PROVISION OF INDEMNITY OR INSURANCE FOR INDIVIDUALS SERVING IN THE ARMED FORCES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP67B00446R000500210005-9
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 174
• Document Creation Date: December 15, 2016
• Document Release Date: October 14, 2003
• Sequence Number: 5
• Publication Date: September 9, 1965
• Content Type: OPEN

Approved For Release 200$flUm- e ' I~9i00V112ll~S~tINCE FOR
INDIVIDUALS SERVING IN THE ARMED FORCES
HEARINGS
SUBCOMMITTEE ON INSURANCE
COMMITTEE ON VETERANS' AFFAIRS
HOUSE OF REPRESENTATIVES
EIGIITY-NINTII CONGRESS
FIRST SESSION
ON
H.R. 4379, 5281, 5959, 5961, 6161, 6273, 6351, 6398,
9725,9748,100153,10272:110273,10286,10301,10312,
10395, 10399, 10410478, 10630, 10821, 10862,
Pages of all hearings are numbered cumulatively to permit a
comprehensive index at the end of the Congress. Page num-
hers lower than those in this hearing refer to other legislation.
U.S. GOVERNMENT PRINTING OFFICE
53-412 WASHINGTON : 1965
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Hearing in Senate
(Senate Hearing available
VSenate Report 619
VS. 2127 as reported will1amend,
'-Passed Senate as reported (voice)
tePassage reconsidered
/Amended on Senate Floor (voice)
,.'Passed Senate with amendment (voice)
&-S. 2127 as passed Senate
To House Veterans' Affairs
August 11
August 24
August 16
August 16
August 18
August 19
August 19
August 19
August 23
August 23
t-Hearing in the House September 8
-H. R. 10873 as reported with amendment September 15
vReport 1003 September 15
(Passed H.R. 10873 (unanimous record
vote - 360 'yeas") September 20
(.Passed S. 2127 9, riking-all--after enact- Selma a
by sFrir,vi.tiL4Me S'2J n7.Fment clause to insert
provisions of H. R.10873 September 20
H. R. 10873 was laid on the table.
 COMMITTEE ON VETERANS' AFFAIRS
Approved For Release 2003/11/04: CIA DP 0 0210005-9
W. J. BRYAN DORN, South Car)llna E. ROSS ADAIR, Indiana
JAMES A. HALEY, Florida WILLIAM H. AYRES, Ohio
WALTER S. BARING, Nevada PAUL A. FINO, New York
ROBERT A. EVERETT, Tennis see JOHN P. SAYLOR, Pennsylvania
THADDEUS J. DULSKI, New York CHARLES M. TEAGUE, California
HARRIS B. MCDOWELL, JR., Dflawaro SEYMOUR IIALPERN, New York
HORACE R. KORNEGAY, North Carolina ROBERT F. ELLSWORTH, Kansas
RAY ROBERTS, Texas JOHN J. DUNCAN, Tennessee
ROBERT T. SEC REST, Ohio
GEORGE E. BROWN, JR., California
CHARLES II. WILSON, California
DAVID E. SATTERFIELD III, Virginia
TENO RONCALIO, Wyoming
HENRY HELSTOSKI, New Jers3y
JOSEPH Y. RESNICK, New Yo it
JAMES M. IIANLEY, New York
OLIVER E. MEADOWS, Stag Director
SUBCOMMITTEES
(Chairman and Ranking Minority Member ex officio Members of all Subcommittees)
COMPENSATION AND PENSION
W. J. B IYAN DORN, South Carolina, Chairman
HORACE R. KORNEGAY, North Carolina PAUL A. FINO, New York
RAY ROBERTS, Texas CHARLES M. TEAGUE, California
TEND; RONCALIO, Wyoming JOHN 1'. SAYLOR, Pennsylvania
JAMES M. IIANLEY, New York
EDUCATION AND TRAINING
THAD)E US J. DULSKI, New Yore, Chairman
GEORGE E. BROWN, In., California SEYMOUR HALPERN, New York
WALTER S. BARING, Nevada JOHN I', SAYLOR, Pennsylvania
W. J. BRYAN DORN. Smith Canllna CHARLES M. TEAGUE, California
CHARLES H. WILSON, California JOAN .J. DUNCAN, Tennessee
HENRY HELSTOSKI, New Jersey
JOSEPH Y. RESNICK, Now Ye 'k
JAMES M. IIANLEY, Now York
HOSPITALS
JA NES A. HALEY, Florida, Chairman
WALTER S. BARING, Nevada WILLIAM II. AYRES, Ohio
ROBERT A, EVERETT, Tonne: see PAUL A. FINO, New York 7i
THADDEUS S. DULSKI, New York JOHN P. SAYLOR, Pennsylvania
HARRIS B. MCDOWELL, JR., D sawarc SEYMOUR HALPERN. New York
RAY ROBERTS, Texas ROBERT F. ELLSWORTII, Kansas
ROBERT T. SEC REST, Ohio JOHN J. DUNCAN, Tennessee
GEORGE E. BROWN, JR., California
W. J. BRYAN DORN, South Canllna
