To amend title 38, United States Code, to make certain improvements to the Servicemembers' Group Life Insurance life insurance program for members of the Armed Forces, and for other purposes.

Summary: Veterans Life Insurance Improvement Act of 2001 - Amends Federal provisions concerning the National Service Life Insurance and United States Government Life Insurance programs to allow payment of their insurance proceeds to: (1) another beneficiary if the first designated beneficiary has not made a claim to such payment within two years after the death of the insured; and (2) a person designated by the Secretary of Veterans Affairs if no claim has been filed by any designated beneficiary within four years after the insured's death.Requires service-disabled life insurance premium rates, as well as all policy cash, loan, paid-up, and extended values, for months beginning on or after the date of enactment of this Act to be based on the 1980 Commissioners Standard Ordinary Basic Table of Mortality, with five percent annual interest.Increases from $90,000 to $200,000 the maximum amount of veterans' mortgage life insurance coverage. Requires the United States to automatically insure any eligible veteran age 69 or younger (currently, any eligible veteran) for such coverage. Repeals the provision terminating such coverage upon the veteran's 70th birthday.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Veterans Life Insurance Improvement 
Act of 2001''.

SEC. 2. PAYMENT OF INSURANCE PROCEEDS TO AN ALTERNATE BENEFICIARY WHEN 
              FIRST BENEFICIARY CANNOT BE IDENTIFIED.

    (a) NSLI--Section 1917 of title 38, United States Code, is amended 
by adding at the end the following new subsection:
    ``(f)(1) Following the death of the insured and in a case not 
covered by subsection (d)--
            ``(A) if the first beneficiary otherwise entitled to 
        payment of the insurance does not make a claim for such payment 
        within two years after the death of the insured, payment may be 
        made to another beneficiary designated by the insured, in the 
        order of precedence as designated by the insured, as if the 
        first beneficiary had predeceased the insured; and
            ``(B) if within four years after the death of the insured, 
        no claim has been filed by a person designated by the insured 
        as a beneficiary and the Secretary has not received any notice 
        in writing that any such claim will be made, payment may 
        (notwithstanding any other provision of law) be made to such 
        person as may in the judgment of the Secretary be equitably 
        entitled thereto.
    ``(2) Payment of insurance under paragraph (1) shall be a bar to 
recovery by any other person.''.
    (b) USGLI.--Section 1952 of such title is amended by adding at the 
end the following new subsection:
    ``(c)(1) Following the death of the insured and in a case not 
covered by section 1950 of this title--
            ``(A) if the first beneficiary otherwise entitled to 
        payment of the insurance does not make a claim for such payment 
        within two years after the death of the insured, payment may be 
        made to another beneficiary designated by the insured, in the 
        order of precedence as designated by the insured, as if the 
        first beneficiary had predeceased the insured; and
            ``(B) if within four years after the death of the insured, 
        no claim has been filed by a person designated by the insured 
        as a beneficiary and the Secretary has not received any notice 
        in writing that any such claim will be made, payment may 
        (notwithstanding any other provision of law) be made to such 
        person as may in the judgment of the Secretary be equitably 
        entitled thereto.
    ``(2) Payment of insurance under paragraph (1) shall be a bar to 
recovery by any other person.''.
    (c) Transition Provision.--In the case of a person insured under 
subchapter I or II of title 38, United States Code, who dies before the 
date of the enactment of this Act, the two-year and four-year periods 
specified in subsection (f)(1) of section 1917 of title 38, United 
States Code, as added by subsection (a), and subsection (c)(1) of 
section 1952 of such title, as added by subsection (b), as applicable, 
shall for purposes of the applicable subsection be treated as being the 
two-year and four-year periods, respectively, beginning on the date of 
the enactment of this Act.

SEC. 3. REDUCTION IN SERVICE-DISABLED VETERANS INSURANCE PREMIUMS.

    Section 1922(a) of title 38, United States Code, is amended--
            (1) by inserting ``(1)'' after ``(a)''; and
            (2) by striking the fourth sentence and all that follows 
        and inserting the following:
    ``(2) Insurance granted under this section shall be issued upon the 
same terms and conditions as are contained in the standard policies of 
National Service Life Insurance, except that--
            ``(A) the premium rates for such insurance--
                    ``(i) for premiums for months beginning before the 
                date of the enactment of the Veterans Life Insurance 
                Improvement Act of 2001 shall be based on the 
                Commissioners 1941 Standard Ordinary Table of Mortality 
                and interest at the rate of 2\1/4\ percent per year; 
                and
                    ``(ii) for premiums for months beginning on or 
                after that date shall be based upon the 1980 
                Commissioners Standard Ordinary Basic Table of 
                Mortality and interest at the rate of 5 percent per 
                year;
            ``(B) all cash, loan, paid-up, and extended values--
                    ``(i) for a policy issued under this section before 
                the date of the enactment of the Veterans Life 
                Insurance Improvement Act of 2001 shall be based upon 
                the Commissioners 1941 Standard ordinary Table of 
                Mortality and interest at the rate of 2\1/4\ percent 
                per year; and
                    ``(ii) for a policy issued under this section on or 
                after that date shall be based upon the 1980 
                Commissioners Standard Ordinary Basic Table of 
                Mortality and interest at the rate of 5 percent per 
                year;
            ``(C) all settlements on policies involving annuities shall 
        be calculated on the basis of The Annuity Table for 1949, and 
        interest at the rate of 2\1/4\ percent per year;
            ``(D) insurance granted under this section shall be on a 
        nonparticipating basis;
            ``(E) all premiums and other collections for insurance 
        under this section shall be credited directly to a revolving 
        fund in the Treasury of the United States; and
            ``(F) any payments on such insurance shall be made directly 
        from such fund.
    ``(3) Appropriations to the fund referred to in subparagraphs (E) 
and (F) of paragraph (2) are hereby authorized.
    ``(4) As to insurance issued under this section, waiver of premiums 
pursuant to section 602(n) of the National Service Life Insurance Act 
of 1940 and section 1912 of this title shall not be denied on the 
ground that the service-connected disability became total before the 
effective date of such insurance.''.

SEC. 4. INCREASE OF VETERANS' MORTGAGE LIFE INSURANCE COVERAGE TO 
              $200,000.

    (a) Increase.--Section 2106(b) of title 38, United States Code, is 
amended by striking ``$90,000'' and inserting ``$200,000''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to insurance payable under section 2106 of title 38, 
United States Code, in the case of a veteran insured under that section 
who dies on or after the date of enactment of this Act.

SEC. 5. AUTHORITY FOR VETERANS' MORTGAGE LIFE INSURANCE TO BE CARRIED 
              BEYOND AGE 70.

    Section 2106 of title 38, United States Code, is amended--
            (1) in subsection (a), by inserting ``age 69 or younger'' 
        after ``any eligible veteran''; and
            (2) in subsection (i), by striking paragraph (2) and 
        redesignating paragraphs (3) and (4) as paragraphs (2) and (3), 
        respectively.