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

**CONTENTS\
CHAPTER 11. MATURING ENDOWMENTS\
** PARAGRAPH PAGE\
11.01 Notice of Maturing Endowment Policy 11-1\
11.02 Settlement of Proceeds of a Matured Endowment Policy 11-1\
11.03 Maturity of Endowment Policy on Disability Waiver 11-2

11.04 Types of Application Which May Be Used for Settlement\
of the Proceeds 11-2

11.05 Net Amount of Proceeds for Installment Settlement 11-2\
11.06 Credit Items Included With Net Amount Payable 11-3\
11.07 Issuance of Check for Proceeds of a Matured Endowment 11-3\
11.08 Disposition of Unpaid Installments at Death of Insured 11-3

11.09 Beneficiary Designations and Optional Settlement\
Selections on Maturing Endowment Policy 11-3

11.10 USGLI Endowment Policy With Total Permanent Disability 11-3\
11.11 Delayed Payment of Endowment Proceeds 11-4

Iii

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

**CHAPTER 11. MATURING ENDOWMENT**

**11.01 NOTICE OF MATURING ENDOWMENT POLICY**

a\. (Deleted.)

b\. All policies that mature as endowments, including contracts that
mature with pure endowment payable, will be paid under option 1, without
prior election of such option by the insured. Four days prior to the
maturity date, either a VA Form 29-8348, Information About Your
Insurance, or a VA Form 29-5767, Maturing Endowment Notification, will
be sent to the insured. If the amount payable is \$2,500 or less, the VA
Form 29-8348 will be sent to the insured. It informs him or her of the
maturity of the policy, the type of insurance that is maturing and that
a check for the amount payable will be sent in a few days. If the amount
payable is more than \$2,500, a VA Form 29-5767 will be sent to insured.
It informs him or her of the maturity of the policy, the type of
insurance that is maturing and that a check for the amount payable will
be sent in a few days. It will also advise that if he or she is not
satisfied with the method of payment and wishes to receive the proceeds
under one of the available installment options, he or she should not
cash the check when it arrives. Instead, the insured should complete the
reverse side of the VA Form 29-5767, indicating the option under which
the proceeds are to be received, and return the form with the check to
the originating VA office.

**11.02 SETTLEMENT OF PROCEEDS OF A MATURED ENDOWMENT POLICY**

a\. When insurance issued on the endowment plan is in force at the end
of the endowment period, settlement is due the insured on the first day
following the end of the endowment period. The policy must meet one of
the following requirements:

\(1\) All premiums must be paid or waived to the end of the endowment
period. If the last monthly premium was not paid or waived, the premium
will be deducted from the proceeds of the policy.

\(2\) On lapsed policies, the net cash value (plus dividends on deposit,
if any) must have been sufficient to purchase extended term insurance to
the end of the endowment period and pure endowment.

\(3\) On policies surrendered for reduced paid-up insurance, the policy
must have remained in force as paid-up insurance to the end of the
endowment period.

b\. When a policy matures as an endowment, the settlement of the
proceeds may be effected by the insured if competent. If the insured is
incompetent, \[the VSO (Veterans Services Officer) of the regional
office having jurisdiction of the veteran\'s claims file will be
contacted by the use of VA Form 29-505, Request for Information.\]

\(1\) (The VSO will be advised of the amount of the matured endowment
and will be asked to designate an appropriate fiduciary to which the
proceeds are to be paid. The designee may include a legal custodian
(Federal fiduciary).\]

\(2\) (If there is evidence that a legal guardian has been appointed and
the VSO certifies that payment should be made to an individual other
than that guardian, the case will be referred to the Chief, Insurance
Program Management Division (290), for review before any payment is
made.\]

c\. The proceeds of a matured endowment may be paid in one sum (option
1), in equal monthly installments (36 to 240), in multiples of 12
(option 2), or in installments under the RLI (refund life income)
option. The RLI became effective January l, 1971, and was authorized by
Public Law 91-291. The insured may also select a combination of part in
cash and the balance under one of the installment options. In addition,
he or she may elect to have all or any part of the proceeds applied to
pay premiums or reduce a lien or loan on any other active account.

d\. If payments are being made under option 2, the insured may request
the present value of the remaining unpaid installments in one sum. If
payments are being made under the RLI, the insured may request the
present value of the remaining unpaid guaranteed installments in one
sum.

**11-1**

**M29-1, Part I December 22, 1978**

**Change 8**

e\. If the insured does not indicate how he or she wishes the proceeds
paid, they will be paid in one sum.

f\. If an RLI option is selected, payments will be made in monthly
installments for such periods certain as may be required in order that
the sum of the installments certain, including a last installment of
such reduced amount as may be necessary, shall equal the proceeds of the
matured endowment with such payments continuing throughout the lifetime
of the insured. All settlements under the RLI shall be calculated on the
basis of the Annuity Table for 1949. The age of the insured (based on
his or her date of birth) as of the maturity date of the policy is used
to determine the amount of the monthly installment for the RLI option.

g\. If the option selected requires monthly installments of less than
\$10, the amount payable shall be paid in such maximum number of monthly
installments as are a multiple of 12 as will provide a monthly
installment of not less than \$10.

h\. When a matured endowment is to be paid under option 5 (refund life
income), dividend accumulations, dividend credit and/or deposit, will
not be included as part of the proceeds of the policy used to purchase
the annuity. Any dividend accumulations will be paid in one sum.

i\. Paid-up endowment additions mature concurrently with the basic
policy and will be paid under the same settlement option.

j\. When an endowment policy matures with paid-up endowment additions
and paid-up life additions, and there is an outstanding loan, the loan
\`will be paid from the proceeds of the maturing endowments.

