that reason.\]

14-3

Services Officer\] of the regional office of jurisdiction requesting
that VA Form *27-555* be **forwarded.** NOTE. An application for RH
insurance which required court approval will be considered acceptable
even though the court approval is subsequent to the time limit
prescribed for submission of such application, pro**vided** all other
requirements are met. The court approval, when received, will be
considered supplemental to the application.

\(7\) When completing Part 11, Statement of Applicant, on the
application (VA Form 29A364) for an incompetent veteran, the \[legal\]
guardian should enter any information he or she has knowledge of and
sign in the space **provided** for the signature of the applicant,
identifying himself or herself as the veteran\'s \[legal\] guardian.\[

\(8\) If a (legal\] guardian has not been appointed, the incompetent
veteran may submit an application, if he or she possesses sufficient
mental capacity to express a desire to apply for RH insurance and
understands the nature of his or her act. However, such application
should be accompanied by a statement from a member of the medical staff
of the institution having custody of the incompetent veteran to the
effect that the veteran has sufficient mental capacity and was willing
to sign the application. If the applicant is mentally incompetent, but
no guardian has been appointed and the applicant is not confined to an
institution (trial visit, etc.), certification as to testamentary
capacity should be made by \[a licensed\] physician.

NOTE: Under the same situation as stated in subparagraph (4) above, if a
\[legal\] guardian has been appointed and the veteran signs the
application, the \[legal\] guardian must sign also.

14-4

M29-1, Part I Advance Manual Change No. 8-84 October 2, 1984

Chapter 14. RH Insurance \[38 **U.S.C.** 722(a)

A. Change: M29-1, Part I, Chapter 14. This advance manual change is
issued in conjunction with Advance Manual Change No. 1-84 in 1429-1,
Part **IV.** This change amends the policy guidelines for processing
applications for Service-Disabled Veterans? Insurance (RH) which are
submitted prior to the applicant\'s release from active duty with the
military service. Applications from in-service personnel will no longer
be disapproved upon receipt.

13\. Procedure: Page 14-5, delete subparagraph 14.04a(9) and the
exception following the subparagraph,

and insert the following:

\(9\) When an application is received from an individual who is still on
active duty, the applicant should be advised that to be eligible for RH
insurance, he or she must be separated from service. The applicant
should be told to notify us as soon as be or she has been released from
active duty. The procedures to follow in processing such applications
are contained in M29-1, Part **IV,** paragraph 1.05e(8), Advance Manual
Change No. 1-84.

C. New or Revised Insurance Forms: VA Form Letter 29-729 will no longer
be used.

ROBERT W. CAREY Assistant Director for Insurance

DISTRIBUTION:

335/29 85 310/290 50 310/291137 310/Library 1 203/SDA *2* CO/311D *2*

M29-1 Part 1 Advance Manual Change No. 2-80 November 3, 1980

A. Issue Affected: M9-1, Part I, Chapter 1.

B. Purpose: To add certain paragraphs to establish procedures involving
applications for RH Insurance. C. Text: Page 14.5 - Add the following
sentence to Paragraph 14,04b after the word \"premium: \"Where the
applicant does not state the plan **desired and/or** remits an incorrect
premium, term insurance may be Issued in certain circumstances (See
M29-1, Part IV, Par. 1.05),

D, New or Revised Insurance Forms: None

October 1,1973 M29-l, Part I\
Change 5

\(9\) If Part **III,** Physical Examination Report, is missing,
incomplete, or is not **mailed** within 31 days of the **physical**
examination, **or** the applicant requires **a** supplemental
examination, the application will not be **disapproved; instead,** a
**review** of previous records **(claims** folder, **prior reports** or
physical examinations, **etc.)** will be **utilized** to determine if
the applicant qualifies for RH insurance.

14-1a

M29-I, Part I December 22, 1978

Change 8

**from this 6-month** rule. When the insurance under this section is
granted with a retroactive effective **date, the total** disability must
exist for 6 or **more** months from the **premium due date** in the
month in which application **is made.**

**14.05** EFFECTIVE DATE

a\. Generally, RH insurance will be **made effective, unless** the
insured requests otherwise, on the **date all re**quirements are
**met.** This means the submission of both application **and money. If**
within the time limits set by law a veteran submits an application, then
later the **premium, the** insurance will be effective as of the
**date** the **money is received.** If supplemental information is
**required** and submitted within the **I-year** eligibility period, the
effective date will be the **date** the application or \[ \] the money
was submitted, whichever is later.

b\. Under 38 U.S.C. 722(a), a definite time limit for submitting an
application has been established. If the applicant submits an incomplete
application or does not remit the **premium** for the insurance within
the **estab**lished time **period,** he or she will be allowed 31 days
to furnish supplemental information or 15 days to remit the **premium.
In** such cases, the effective date of the insurance is the date of the
incomplete application and not the date the supplemental information or
money is received. The effective date of an RH policy cannot be later
than the last day in the eligibility period. A health certification is
not **needed** for the supplemental information.

