June 1, 1970 M29-1, Part I

CONTENTS

CHAPTER 4. ADMINISTRATIVE ADJUSTMENTS AND GRANTING

ADDITIONAL TIME FOR PAYMENT OF PREMIUMS

OR FILING APPLICATIONS

PARAGRAPH PAGE\
4.01 Calculation of Time Period 4-1

4.02 Inquiry Prior to Expiration of Grace Period 4-1

4.03 Checks or Drafts Not Paid Upon\
Presentation for Payment 4-1

4.04 Checks or Drafts Erroneously Executed 4-l\
4.05 Delays Caused by Disaster Conditions 4-1\
4.06 Administrative Error on Part of VA 4-2\
4.07 Administrative Adjustments 4-2

4-i

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

**CHAPTER 4. ADMINISTRATIVE ADJUSTMENTS AND GRANTING**

**ADDITIONAL TIME FOR PAYMENT OF PREMIUMS**

**OR FILING APPLICATIONS**

**4.01 CALCULATION OF TIME PERIOD**

a\. If the last day of any time period specified or allowed for filing
applications for insurance, reinstatement of insurance, or for the
payment of any premium due shall fall on a Saturday, Sunday or legal
holiday, the time period will be extended to include the following
workday. (VA Regulations 3031 and 34l2) The extension also applies to
change or waiver of a Government Life Insurance contract or any
adjustment authority connected therewith.

b\. When a holiday occurs on Saturday, the preceding Friday is a holiday
for Federal employees. Also, when a holiday occurs on Sunday, the
following Monday is a holiday for Federal employees. These are legal
holidays for Federal employees and will be considered in determining the
last day of a specified period for filing of applications or for payment
of insurance premiums.

**4.02 INQUIRY PRIOR TO EXPIRATION OF GRACE PERIOD**

When an insured makes inquiry before the end of the grace period
disclosing a clear intent to continue insurance, an additional period
not exceeding 60 days may be granted for payment of premiums due. The
premiums in any such case must be paid during the lifetime of the
insured. (VA Regulation 3422(E))

**4.03 CHECKS OR DRAFTS NOT PAID UPON PRESENTATION FOR PAYMENT**

a\. Where a timely premium payment is made by check or draft which is
not paid upon presentation and evidence shows that such nonpayment is
due to error on the part of the bank on which the check or draft is
drawn, or is due to an error in the check or draft and not lack of
funds, the insured will be given 31 days from the date of notice to send
an amount sufficient to pay all premiums through the current month. (VA
Regulations 3017.1(A) and 3407.1(A))

NOTE: Since uncollectible remittances are automatically redeposited by
Federal Reserve banks, a 31-day period for a replacement check will not
be offered unless the policyholder states that the dishonoring of the
check was due to error on the part of the bank.

b\. Where a check or draft is returned because the bank on which it was
drawn has been closed or where a check or draft has been lost or
destroyed after deposit by the VA, the insured will be given 31 days
from the date of notice to replace the remittance in question. Where the
lost item is a money order, sufficient time will be given to obtain a
replacement.

**4.04 CHECKS OR DRAFTS ERRONEOUSLY EXECUTED**

Where a timely premium payment is made by check or draft which is not
presented for payment because it is erroneously executed and evidence
shown that the remitter had sufficient funds in the bank on which the
check or draft was drawn, the insured will be given 31 days from the
date of notice to send an amount sufficient to pay all premiums through
the current month. (VA Regulations 3017.1(B) and 3407.1(B))

**4.05 DELAYS CAUSED BY DISASTER CONDITIONS**

a\. Occasionally, policyholders living in an area which has been
declared a disaster area will experience unavoidable delays in meeting
the time limitation for premium payments or in submitting applications
which are

**4-1**

M29-1, Part 1 October 1,1973

Change 5

affected by delimiting dates, and the reason for the delay is alleged to
have been due to the disaster or to its aftereffects.

