August 31,1971 M29-1, Part I\
**Change 2**

CONTENTS

CHAPTER 33. DISABILITY BENEFITS ON WAR RISK INSURANCE

PARAGRAPH PAGE

33.01 General 33-I\
33.02 Definition of Total Permanent Disability 33-I\
33.03 Statutory Disabilities 33-I\
33.04 Necessity of Claim **33-2\
**33.05 Commencing Date of Total and Permanent\
Disability Benefits 33-2\
33.06 Total and Permanent Disability Benefits\
After Death 33-2\
33.07 Revival of Insurance Under Section 305,\
World War Veterans\' Act of 1924, as Amended 33-3\
33.08 Section 306, World War Veterans\' Act of

1924, as Amended 33-6

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August 31, 1971 M29-1, Part I\
Change 2

. CHAPTER 33. DISABILITY BENEFITS ON WAR RISK INSURANCE

33.01 GENERAL

a\. The War Risk Insurance Act, (an act to authorize the establishment
of a Bureau of War Risk Insurance in the Treasury Department) approved
September 2, 1914, provided for the insurance of commerce against the
risks of war. This Act was amended October 6, 1917, and sections 400,
401, 402, 403, 404 and 405 were added granting and regulating insurance
against death or total permanent disability. This insurance is known as
Yearly Renewable Term Insurance and Automatic Insurance.

b\. The War Risk Insurance Act was thereafter amended from time to time.
The amendments of December 24, 1919, and August 9, 1921, set forth the
requirements for granting Automatic Insurance under which claim may be
filed today. Section 401, of the War Risk Insurance Act, as so amended,
provides (insofar as we are concerned that any person in the active
service on or after the 6th day of April 1917, and before the 11th day
of November 1918, who, while in such service, and before the expiration
of 120 days after October 15, 1917, or 120 days after entrance into or
employment in the active service, becomes or has become totally and
permanently disabled without having applied for insurance, shall be
deemed to have applied for and to have been granted insurance, payable
to such person during his life in monthly installments of \$25 each; and
any person inducted into the service by a local draft board after the
6th day of April 1917, and before the 11th of November 1918, who while
in such service, and before being accepted and enrolled for active
military or naval service, becomes or has become totally and permanently
disabled, without having applied for insurance, shall be deemed to have
applied for and to have been granted insurance, payable to such person
during his life in monthly installments of \$25 each. (This was enlarged
in amendment of August 9, 1921, to include the following: Those persons
who between the 6th day of April 1917, and the 11th day of November
1918, applied for enlistment or enrollment in the military or naval
forces, and who were accepted provisionally and directed or ordered to a
camp, post, station, or other place for final acceptance into such
service, shall be deemed to have the same status as an inducted man not
yet accepted and enrolled for active service.)

c\. Section 301, World War Veterans\' Act of 1924, as amended, (formerly
sec. 402 and 404, War Risk Insurance Act), provides that all Yearly
Renewable Term Insurance shall cease on July 2, 1926, except when death
or total permanent disability shall have occurred before July 2, 1926,
and such insurance shall be converted. The cease date was extended to
July 2, 1927, by the amendment of March 4, 1925.

33.02 DEFINITION OF TOTAL PERMANENT DISABILITY

Any impairment of mind or body which renders it impossible for the
disabled person to follow any substantially gainful occupation shall be
deemed to be total disability. Total disability shall be deemed to be
*permanent* whenever it is founded upon conditions which render it
reasonably certain that it will continue throughout the life of the
person suffering from it.

33.03 STATUTORY DISABILITIES

Contracts issued prior to December l5, 1936, provide benefits for
anatomical and functional losses (permanent loss of 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, without regard to the definition
above since such disabilities are deemed to be total and permanent.

NOTE: The statutory pro visions concerning the conditions of permanently
helpless or permanently bedridden that apply to United States Government
Life Insurance contracts do not apply to Yearly Renewable Term and

Automatic Insurance. !

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M29-l ,Part I August 3I, 1971

Change 2

33.04 NECESSITY OF CLAIM

A **claim** by the insured or **a** person acting **in** his behalf is
**a** prerequisite to (determining entitlement to total and permanent
disability benefits. The term *claim* is defined as any writing which
alleges total and permanent disability at a time when the contract of
insurance was in force, or which uses words showing an intention to
claim insurance benefits.

33.05 COMMENCING DATE OF TOTAL AND PERMANENT DISABILITY BENEFITS

a\. Under Yearly Renewable Term Insurance, benefits **begin** as of the
commencing date of total and permanent disability which must have
occurred while the policy was in force or where such insurance is
revived under section 305, World War Veterans\' Act of 1924, as amended.
The insured shall be paid \$5.75 **per** thousand per Month during such
disability and premiums **are** waived.