**c.** The effective **date** of RH insurance **shall** not be
established prior to the date of entry of the applicant into active
service.

**d.** The effective **date may** \[not\] be **prior** to the date of
discharge if all other requirements are met.

**c.** When an application and the required premium for insurance are
submitted to the VA within the **I-year** period, the effective **date**
of the insurance **may** be established as follows:

\(I\) As of the first **day** of **the month** in which **valid**
application and tender of **premiums are made.**

\(2\) As of the first day of the month following the month in which
valid application and tender of **premiums** are **made.**

\(3\) As of the first **day** of any month but not **more** than 6
months prior to the month in which valid application and tender of
**premiums are made, provided** that **there be paid:**

**(a)** An amount equal to the full reserve on the insurance at the
**end** of the month prior to the month in which valid application is
**made,** and

\(b\) The full premium on the amount of the insurance for the month in
which application is made.

\(4\) If the applicant does not request an effective date, the insurance
will be made effective as of the date valid application is made and the
premium is paid.

\(5\) On a statutory award, when the **insurance** policy is
**prepared** before the application is signed by the veteran, the
effective date is the date the **case** is **processed by** the **Lay
Medical** Approver.

\(6\) When the application is submitted by a disabled service person who
is **a** patient in **a** military hospital and who is about to be
discharged from **active duty, the effective date** will be the day
following **discharge.**

14.06 AMOUNT OF **INSURANCE**

Application for RH insurance must be **made in multiples** of \$500
**and** not less than \$ 1,000 \[;however, it is not permissible for
**a** person to\] carry Government Life Insurance (either NSLI, USGLI,
or both) in excess of \$ 10,000 at any one time. \[The amount of
**paid-up** additions **purchased** from **dividends\], Servicemen\'s**
Group Life Insur**ance \[and Veterans\' Group** Life **Insurance\]** is
not considered in the \$ 10,000 **maximum.** When the **records**
indicate

14-6

\_\_ December 22, 1978 M29-I, Part I

Change 8

\(9\) **\[If** an application is received from an applicant who is on
active duty, the application should be disapproved and the applicant
advised to refile after he or she is separated.

EXCEPTION: If application is received from an applicant who is on active
duty, but the record shows that he or she has been discharged by the
time VA is ready to process the application, or the applicant was
suffering a terminal illness at time of filing, the application will be
accepted and processed in the normal manner.\]

\(10\) When an application for RH insurance is submitted and the
appropriate rating agency of the VA determines that the veteran does not
have a service-connected disability, the application will be
disapproved. **If** the decision as to service connection is
subsequently reversed by such a rating agency, the veteran must file a
new application. If the rating agency reverses the decision as to
service connection after death, the case will be sent to the \[Chief,
Insurance Program Management Division (290),\] for an administrative
decision. The veteran\'s rights and eligibility to apply commences with
the date of notification of the first rating which grants service
connection, after discharge from the last period of active service.

\(11\) Prior to July 1, 1963, only the initial service-connected
disability as determined by the VA entitled the veteran to apply for RH
insurance. On or after July l, 1963, any disability rated as service
connected (except dental ratings) entitles the veteran to apply.
Therefore, if the veteran is given more than one rating of service
connection following his or her last discharge from service and the
ratings are for different disabilities (without regard to severity or
longevity), he or she will have 1 year from the date of notification of
each rating in which to apply. VA Regulation 3400(B)(1)(c) is
retroactive to April 25, 1951.

\(12\) The service information as shown on VA Form 21-6796, Rating
Decision, will be accepted when processing an application for RH
insurance.

\(13\) When an application for insurance has been submitted for
replacement of 5-year level premium term insurance under 38 U.S.C.
781(b) and the application is medically rejected, it may be considered
as an informal application for RH insurance.

b\. Monetary. An amount sufficient to cover at least the initial monthly
premium should be tendered with the application or be of record.
However, if \[the veteran indicated on the\] VA Form 29-4364 \[ \] ,
Application for National Service Life Insurance (RH), \[that he or she
is receiving VA compensation which is sufficient to pay the insurance
premiums, the VA Form 29-4364 will suffice\] in lieu of the initial
premium.