b\. Where a statement in writing is received from the insured, his agent
or guardian giving the reason for the delay and the cause may reasonably
be considered as attributable to the disaster or its aftereffects, the
premium payment or application may be accepted as timely, provided:

\(l\) The premium payment or application was tendered within a period
not to exceed 90 days from the date of the disaster, and

\(2\) The grace period or the period allowed for submission of the
application expired during the delimiting period specified above.

c\. Where a recent lapse would cause a claim for disability waiver or a
death claim to be disallowed, investigation should be made to see
whether a disaster area was involved; and, if such is the case,
consideration should be given to adjustment, establishment of liens if
necessary, and allowance of the claim.

d\. The establishment of delimiting dates and the approval of
adjustments regarding delayed payments and/or delayed applications is
restricted to the \[Assistant Director for insurance and to the Chiefs,
Insurance Operations Division\], VA Centers St. Paul and Philadelphia.
However, the period of time allowed may not exceed 90 days from the date
of the disaster involved.

e\. If the finance centers of the military departments become
inoperative due to a natural disaster or war catastrophe, the insurance
coverage will continue without lapse and, as soon as possible, payment
will be brought up to date based upon the latest payment voucher, tape
transmittal or register listing available. Under such arrangement,
premium payments so made will be subject to subsequent adjustment based
on documents received and not processed during the period involved. .

\[f. During a period of disaster conditions, processing of loans and
adjudication of death claims will be expedited .\]

**4.06 ADMINISTRATIVE ERROR ON PART OF VA**

a\. Should it develop that incorrect information was given to the
insured through an administrative error for which the VA alone was
responsible and, because of this error, he failed to make timely payment
of the premium, advantage of the error may not be taken to place the
insured in a worse position than he would have occupied had the error
not occurred. when an error of this type is disclosed and the next
succeeding premium was timely paid, the insurance will not be considered
to have lapsed. A lien will be established for the amount of the missing
premium.

NOTE: When there is sufficient time to permit the insured to remit the
missing monthly premium prior to expiration of the grace period, it will
not be considered that the insured was placed in a worse position than
he would have been if the error had not been made.

b\. Upon request of the insured, regular dividends which are payable as
of the date of an administrative adjustment will be applied toward the
cost of such adjustment. The adjustment and authorization of the
dividend will be considered a simultaneous action in the same manner as
when a dividend is applied to cover cost of reinstatement.

c\. Where more than 6 months have elapsed since the due date of the
premium in default and the account may not be adjusted under
subparagraph a above, the insured will be advised of the reinstatement
requirements. If there are unusual circumstances in an individual case
which make it appear that adjustment should be considered, the case will
be submitted to \[the Chief, Insurance Program Management Division
(290C), VA Center Philadelphia\].

4-2

May 15,1972 M29-l, Part I\
Change 3

4.07 ADMINISTRATIVE ADJUSTMENTS

1\. When examination of a lapsed account shows that credits (\[38 U.S.C.
707,1 or Adm. Dec. 902) applied as premiums have been exhausted and the
policyholder was not advised in time to remit timely premium payments,
the policyholder will be allowed a period of 3l days from the date of
the letter to pay all missing premiums without interest, through the
current month; provided:

\(l\) No more than 6 months have elapsed since the due date of the
premium in default, and

\(2\) The payment requested is paid during the lifetime of the Insured.

NOTE: Release of the dividend credit statement or other type notice to
the latest address of record constitutes adequate notice even though the
statement of notice is returned unclaimed.

b\. If the policyholder has been notified that the account had lapsed
after expiration of the Credits, the account will not be adjusted.
However, if the policyholder acted within 3 months after notice of lapse
in such manner as to manifest an intention to continue insurance (for
example by tender of premiums or the submission of an acceptable
application for reinstatement), he will be permitted to continue his
insurance if the conditions in paragraph a above are met.

4-3