### §1904. Plans of insurance

(a) Insurance may be issued on the following plans: Five-year level premium term, ordinary life, twenty-payment life, thirty-payment life, twenty-year endowment, endowment at age sixty, and endowment at age sixty-five. Level premium term insurance may be converted as of the date when any premium becomes or has become due, or exchanged as of the date of the original policy, upon payment of the difference in reserve, at any time while such insurance is in force and within the term period to any of the foregoing permanent plans of insurance, except that conversion to an endowment plan may not be made while the insured is totally disabled.

(b) Under such regulations as the Secretary may promulgate a policy of participating insurance may be converted to or exchanged for insurance issued under this subsection on a modified life plan. Insurance issued under this subsection shall be on the same terms and conditions as the insurance which it replaces, except (1) the premium rates for such insurance shall be based on the 1958 Commissioners Standard Ordinary Basic Table of Mortality and interest at the rate of 3 per centum per annum; (2) all cash, loan, paid-up, and extended values shall be based on the 1958 Commissioners Standard Ordinary Basic Table of Mortality and interest at the rate of 3 per centum per annum; and (3) at the end of the day preceding the sixty-fifth birthday of the insured the face value of the modified life insurance policy or the amount of extended term insurance thereunder shall be automatically reduced by one-half thereof, without any reduction in premium.

(c) Under such regulations as the Secretary may promulgate, a policy of nonparticipating insurance may be converted to or exchanged for insurance issued under this subsection on a modified life plan. Insurance issued under this subsection shall be on the same terms and conditions as the insurance which it replaces, except that (1) term insurance issued under section 621 of the National Service Life Insurance Act of 1940 shall be deemed for the purposes of this subsection to have been issued under section 1923(b) of this title; and (2) at the end of the day preceding the sixty-fifth birthday of the insured the face value of the modified life insurance policy or the amount of extended term insurance thereunder shall be automatically reduced by one-half thereof, without any reduction in premium. Any person eligible for insurance under section 1922(a), or section 1925 of this title may be granted a modified life insurance policy under this subsection which, subject to exception (2) above, shall be issued on the same terms and conditions specified in section 1922(a) or section 1925, whichever is applicable.

(d) Any insured whose modified life insurance policy is in force by payment or waiver of premiums on the day before the insured's sixty-fifth birthday may upon written application and payment of premiums made before such birthday be granted National Service Life Insurance, on an ordinary life plan, without physical examination, in an amount of not less than $500, in multiples of $250, but not in excess of one-half of the face amount of the modified life insurance policy in force on the day before the insured's sixty-fifth birthday. Insurance issued under this subsection shall be effective on the sixty-fifth birthday of the insured. The premium rate, cash, loan, paid-up, and extended values on the ordinary life insurance issued under this subsection shall be based on the same mortality tables and interest rates as the insurance issued under the modified life policy. Settlements on policies involving annuities on insurance issued under this subsection shall be based on the same mortality or annuity tables and interest rates as such settlements on the modified life policy. If the insured is totally disabled on the day before the insured's sixty-fifth birthday and premiums on the insured's modified life insurance policy are being waived under section 1912 of this title or the insured is entitled on that date to waiver under such section the insured shall be automatically granted the maximum amount of insurance authorized under this subsection and premiums on such insurance shall be waived during the continuous total disability of the insured.