**b.** Under Automatic Insurance, benefits of \$25 per month commence as
of the beginning date of total **and** permanent disability.

**c.** The benefits continue so long as the insured remains totally and
permanently disabled. The benefits reduce the face amount of Yearly
Renewable Term insurance. Automatic insurance under section 401 of the
War Risk Insurance Act, as **amended,** has no face value.

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

e\. **The** monthly installments will be reduced by **an** indebtedness
(Lien), which will be liquidated after 240 installments have been paid
to the insured. Commencing with the 241st installment, the monthly
benefit will not \_\_\_ be reduced.

f\. There is no time limit on the filing of claim for total and
permanent disability benefits under War Risk or Automatic Insurance.

g\. There is no limit as to age of the insured when claim is made under
such insurance.

h\. The requirement as to *due proof* is not applicable to Yearly
renewable\' Term or Automatic Insurance.

i\. The insured has the right to elect to receive payments under prior
contract or policy of insurance (Yearly Renewable Term Insurance) upon
surrender of subsequent contract or policy \`\[USGLl\]), and in event of
such election, he may not thereafter receive any benefits under
subsequent contract t or policy surrendered.

NOTE: If the election is made to take under the converted contract or
policy (USGLI), the effective date of the total permanent disability for
award purposes will be no earlier than the date of conversion. (Of
course, the due proof is applicable.)

j\. The right of election to receive benefits under the Yearly Renewable
Term policy is Imitated to the insured and in the absence of statutory
authority cannot be exercised by one other than insured and cannot be
exercised by beneficiary **in** latter\'s own right.

\$3.06 TOTAL AND PERMANENT DISABILITY BENEFITS AFTER DEATH

a\. Upon death of the insured under Yearly Renewable Term Insurance
while on total permanent disability, if a valid designation of
beneficiary was made (limited to spouse, child, grandchild, parent,
brother, sister, uncle, aunt, nephew, niece, brother-in-law and
sister-in-law of the insured) any monthly installments which have
accrued to the insured at the time of his death and not paid during his
Lifetime will be **payable** to the insured\'s estate.

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August 3l, l97l M29-l, Part **I\
Change 2**

Installments accruing after death of the insured, not exceeding 240,
will be payable to the primary beneficiary so long as such beneficiary
lives. If the beneficiary receiving such installments dies before 240
installments have been paid, all accrued unpaid installments due prior
to the death of the beneficiary are payable to the estate of the
beneficiary. The remaining installments, if any (not exceeding 240), are
payable to the contingent beneficiary, if one was designated, otherwise,
the commuted value of all installments accruing after the death of the
designated beneficiary are payable to the estate of the insured.

b\. Upon death of the insured either before receiving any installments
of Automatic Insurance or before receiving 240 installments, then \$25
per month will be payable to his widow from the time of his death and
during her widowhood; or if there is no widow surviving him then to his
child or children; if no children then to his mother; if no mother
surviving then to his father; provided that no more than 240
installments including those received by the insured shall be paid.

c\. Commuted value of unpaid installments only applies in those cases
where claim formal or informal was filed prior to death of the insured.
That is to say, where claim is filed by beneficiary or other person
entitled to receive the insurance and there is no record of a claim
(formal or informal) filed prior to death, if the decision finds total
permanent disability at a time when the insurance was in force, only the
face value of the policy is payable.

d\. Section 301 , World War Veterans\' Act of 1924, as amended, provides
that yearly renewable term insurance shall cease on July 2, 1927, except
where death or total permanent disability occurs before that date. No
provision is made for a grace period for term insurance after July 2,
1927. Thus, in a case where term insurance lapsed July 1, 1927, and
total and permanent disability commenced July 8, 1927, it would be
necessary to deny the claim for total and permanent disability insurance
benefits (Opinion Acting General Counsel, C-265, 681, September 20,
1927; Director\'s Decision, U.S. Veterans\' Bureau, No. 353, November 5,
1927.)

33.07 REVIVAL OF INSURANCE UNDER SECTION 305, WORLD WAR VETERANS\' ACT
OF l924, AS AMENDED

**a.** Section 305 (referred to in this paragraph as *this section),*
formerly section 408, War Risk Insurance Act, provides where any person
has heretofore allowed his insurance to lapse while suffering from a
compensable disability for which compensation was not collected and has
become totally and permanently disabled and at such time was or is
entitled to compensation remaining uncollected, then and in that event
so much of his insurance as said uncollected compensation would purchase
if applied as premiums when due, shall not be considered as lapsed. Such
revived insurance is payable to the insured or to his beneficiaries.
Insurance which lapsed subsequent to July 2, 1926, May not be revived
under this section. This is true with regard to Yearly Renewable Term
Insurance as well as United States Government Life Insurance.