CHARLES H. WILSON, California
DAVID E. SATTERFIELD III, Virginia
HOUSING
IIARRIS B. MCDOWELL, JR., Delaware, Choirrnun
WALTER S. BARING, Nevada WILLIAM H. AYRES, Ohio
RAY ROBERTS, Texas PAUL A. FINO, New York
CHARLES II. WILSON, California SEYMOUR HALPERN, New York
DAVID E. SATTERFIELD III, Virginia ROBERT F. ELLSWORTH, Kansas
HENRY HELSTOSKI, New Jerssy JOHN J. DUNCAN, Tennessee
JOSEPH Y. RESNICK, Now Yo -k
JAMES M, IIANLEY, New York
INSURANCE
ROBERT A. EVERETT, Tennessee, Chairman
HORACE R. KORNEGAY, North Carolina CHARLES Al. TEAGUE, California
ROBERT T. SECREST, Ohio ROBERT F. ELLSWORTII, Kansas
GEORGE E. BROWN, JR., California WILLIAM-H. AYRES, Ohio
TENO'. RONCALIO, Wyoming
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Page
American Legion:
Corcoran, John J., director, National Rehabilitation Commission- 2858-2864
Murphy, Robert F., assistant director, National Legislative Com-
missxon------------------------------------------ 2858
Resolution ---------------------------------------------------- 2861
American Life Convention, the Life Insurance Association of America and
the Life Insurers Conference; Rood, Henry F__________________ 2824-2830
Berg, Brig. Gen. William W., USAF. (See Defense, Department of)
Bills considered, Subcommittee on Insurance:
Reports of agencies---------------------------------------- 2850-2856
Text ------------------------------------------------------ 2761-2809
Boggs, Hon. hale, letter---------------'--------------2809
Brown, lion. George E., Jr----------------- 2838,2844, 2855, 2863, 2-8-66,2867
Carter, IIon. Tim Loo__________________________________________ 2820,2821
Chairman, Subeomnnttee nu Insurance. (Sec Everett, lion. Robert A.)
Committee staff:
Meadows, Oliver E., staff director---------------------- 2852, 2855, 2864
Patterson, Edwin B? counsel_________________ 2845, 2852, 2855, 2856, 2864
Corcoran, John J. (See American Legion)
Corcoran Thomas. (See Marsh & McLennan)
Cuney, Miss Penn, letter ------------------------------------------- 2809
Daniels, lion, Dominick V______________ -------------------------------------- 2823, 2824
Deaths in service, material furnished by Department of Defense and
Veterans' Administration------------------------------------- 281.6-2818
Defense, Department of:
Berg, Brig. Gen. William W., USAF, Deputy Assistant Secretary of
Defense for Manpower----------------------------------- 2853-2856
Deaths in service, material related to------------------------ 2816-2818
Reports on bills --------------------------------- _--------- 2853-2856
Dependency and indemnity compensation, examples of payments to
survivors --------------------------------------------------- 281.1-2815
Disabled American Veterans: Huber, Charles L., national director of
legislation-------------------------------------------------- 2872-2874
Driver, William J. (See Veterans' Administration)
Dunaway, Carlyle M. (See National Association of Life Underwriters)
Ellsworth, Iion. Robert F------------------ 2821-2823,2828,28',36,2838,2843
Everett, lion. Robert A-------------------------------------------- 2759,
2761, 2809, 2811, 2815, 2819-2828, 2831, 2833, 2836-2838, 2841-
2848, 2850-2856, 2858, 2862-2867, 2870, 2872, 2874
Fine, Hon. Paul A--------------------------------------- 2821-2823
Gatling, William It. (See National Association of Life Underwriters)
Glass, Kenneth E., letter to lion. John R. Hansen________________ 2832, 2833
Hansen, Hon. John R., letter and statement____________________ 2831-2836
Sllnber, Charles L. (Sue Disabled American Veterans)
Insurance Department of Iowa: MacDonald, David D., actuary, letter
to IIon. John H. IIansen------------------------ _------------ 2834,2835
Insurance Subcommittee, chairman. (See Everett, lion. Robert A.)