\(1\) When no remittance is tendered or the shortage is more than 10
percent of a monthly premium, the applicant will be asked to submit the
amount of shortage and any comparative health certification within the
specified time from the date of the \[application\].

\(2\) A VA Form 29-888, Insurance Deduction Authorization, **or** an
allotment from service department pay may be accepted to authorize the
initial premium with an application for RH insurance.

\(3\) A VA Form 29-357 \[Claim for Disability Insurance Benefits,\] may
be submitted with the application \[in lieu\] of the initial premium.
\[However,\] in these cases, the application may not be approved until 6
months after the effective-date (excluding statutory disability cases).

\(4\) **If** the effective date of the policy is antedated to the first
day of any month prior to the month in which the application is
submitted, the applicant must furnish the amount of reserve the policy
would have **accrued** from the effective date of insurance to the month
of issue (month the application is submitted), together with the premium
for the month following the date of issue.

**(5)** Waiver of premiums may be granted on this insurance pursuant to
the provisions of 38 U.S.C. 712 and such waiver may not be denied on the
ground that the service-connected disability became total **prior** to
the effective date of the insurance. However, in order that there may be
entitlement to waiver of premiums under section 712, total disability
must be found to exist 6 or more consecutive months after the date of
application for, or the effective date of, the insurance, whichever is
later. Waiver of premiums on statutory awards are exempt

14-5

M29-1, Part 1 December 22,1978

Change 8

a\. The premium rates for suds insurance and all cash, loan, paid-up,
and extended insurance values shall be based on the Commissioners 1941
Standard Ordinary Tables of Mortality with interest at the rate of 2Y4
percent per annum.

b\. All settlements on policies involving annuities shall be calculated
on the basis of the Annuity Table for 1949 with interest at the rate of
2\'A percent per annum.

**c.** Insurance granted under the provisions of this section shall be
on the non participating basis and all premiums and other collections
there for shall be credited directly to a separate fund in the Treasury
of the United States, to be known as the Service-Disabled Veterans\'
Insurance Fund (RH Fund).

d\. The total disability income provision may not be added to this
insurance.

14.10 BENEFICIARY AND OPTIONS SELECTIONS

a\. The regular rules for beneficiary and option apply to RH
applications, except when a \[legal\] guardian files \[an\] application
for RH insurance in behalf of an incompetent veteran, the \[beneficiary
will always be the estate of the insured, or the\] designation \[will\]
be left blank. \[If any other\] beneficiary \[is named by the legal
guardian, he or she will be advised that although it is not acceptable,
it will be made a part of the veteran\'s insurance records.

b\. If the applicant has been rated incompetent and the application is
accompanied by a statement attesting to the veteran\'s mental capacity
to understand the nature of his or her act, the beneficiary designation
will be accepted.

14.11 CONTINUING WAIVER OF PREMIUMS UNDER 38 U.S.C. **712** OR 748 ON
INSURANCE PREVIOUSLY **ISSUED** OR EVIDENCE INDICATES POSSIBLE
ENTITLEMENT TO WAIVER OF PREMIUMS BUT NO REQUEST FOR WAIVER IS OF RECORD

When an application for RH insurance is approved and the records
indicate a continuing waiver of premiums under 38 U.S.C. 712 or 748 on
insurance previously issued, or the medical evidence of record indicates
possible entitlement to waiver of premiums but no claim for waiver has
been received, the insurance records will be referred to the Insurance
Claims Section for action.

14.12 ISSUE OF ENDOWMENT PLAN-APPLICANT TOTALLY DISABLED

a\. An endowment plan will not be issued to an applicant who is totally
disabled on the date he or she applies for the insurance.

b\. If it is disclosed that RH insurance was issued on an endowment plan
through administrative error, or otherwise, not involving fraud on the
part of the insured, while he or she was totally disabled, the insurance
will not be disturbed. Upon application by the insured or his or her
fiduciary, payment of premiums on the endowment plan may be waived
during the continuous total disability of the insured provided all other
requirements are met.

14.13 NOTIFICATION TO VETERAN OF POSSIBLE ELIGIBILITY FOR RH INSURANCE
\[ \]

a\. \[Upon receipt of VA Forms 21-6796, Rating Decision, in the Medical
Determination Section, the designated clerk will send all eligible
rating decisions with the award letters to the Centralized Transcription
activity, Administrative Division, for the preparation and release of
FL\'s 29-5 and 29.5a.\]

b\. \[FL 29-5 will be sent to the veteran with a VA Form 29-4364,
Application for National **Service Life** Insurance (RH), and VA
Pamphlet 29-9, Service-Disabled Veterans Insurance, RH, Information and
Premium Rates.\]

14-8

December 22, **1978 M29-1,** Part **I\
Change 8**

that the applicant is carrying or has carried Government Life Insurance,
the previous records will be considered before action is taken on the
current application. In **order** to determine that the statutory limit
has not been ex**ceeded,** \[the following\] must be included:

**a. The** *face amount* of **any** Government Life Insurance contract
in force under premium-paying conditions (including waiver of premiums
under sec. 712 or 724).

b\. The *face amount* of **any** Government Life insurance contract
providing protection under the extended insurance provision.