(e) After June 30, 1972, and under such regulations as the Secretary may promulgate, insurance may be converted to or exchanged for insurance on a modified life plan under the same terms and conditions as are set forth in subsections (b) and (c) of this section except that at the end of the day preceding the seventieth birthday of the insured the face value of the modified life insurance policy or the amount of extended insurance thereunder shall be automatically reduced by one-half thereof, without any reduction in premium. Any insured whose modified life insurance policy issued under this subsection is in force by payment or waiver of premiums on the day before the insured's seventieth birthday may be granted insurance on the ordinary life plan upon the same terms and conditions as are set forth in subsection (d) of this section except that in applying such provisions the seventieth birthday is to be substituted for the sixty-fifth birthday. Notwithstanding any other provision of law or regulations the Secretary under such terms and conditions as the Secretary determines to be reasonable and practicable and upon written application and payment of the required premiums, reserves, or other necessary amounts made within one year from the effective date of this subsection by an insured having in force a modified life plan issued under subsection (b) or (c) of this section, including any replacement insurance issued under subsection (d) of this section or other provision of this title, can exchange such insurance without proof of good health for an amount of insurance issued under this subsection equal to the insurance then in force or which was in force on the day before such insured's sixty-fifth birthday, whichever is the greater.

(Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1148, §704; Pub. L. 88–664, §12(b), Oct. 13, 1964, 78 Stat. 1098; Pub. L. 92–193, Dec. 15, 1971, 85 Stat. 648; Pub. L. 97–295, §4(21), Oct. 12, 1982, 96 Stat. 1306; Pub. L. 99–576, title VII, §701(21), Oct. 28, 1986, 100 Stat. 3292; renumbered §1904 and amended Pub. L. 102–83, §§4(b)(1), (2)(E), 5(a), (c)(1), Aug. 6, 1991, 105 Stat. 404–406.)

#### **Editorial Notes**

#### References in Text

Section 621 of the National Service Life Insurance Act of 1940, referred to in subsec. (c), is section 621 of act Oct. 8, 1940, ch. 757, title VI, pt. I, as added Apr. 25, 1951, ch. 39, pt. II, §10, 65 Stat. 36, which was repealed and the provisions thereof reenacted as section 723 [now 1923] of this title by Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1105.

#### Prior Provisions

Prior section 1904 was renumbered section 3904 of this title.

Another prior section 1904, Pub. L. 85–857, Sept. 2, 1958, 72 Stat. 1216, related to prohibition against duplication of benefits, prior to the general revision of chapter 39 of this title by Pub. L. 91–666, §2(a), Jan. 11, 1971, 84 Stat. 1998. See section 3903 of this title.

#### Amendments

1991—Pub. L. 102–83, §5(a), renumbered section 704 of this title as this section.

Subsec. (b). Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator".

Subsec. (c). Pub. L. 102–83, §5(c)(1), substituted "1923(b)" for "723(b)", "1922(a)" for "722(a)" in two places, and "1925" for "725" in two places.

Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator".

Subsec. (d). Pub. L. 102–83, §5(c)(1), substituted "1912" for "712".

Subsec. (e). Pub. L. 102–83, §4(b)(1), (2)(E), substituted "Secretary" for "Administrator" wherever appearing.

1986—Subsec. (d). Pub. L. 99–576, §701(21)(A), substituted "the insured's" for "his" in four places, and "the insured" for "he" in two places.

Subsec. (e). Pub. L. 99–576, §701(21)(B), substituted "the insured's" for "his" and "the Administrator" for "he".

1982—Subsec. (e). Pub. L. 97–295 substituted "After June 30, 1972," for "On and after the effective date of this subsection", and substituted "subsection" for "subsections" after "plan issued under".

1971—Subsec. (e). Pub. L. 92–193 added subsec. (e).

1964—Pub. L. 88–664 designated existing provisions as subsec. (a) and added subsecs. (b) to (d).

#### **Statutory Notes and Related Subsidiaries**

#### Effective Date of 1971 Amendment

Pub. L. 92–193 provided that the amendment made by Pub. L. 92–193 is effective first day of first calendar month which begins more than six calendar months after Dec. 15, 1971.

#### Effective Date of 1964 Amendment

Amendment by Pub. L. 88–664 effective first day of first calendar month which begins more than six calendar months after Oct. 13, 1964, see section 12(d) of Pub. L. 88–664, set out as an Effective Date note under section 1925 of this title.