Joelson, Hon. Charles S---------------------------------------- 2870-2872
Jones Norman D. (See Veterans of Foreign Ware)
Low, dwnrd A. (Sea American Life Convention)
Life Insurance Association of America. (See American Life Convention)
Life Insurers Conference. (See American Life Convention)
Marsh & McLennan:
Corcoran, Thomas_________________________________________ 2844,2845
Higgins, James C., vice president, letter to Department of De-
fense -------------------------------- ___--------- _---- __ 2810,2811
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67BOO446ROO0500210005-9
Page
Matsunaga, Hon. Spark M------------------------------------- 2849,2850
Meadows, Oliver E. See committee staff)
Metropolitan Life Insurance Co.: Low, Edward A. (See American Life
Convention)
Murphy, Robert F. (See American Legion)
National Association )f Life Underwriters: -
Dunaway Carlyle M., general counsel_____________ 2838-2844,2856-2858
Gatling, William If., president _______ -__ 2874
Patterson, Edwin B. (Sec committee staff)
Roberts, on. Ray_------------------------------------------ 2819,2820
Rood, Henry F. (#ee American Life Convention, the. Life Insurance As-
sociation of Amori,a, and the Life Insurers Conference)
Seerest, Hon. Robes, T------------------------------ -------- 2821-2823,
2828,2836,2838,2843,2844,2845,2852,28r,4-2856,2863,2865--2867
Stover, Francis W. (See Veterans of Foreign Wars)
Survivor benefits, examples of payments for service-connected deaths_ 2811-2815
Talmadge, Hon. Herman E., U.S. Senator_____________.__________ 27159, 2760
Teague, Ilan. Charles M------------------------ 2852,2855,2864,2866,2867
Travelers Insurance; Co., Sweet, It. F., secretary, Life Department, rider
to insurance contract_________________________________________ 2835,2836
Veterans' Administfation:
Driver, William J., Administrator of Veterans' Affairs ---------- 2850-2853
Reports on bills___________________________________________ 2850-2853
Survivor benefits, examples of payments for inservice deaths__ 2811-2815
Veterans of Foreiga Wars:
Jones, Norman D., director, National Rehabilitation Service____ 2865x2867
Stover, Francis W., director, National Legislative Service -------- 2864-2876
Rcsolutions__--------------------------------------------- 2869,28870
Wctner, Hon. Charles L--------------------------------------- 2836-2838
Yates, lion. Sidney I? ------------------------------------------- 2847,2848
Approved For Release 2003/11/04: CIA-RDP67BOO446ROO0500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
PROVISION OF INDEMNITY OR INSURANCE FOR
INDIVIDUALS SERVING IN THE ARMED FORCES
WEDNESDAY, SEPTEMBER 8, 1965
110118U OF REPRESENTATIVES,
SUBCOMMITTEE OF T1IE COMMITTEE
ON VETERANS' AFFAIRS,
Washington, D.C.
The subcommittee met at 10 a.m., pursuant to call, in room 356,
Cannon Building, lion. Robert A. Everett (chairman of the subcoln-
mittee) presiding.
Mr. EVERETT. The committee will. come to order.
I might announce that Mr. Adair, who is the ranking minority
Inember, said he would be out of town but to go right aboard.
We are meeting thus. morning to begin hearings on several bills
which have been introduced and referred to this subcommittee,
providing for an indemnity payment or insurance for individuals
serving in the Armed Forces today.
Many of these bills are keyed to combat areas, such as Vietnam,
The Senate has passed S. 2127 on this subject and. the author of that
proposal, Senator Talmadge, of Georgia, has been invited to testify
on his bill. In lieu of an appearance he has submitted Or statement
which, without objection, will be inserted at this point.