**c.** The *paid-up amount* of any Government Life Insurance \[excluding
the amount purchased by dividends for paid-up addition.

**d.** An applicant **may** be issued up to \$10,000 of RH insurance
even though he or she is receiving installment payments on a matured
endowment policy.

**e.** An RH **policy may** be issued notwithstanding the applicant is
receiving payments from maturity of **a** USGLI policy based on total
permanent disability. The amount of insurance on the RH policy is
limited to the nearest multiple of \$500 in the difference between
\$10,000 **and** the **commuted** value of the USGLI insurance which
would have been available to the insured on the effective date of the RH
policy **had** he or she recovered from the total permanent disability
at that time. This **method** of computation will **provide assurance**
that the \$ 10,000 statutory maximum is not **exceeded** in regard to
life insurance **coverage.\]**

14.07 STATUTORY DISABILITY INSURANCE

a\. Upon receipt of VA Form 21-6796, Rating Decision, showing a veteran
has been granted **a** statutory disability rating under 38 U.S.C. 714
and the veteran **meets the** other requirements, the following rules
apply:

\(l\) A \$10,000 20-Payment Life insurance policy (minus the amount of
any existing NSLI/USGLI in force), \[excluding any paid-up additions,\]
**will** be prepared without an application being **received.**

\(2\) The policy \[will be\] personally delivered by a representative of
the VA, \[who will\] furnish an explanation of the policy and \[will
ask\] the veteran to complete the application and VA Form 29-336,
Designation of Beneficiary and Optional Settlement. Waiver of premiums
is granted \[ \] as of the effective date of insurance (the 6-month
waiting period **does** not apply). The insurance is not in force until
**the application** is signed by the veteran or \[the veteran\'s\]
representative.

b\. When an applicant for RH insurance is determined to be statutorily
totally disabled for insurance purposes and **meets** the other
requirements, the following rules apply:

\(1\) In lieu of the plan and amount of insurance applied for, a
\$10,000 **20-payment** Life policy (minus the amount of any existing
NSLI/USGLI in force), \[excluding any paid-up additions,\] is issued.

\(2\) Waiver of premiums is granted effective as of the effective
**date** of insurance (the 6-month waiting period does not apply). The
policy, and a **detailed** letter explaining the action that was taken
**and** the **reason** for it, **are** mailed to the insured.

**14.08** (Deleted.)

14.09 TERMS AND CONDITIONS OF INSURANCE CONTRACTS ISSUED UNDER 38 U.S.C.
722(a)

Insurance granted **under** the provisions of 38 U.S.C. 722(a) is issued
under the same terms **and** conditions as are contained in the standard
policies of NSLI, except as follows:

14-7

\_\_\_ December 22, 1978 M29-1, Part I\
Change 8

c\. \[FL 29-5a will be sent (if necessary) as a follow-up letter. It
will be released 6 months after the release of FL 29-5. The same
enclosures that were released with the FL 29-5 will be sent.\]

d\. The letters will not be released if the veteran is ineligible to
apply or the rating decision is not a qualifying rating; i.e., rating is
for dental treatment only; veteran was discharged prior to April 25,
1951; rating is under the provision of 38 U.S.C. 602 (psychosis); the
rating is not an initial establishment of service connection, etc.

e\. \[ \] FL 29.5 or FL 29-5a will not be sent in those cases in which
the veteran is rated incompetent or totally disabled (statutory). \[The
procedures in M29-l, part IV, chapter l, paragraph l .02e(3) \"NOTE,\"
will be followed.\]

14.14 RULES ON TRANSFER OF RECORDS UPON RECEIPT OF APPLICATION FOR RH
INSURANCE

\"When an application for RH insurance is received in either VA center
(Philadelphia or St. Paul) and there is no record that the applicant has
an active insurance account in the other center, the application will be
processed in the office in which it is received \[with the following
exception: All VA Forms 29-4364, Application for National Service Life
Insurance (RH), indicating\] the method of paying premiums is by
deduction from benefits or by allotment from service \[department\]
retirement pay \[will be processed by the\] Medical Determination
Section \[at the Philadelphia VA center\].

14-9