Evening star., 1947-11-02
for
Veterans
By Mai. Thomos M. Mol

By Maj. Thomas N. Mol
The Department OF Justice Is pre-.
pairing an appeal to the Supreme
Court on lower court decision
which, If upheld, will affect every
veteran who has national service life
insurance, and all their beneficiaries
Here's the story:
Before September 30, 1914, there
was only one way in which NsL]
beneficiaries between the ages OF 81
and 6S could get their insurance
money. This was called the life In.
come plan, with 12o installments
certain beneficiaries still can choose
it as a method of settlement.
It's like this: The beneficiary re-
ceives a certain sum of money each
month for the rest of his life. But
if the beneficiary dies before 12C
payments have been made, the con-
tingent (or seconO beneficiary Ii
guaranteed to receive the balance OF
the 120 payments.
For instance, If the beneficiary dies
after receiving so payments, the Sec
ond beneficiary will receive 10, max
ing a total Of 100.
There are no payments after the
120th unless, as I said, the benef-
ciary himself lives beyond that time
In that case they'll keep coming In
every month at the same rate until
the beneficiary dies.
The monthly payments are figured
out from what is called the American
table of mortality. They're
computed SO that II the beneficiary
lives out his expected life span. he'll
receive the entire amount of the In
surance plus little extra.
But If the beneficiary dies at an
unexpectedly early age-before the
100 payments have been made-the
entire amount Of the insurance will
not be paid out. mean, if you null
tiply the monthly payment by 100
you will not get a product equal to
the policy's face value. It'll be less.
Now then: On September 80, 1914
an amendment to the NSLI Act be-
came law. It allowed all benefici-
aries (even those already receiving
payments to change to another
method of settlement, called the re-
fund life income plan. Under this
settlement it Is guaranteed that at
least the face value of the policy
will be paid out to somebody-either
to the beneficiary or, If he dies, to
him and the second beneficiary.
In spite of this optional settlement,
one beneficiary brought suit against
the United States Government to
force the VA to increase payments
under the "120 installments certain"
plan. This beneficiary claimed that
the VA should pay a large enough
monthly payment to make certain
that the entire face value of the
policy would be paid out in 100
months.
Then. even If the beneficiary died
before 120 payments had been made,
the whole amount of the policy
would still be paid (the balance to
the second beneficiary, because the
amount of each payment times 100
would equal the face value of the
policy.
The lower court ruled in favor of
the beneficiary. It ruled that the
VA should pay monthly installments
large enough so that the first 120
would equal the value Of the insur-
ance.
Here's what will happen If the
Supreme Court upholds the decision: !:
In order to insure the payment of
the face value Of the policy in the
first 100 installments, the payments
will have to be increased. In some
cases they'll have to be increased
almost two and one-half times what
they now are. ..
Except In cases Of unexpected
death, the beneficiary in ordinary
circumstances will be in line to re-
ceive at least twice as much as the
value Of the insurance.
Fact is, the VA told me some
young beneficiaries might get as
much as four times the amount of
the insurance! At any rate, the VA
said it would cost q potential "bil-
lions of dollars" because every bene-
ficiary would choose that method of
settlement.
Until this case is decided the VA
cannot begin to compute the amount
of dividends NSLI policyholders will
get.