**11.03 MATURITY OF ENDOWMENT POLICY ON DISABILITY WAIVER**

If a TDIP award is granted before the maturity of a policy, the benefit
payments will continue for as long as the insured remains totally
disabled, irrespective of the fact that the policy matures as an
endowment.

**11.04 TYPES OF APPLICATION WHICH MAY BE USED FOR SETTLEMENT OF THE
PROCEEDS**

Application for settlement of the proceeds of an endowment policy may be
made on VA Form 29-5767, or on any type of document which clearly
expresses the intent of the insured.

**11.05 NET AMOUNT OF PROCEEDS FOR INSTALLMENT SETTLEMENT**

a\. When all premiums are paid to the maturity date, the amount of the
monthly installment will be based on the face value of the policy, less
outstanding loan, loan interest, statutory lien, and statutory lien
interest. The following types of indebtedness will be collected from the
initial payment(s) unless the indebtedness is greatly in excess of
several monthly installments:

\(l\) Premiums due VA.

\(2\) Total disability overpayment.

\(3\) Administrative lien and interest.

\(4\) Other indebtedness, including finance and service department
indebtedness.

An Internal Revenue Service levy may be deducted from any amount
payable, but only for indebtedness of the person to whom such proceeds
are payable.

c\. If the parent policy was surrendered for reduced paid-up endowment
insurance, the monthly installments will be based on the amount of
paid-up insurance less indebtedness. If the parent policy lapsed and the
cash value was used to purchase extended term insurance and pure
endowment, the amount of the monthly installments will be based on the
amount of pure endowment. The amount of pure endowment, if less than
full dollars, will be founded out to the next higher dollar.

**11-2**

**October 1, 1973 M29-1, Part I**

**Change 8**

\(2\) Total disability overpayment.

\(3\) Administrative lien and interest.

\(4\) Other indebtedness, including finance and service department
indebtedness.

b\. An Internal Revenue Service levy may be deducted from any amount
payable, but only for indebtedness of the person to whom such proceeds
are payable.

**11-2a**

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

**11.06 CREDIT ITEMS INCLUDED WITH NET AMOUNT PAYABLE**

The following credit items will be included in the net amount payable as
a part of the initial payment:

a\. Unpaid dividends, including dividends for the current year.

b\. Dividend credits and deposits.

c\. PIR credits.

d\. Premium overages and unused premiums.

**11.07 ISSUANCE OF CHECK FOR PROCEEDS OF A MATURED ENDOWMENT**

a\. The check for the proceeds of a matured endowment policy will be
made payable to the insured, if competent, at the address furnished by
him or her.

b\. If the insured is incompetent, the check will be made payable to the
\[payee certified by the VSO\] (Veterans Services Officer). ( \] A VA
Form 29-504, Notice of Payment Due Incompetent Veteran, will be sent to
the appropriate VSO, except in Philippine cases. In competent Philippine
cases, the check will be sent to the (designated payee\] in care of the
VSO at the Manila regional office. (Cases pending the appointment of a
certified payee\] will be held in abeyance.

**11.08 DISPOSITION OF UNPAID INSTALLMENTS AT DEATH OF INSURED**

a\. If the insured dies before receiving all installments due and no
designated beneficiary survives, the present value of the remaining
unpaid installments will be paid to the insured\'s estate in one sum,
provided such payment would not escheat.

b\. If the designated beneficiary survives the insured, the present
value of the remaining installments will be paid in one sum to the
beneficiary unless the insured or the beneficiary has elected to
continue the installments under the option selected by the insured.

**11.09 BENEFICIARY DESIGNATIONS AND OPTIONAL SETTLEMENT SELECTIONS ON
MATURING ENDOWMENT POLICY**

a\. If the insured has elected to receive the proceeds of his or her
maturing endowment policy under option

2 (36 to 240 installments) or option 5 (refund life income), he or she
may elect that, upon death, the present

value of any remaining unpaid guaranteed installments be paid to the
beneficiary in one sum or continue to

be paid to the end of the guaranteed period under the original option.
If the beneficiary or option information

furnished on the VA Form 29-5767 is not clear or if an unacceptable
option is selected, a statement will be

prepared on bond paper and sent to the insured for completion and
signature. The statement will clarify his

or her beneficiary and option election. A copy of the incomplete or
inadequate designation will be enclosed.

A copy of the statement will be filed in the folder.

b\. Beneficiary and option information furnished on VA Form 29-5767 will
be included in the security microfilming program.

**11.10 USGLI ENDOWMENT POLICY WITH TOTAL PERMANENT DISABILITY**

When an endowment policy, having been previously matured by a total
permanent disability award, reaches the date it would have matured as an
endowment and less than 240 monthly installments have been paid on the
award, the insured will be asked to make a decision. The insured has the
privilege of continuing the award \`or receiving the commuted value of
the unpaid guaranteed installments as a matured endowment. A letter will
be sent to the insured requesting his or her selection.

**11-3**

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

**Change 8**

**11.11 DELAYED PAYMENT OF ENDOWMENT PROCEEDS**

When the insured, if competent, requests the VA to withhold payment of
the proceeds of a matured endowment policy, he or she will be notified
by letter that the VA will withhold payment of the proceeds for up to l
year, and that the proceeds will not accrue interest during the
withholding period.

**11-4**