b\. This section as amended July 2, 1926, added-on has canceled or
reduced all or any part of such insurance-and also provides that the
insurance hereafter so revived shall be paid only to the insured, widow,
child or children, dependent mother or father, and in the order named
unless otherwise designated by the insured during his lifetime, or, by
last will and testament. This restriction of beneficiaries applies to
Yearly Renewable Term Insurance as well as USGLI. Where insurance is
revived under this section on total permanent disability occurring prior
to July 2, 1926, it is known as heretofore revived insurance and after
July 2, 1926, as hereafter revived insurance and should be so designated
on the awards. Restriction upon the terms child or children, limiting
these terms to persons under 18 years and to those permanently incapable
of self-support was not intended to apply to the term child or children
as used in this section and as affecting insurance revived under that
section. (Opinion of the General Counsel February 3, 1928, XC-229 968.)

c\. The words *heretofore* and *hereafter* have significance only in
regard to classification of beneficiaries and it should be kept in mind
that it has no relation to the word heretofore as used in this section
which refers to the date prior to which insurance must have lapsed, been
canceled or reduced in order to be affected by the provisions of the
section.

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M29-I, Part I August 31,1971

Change 2

d\. Before consideration may be given the application of this section,
it must be determined that (1) the insurance was issued and **there**
was a lapse, cancellation or reduction prior to July 2, 1926; (2) that
on the date of such lapse, cancellation or reduction the insured was
suffering **a** compensable disability of at least 10 percent for which
compensation was then uncollected; and (3) as of the commencing date of
total permanent disability there was any compensation due and
uncollected. In the event these three requirements are not met, the
claim will be denied insofar as this section is concerned. The theory on
which Congress so provided was that if a **veteran** was due
compensation for **a** service-connected disability, that he should not
lose his insurance by fail **ire** of payment of premiums to the extent
that he could **have** used such compensation to pay the premiums had he
received it.

c\. Under this section, insurance hereafter **revived** is payable only
to certain specific individuals **and** not to the estate of the veteran
or to the estate of survivors within the restricted permitted class who
later died. Since accrued payments could not be paid to any estate, they
cannot, without the express provision of statute, be paid to **anyone.**

f\. **Where** there have been multiple lapses of Yearly Renewable Term
Insurance, several lapses occurring before and after July 2,1926, and
the first two requirements of this section are met, the lapses of
insurance after July 2, 1926, must be disregarded and uncollected
compensation should be applied to the insurance which last lapsed prior
to July 2, 1926, and then if no insurance is saved, the rule is applied
to the next prior lapse and soon to the first lapse. As to any question
concerning the disposition of premiums that may have been paid in
connection with reinstatements after July 2, 1926, it is assumed that
these reinstatements were **valid** and that full protection was
afforded thereunder against the contingency of death or of total and
permanent disability during all the periods for which the insurance was
in force under the subsequent reinstatements. Upon this view, premiums
paid in connection with the subsequent reinstatements stand as earned
and, therefore, would not be subject to a refund.

g\. Generally, the compensation used to revive insurance under this
section is that compensation resulting from ratings under the laws,
regulations **and** other criteria in effect over the periods covered by
the 305 rating.

\(l\) Compensation which is uncollected by reason of the provision of
section 310 of the War Risk Insurance Act, as amended, or section 210 of
the World War Veterans\' Act of 1924, as amended, shall be considered as
uncollected compensation for the purposes of this section.

**(2)** The subsequent collection by the insured of war-risk disability
compensation due **and** payable at date of happening of total and
permanent disability, will not defeat the right to apply the amount of
such compensation to revive insurance under the provisions of this
section.

\(3\) Adjusted-service compensation and a loan on the insured\'s bonus
certificate *arc not that character of compensation* available to revive
insurance. (Gibson et al. **v.** U.S., 28 F. Supp. 514 E.D. Ky. July
1939.)

\(4\) The \$60 bonus provided by Public Law 254, 65th Congress, approved
February 24, 1919, and not received by **an** insured who died after
such date can be used as uncollected compensation to **revive**
insurance for purposes of this section.

\(5\) Where **an** insured was awarded compensation for total permanent
disability and payments were regularly made until his death, and
subsequent thereto he was given an increased disability rating carrying
with it increased compensation from a date prior to lapse of his policy,
the additional compensation was compensation remaining uncollected to
which the veteran was entitled at the time of his death. (35 (\>ps. A.G.
141, July 24, 1926.)

\(6\) An insured is not entitled to compensation for any period during
which he refused to submit to physical examination. Therefore, if the
**only** compensation not collected at the time his insurance lapsed was
compensation for that period which never was owing or collectible, he
was not at that time *suffering from a compensable disability for which
compensation was not collected;* **and** no compensation for that period
can be considered compensation remaining uncollected to which he was
entitled at the time of his total permanent disability.

