II

105TH CONGRESS

2D SESSION S. 2108

To amend chapter 19, of title 38, United States Code, to provide that

Service-members’ Group Life Insurance and Veterans’ Group Life Insurance under such chapter may, upon application, be paid to an insured

person who is terminally ill.

IN THE SENATE OF THE UNITED STATES

MAY 21, 1998

Mr. SPECTER (by request) introduced the following bill; which was read twice

and referred to the Committee on Veterans’ Affairs

A BILL

To amend chapter 19, of title 38, United States Code, to

provide that Servicemembers’ Group Life Insurance and

Veterans’ Group Life Insurance under such chapter may,

upon application, be paid to an insured person who is

terminally ill.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This act may be cited as the ‘‘Servicemembers’ and

5 Veterans’ Group Life Insurance Accelerated Death Bene6 fits Act’’.
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S 2108 IS

1 SEC. 2. OPTION TO RECEIVE ACCELERATED DEATH BENE2 FITS.

3 (a) IN GENERAL.—Chapter 19 of title 38, United

4 States Code, is amended by adding at the end of sub5 chapter III the following new section:

6 § 1980. Option to receive accelerated death benefits

7 ‘‘(a) For the purpose of this section, a person shall

8 be considered to be ‘terminally ill’ if such person has a

9 medical prognosis that such person’s life expectancy is less

10 than a period prescribed by regulation by the Secretary

11 of Veterans Affairs. The maximum time period prescribed

12 in regulation shall not exceed 12 months.

13 ‘‘(b) The Department of Veterans Affairs shall pre14 scribed regulations under which any terminally ill person

15 insured under Servicemembers’ Group Life Insurance or

16 Veterans’ Group Life Insurance may elect to receive in

17 a lump-sum payment a portion of the face value of the

18 insurance as an accelerated death benefit reduced by an

19 amount necessary to assure that there is no increase in

20 the actuarial value of the benefit paid, as determined in

21 regulations issued by the Secretary. The Secretary may

22 prescribe by regulation the maximum amount of the accel23 erated death benefit available under this section that the

24 Secretary finds to be administratively practicable and ac25 tuarially sound, but in no instance shall the benefit exceed

26 50 percent of the face value of the person’s insurance in
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1 force on the date the election is approved. The insured

2 may elect to receive an amount that is less than the maxi3 mum prescribed by the Secretary. The Secretary shall pre4 scribe in regulation increments in which the partial benefit

5 can be elected.

6 ‘‘(c) The portion of the face amount of the insurance

7 which was not paid in a lump sum as accelerated death

8 benefits shall remain payable in accordance with the provi9 sions of this chapter.

10 ‘‘(d) Deductions under section 1969 and premiums

11 under section 1977(c) shall be reduced, in a manner con12 sistent with the percentage reduction in the face amount

13 of the insurance as a result of payment of accelerated

14 death benefits, effective with respect to any amounts

15 which would otherwise become due on or after the date

16 of payment under this subsection.

17 ‘‘(e) The regulations shall include provisions regard18 ing the form and manner in which an application under

19 this subsection shall be made and the procedures in ac20 cordance with which any such application shall be consid21 ered.

22 ‘‘(f) An election to receive benefits under this section

23 shall be irrevocable, and not more than one such election

24 may be made by any individual, even if the individual
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1 elects to receive less than the maximum amount of acceler2 ated benefits prescribed by regulation.

3 ‘‘(g) If a person insured under Servicemembers’

4 Group Life Insurance elects to receive accelerated death

5 benefits under this section, and the insured’s

6 Servicemembers’ Group Life Insurance is thereafter con7 verted to Veterans’ Group Life Insurance as provided in

8 section 1968(b) of this title, the amount of accelerated

9 benefits paid under this section shall reduce the amount

10 of Veterans’ Group Life Insurance available to the insured

11 under section 1977(a) of this title.’’.

12 (b) Section 1970(g) of title 38, United States Code,

13 is amended by—

14 (1) striking ‘‘of benefits’’ in the first sentence

15 and inserting ‘‘Any’’ at the beginning of that sen16 tence;

17 (2) adding ‘‘an insured or’’ following ‘‘or on ac18 count of,’’; and

19 (3) adding the following at the end of the sub20 section: ‘‘Neither the amount of any payments made

21 under this subchapter nor the name and address of

22 the recipient of such payments shall be reported

23 under subpart B of chapter 61 of the Internal Reve24 nue Code of 1986.’’.
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S 2108 IS

1 (c) CLERICAL AMENDMENT.—The table of sections

2 at the beginning of chapter 19, title 38, United States

3 Code, is amended by adding the following new item after

4 the item relating to section 1979:

‘‘1980. Option to receive accelerated death benefits.’’.

5 (d) EFFECTIVE DATE.—The amendments made by

6 section 2 shall take effect 90 days after the date of the

7 enactment of this Act.

8 (e) All regulations necessary to implement these

9 amendments shall be promulgated through notice and

10 comment rulemaking in accordance with 5 U.S.C. section

11 553.

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