**Cash value and policy loan**

**§8.11 Cash value and policy loan.**

\(a\) Provisions for cash value, paid-up insurance, and extended term
insurance, except as provided in §8.14(b), shall become effective at the
completion of the first policy year on any plan of National Service Life
Insurance other than the 5-year level premium term plan. The cash value
at the end of the first policy year and at the end of any policy year
thereafter, for which premiums have been paid in full, shall be the
reserve with any dividend accumulations, where applicable.

\(b\) Upon written request and upon complete surrender of the insurance
and all claims thereunder, the United States will pay to the insured the
cash value of the policy less any indebtedness, provided the policy has
been in force by payment or waiver of the premiums for at least 1 year.
Paid-up additions do not have to be in force for 1 year before they have
cash values. Unless otherwise requested by the insured, a surrender will
be deemed completed as of the end of the premium month in which the
application for cash surrender is delivered to the Department of
Veterans Affairs, or as of the date of the check for the cash value,
whichever is later. If the application is forwarded by mail, properly
addressed, the postmark date will be taken as the date of delivery. If
it is forwarded through military channels, the date the application is
placed in military channels will be taken as the date of delivery.

\(c\) All values, reserves and net single premiums on participating
National Service Life Insurance, other than as provided in paragraph (e)
of this section, shall be based on the American Experience Table of
Mortality, with interest at the rate of 3 percent per annum. For each
month after the first policy year for which month a premium has been
paid or waived, the reserve at the end of the preceding policy year
shall be increased by one-twelfth of the increase in reserve for the
current policy year. (Authority: 38 U.S.C. 1902, 1906)

\(d\) All values on insurance, reserves, and net single premiums issued
under the provisions of section 1922(a) of title 38 U.S.C., and on
modified life and ordinary life plans of insurance issued under section
1904(c), (d), and (e), respectively, shall be based on the Commissioners
1941 Standard Ordinary Table of Mortality with interest at the rate of
2-1/4 percent per annum. Values between policy years shall be
proportionally adjusted. (Authority: 38 U.S.C. 1904, 1906)

\(e\) All values on insurance, reserves, and net single premiums issued
under the provisions of section 1923(b) of title 38 U.S.C., and on
modified life and ordinary life plans of such insurance issued under
section 1904(c), (d), and (e), respectively, shall be based on table
X-18 (1950--54 Intercompany Table of Mortality) with interest at the
rate of 2-1/2 percent per annum. Values between policy years shall be
proportionally adjusted. (Authority: 38 U.S.C. 1904, 1923)

\(f\) All values, reserves, and net single premiums on nonparticipating
insurance on which the requirements of good health were waived under the
provisions of section 602(c)(2) of the National Service Life Insurance
Act, as amended ("H" Insurance), and on the modified life and ordinary
life plans of such "H" insurance issued under section 1904(c), (d), and
(e), respectively, of title 38 U.S.C. shall be based on the American
Experience Table of Mortality, with interest at the rate of 3 percent
per annum. Values between policy years shall be proportionally adjusted.
The provisions of the "Net Cash Value" clause in National Service Life
Insurance policies are hereby amended accordingly.

\(g\) All values, reserves, and net single premiums on participating
modified life and ordinary life plan insurance issued under section 1904
(b), (d), and (e), respectively, of title 38 U.S.C. shall be based on
the 1958 Commissioners Standard Ordinary Basic Table of Mortality and
interest at the rate of 3 percent per annum. Values between policy years
shall be proportionally adjusted.

\(h\) All values, reserves, and net single premiums on insurance issued
under the provisions of section 1925(b) of title 38 U.S.C, and on
modified life and ordinary life plans of such insurance issued under
section 1904 (c), (d), and (e), respectively, shall be based on the 1958
Commissioners Standard Ordinary Basic Mortality Table and interest at
the rate of 3-1/2 percent per annum. Values between policy years shall
be proportionally adjusted.

\(i\) All values, reserves, and net single premiums on insurance issued
under the provisions of section 1925(c) of title 38 U.S.C., and on
modified life, ordinary life, 20-payment life and 30-payment life plans,
where appropriate, of such insurance issued under section 1904(c), (d),
and (e), respectively, shall be based on the American Experience Table
of Mortality and interest at the rate of 3-1/2 percent per annum. Values
between policy years shall be proportionally adjusted. (Authority: 38
U.S.C. 1906)

\[30 FR 3646, Mar. 19, 1965, as amended at 47 FR 11657, Mar. 18, 1982.
Redesignated and amended at 61 FR 29290, 29292, June 10, 1996;
redesignated at 65 FR 7437, Feb. 15, 2000; amended at 65 FR 19659, Apr.
12, 2000\]

**Supplement *Highlights* reference**: 9(4)