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August 31, 1971 M29-1, Part I\
Change 2

\(7\) Additional compensation to which the insured was entitled because
of his Marriage, and which was owing to him and was collectible at the
time of his total permanent disability, was compensation remaining
uncollected to which he was entitled at that time within the Meaning of
this section. It is immaterial that the compensation remaining
uncollected at the time of permanent total disability was not the same
compensation as that uncollected **at** the time the insurance lapsed.
lt. is also immaterial that the cause of non collection of the
additional compensation was the failure of the insured to file **a**
claim therefor or his delay in **filing** claim.

\(8\) Uncollected compensation representing only a portion of a month
during which the total permanent disability commenced is not available
to revive insurance under this section. In determining this question,
compensation is to be figured as accruing in monthly installments
reckoning from the first day to **the end** of **any** given calendar
month and that at the date of the maturity of the insurance **there**
must have been at least 1 monthly installment then uncollected.

\(9\) Apportioned compensation, to a wife, child, children or dependent
parents, that remains uncollected may not be used to revive insurance
under this section. (Director\'s Decision No. **223** of September 25
l925.)

\(10\) If the insured was so helpless as to be in constant need of a
nurse or attendant and if during such period **was** not hospitalized by
the Bureau; and further, if it has been decided that he is entitled to
additional compensation for such attendant and, if such sum remained
uncollected at the date of Maturity of the insurance, then such sum
shall be considered as uncollected compensation within the meaning of
this section. (Director\'s decision o. 21 of August 27, 1925.)

h\. There may be an occasion where **a** claim is submitted for revival
under this section and the insurance involved has been surrendered for
its **cash** value. On the one hand it may be contended that a **policy
which** has been surrendered for its cash surrender value is none the
less **a** canceled policy, the only difference being that a converted
**policy** which has been in force a year or more has **a** cash
surrender value, while one that is canceled before that time has none;
that inability to continue premium payments may often be the cause of
surrender of

\_\_\_\_ the **policy** for cash as it usually is of cancellation when
less than a year old; and there is no reasonable basis for a distinction
between the two cases nor any clearly disclosed intention to make one.
On the other hand, the language of the statute itself gives some
indication that Congress did not intend to include a policy surrendered
for its cash value. While it expressly provides for deduction from the
amount of the revived insurance of the *unpaid premiums and interest
thereon,* it does not provide for deduction of any thing which may have
been paid the insured as the **cash** surrender value of his policy. It
cannot have been intended that the insured is to have both the cash
surrender value of his insurance and the face amount of the policy, and
the absence of a provision for deduction of the former suggests that
Congress did not contemplate the revival of a policy so surrendered.
Therefore, insurance that has been surrendered for cash value cannot be
revived under this section of the World War Veterans\' Act of 1924.

1\. The insured is entitled to so much of his insurance as uncollected
compensation would purchase if applied as premiums, irrespective of the
minimum and multiple amount specified in obtaining insurance.
(Director\'s Decision No. 191 of May 26, 1925.)

j\. The words *compensable disability* mean a disability for which
compensation may be paid, and should be construed in connection with the
words immediately following, *for which compensation was not collected.*
There are no limitations on these words. The cause of this non
collection may be either delay **by** the Veterans\' Bureau in making
the award or delay on the part of the claimant in filing his claim.
There is no authority to inquire into the cause of the fact that the
compensation was not collected. The pertinent and controlling part is
that it was not collected. (Op. Attorney General September 11, 1925.)

k\. Section 305, World War Veterans\' **Act** of 1924, as amended, may
apply to a case in which **there** is a retroactive and automatic waiver
of premiums under section 306, World War Veterans\' Act of 1924, as
amended. If at the termination of waiver of premiums under section 306,
as in the case of 6 months **after the** appointment of guardian, the
insurance would lapse at the end of the 6-month period. However, if at
the time of lapse there was uncollected compensation and the
requirements as to revival under section 305 **are** met, then the
insurance can be revived under section 305 with the understanding that
there will be deducted unpaid premiums with interest as provided for by
both sections **305** and 306.

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M29-Part 1 I August 31,1971

Change 2

33.08 SECTION 306, WORLD WAR VETERANS\' ACT OF 1924, AS AMENDED

This section (formerly section 409, War Risk Insurance Act), provides
that payment of premiums on Yearly Renewable Term or United States
Government Life Insurance on the due date thereof may be waived and the
**insurance may be** deemed not to have lapsed in cases where an insured
allowed his insurance to lapse while rated incompetent or until **a**
guardian has notified the VA of his qualifications, but not later than 6
months after appointment as guardian. Cases under this section may be
referred by Policy Service Section to Insurance Claims Section for
determinations of competency. No application for this waiver of premiums
is necessary.

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