(The statement referred to follows:)
STATEMENT Or LION. Iln1RMAN E. TALMADOE, U.S. SENATOR FROM THE STAzu Or
GLonom
Mr. Chairman and my colleagues on. the Veteran's Affairs Committee, I am
deeply grateful for the opportunity to appear before the committee to testify on
baludf of S. 2127, which was introduced by our distinguished colleague, Senator
Smathers, and myself.
This bill would provide special, cost-free, indemnity life insurance for melabers
of the Armed Forces serving in areas designated as combat zones by the president.
It is retroactive to January 1, 1962, or such date as the President may determine.
With the intensified efforts of the United States to assist Vietnam in turning back
Communist aggression, it is my view, which I believe to be shared by a majority
of the. American people, that adequate protection in terms of survivors' benefits
should be provided for the families, widows, children, dependents, or parents of
servicemen who lose their lives in this eon Wet.
Since January 1, 1962, approximately 850 American fighting men have honored
their country for the cause of freedom and democracy with the supreme sacrifice
on the battlegrounds of Vietnam. And with our military operations in this
strife-torn country being expanded, it is unfortunate, but certain, that (,here.
will be many more American lives lost in this war. I remind you that troop
requirements in Vietnam are now placed at 125,000 m.en, and not-too-distant
projections indicate a total far in excess of that number. Furthermore, the,
Congress earlier this session appropriated an additional $700 million to support
the war and will soon be called upon. to authorize an even further expenditure
estimated in the billions. Again, I point out that the draft has doubled and
studies are being made to determine whether Reserve units should be reactivated.
2759
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2760 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
Although the Congress cannot guarnntce U.S. servicemen preservation of life
and limb in battle, we can, and shoull, afford them peace of mind by assuring
them that in the event of their death, treir loved ones back home will be provided
some measure of economic security. At the present time, American soldiers,
sailors, and marines serving in Vietnam do not have such peace of mind. Unless
they have been able, at great persona, cost, to secure private life insurance, the
future well-being and means of support of their families stand in great danger.
The serviceman bound for Nieman finds it extremely difficult to find life
insurance that he can buy to cover hmself against the hazards there. Even if
he is successful in finding an insurer, the cost is virtually prohibitive and the
coverage grossly inadequate. At least one of the Nation's larger life insurance
companies already has inserted "no pa oucnt" clauses in new policies of service-
men assigned to duty in Vietnam. Other are restricting the amount of coverage
and a great many are considering the issuance of emasculated policies with "as
of now" clauses. From the company a standpoint, it is simply not economically
feasible to underwrite insurance on it Vietnam combatant.
Unless the Federal Government assumes this responsibility, as it should, the
need for insurance protection of American combat servicemen will go unful-
filled. A member of the armed services today, who may be sent to fight for his
country in the jungles of Vietnam, cr to the Dominican Republic, or to some
other battlefield in the world where his duty is needed to protect American
interests, is not treated as kindly in -;his regard as was his World War 1, World
War II, and Korean war counterpart, as a comparison of death benefits reveals.
For the World War I and World War II servicemen, death compensation was
fixed at $130 it month, and subsequently increased to $150 for a widow with two
minor children. For the Korean war servicemen, the amount was $150 monthly.
Unfortunately, the widow of % Vietnam veteran is provided no death compensation
benefits other than those now held be, every other member of the armed services,
and there, is utterly no distinction between the servicemen who may be engaged
in a peaceful mission and those who are engaged in hostilities with death as a
constant companion.
National service life insurance provided $39 a month for life to a surviving
widow of the Two World War veterans. Servicemen's indemnity, held by
Korean war servicemen, was payable over a ported of 10 years at the rate of
$92.90 per month. For the Vietnam servicemen there is neither contract insur-
ance such as NSLI nor servicemen's indemnity.
In addition to a death gratuity, which was given to widows of both World
Wars and Korea, and social security benefits, which were payable to Korean
widows, the Vietnam widow has only dependency and indemnity compensation
to sustain her.;
Dependency and indemnity compensation is computed at the rate of $120
monthly plus '..12 percent of the dccoased's adjusted base pay. The minimum
payment is set at $130 monthly and graduated on a scale reflecting higher rank
and longer tenure of service. Payments may be increased where there are two
or more children, up to $28 for each child in excess of one, depending on amounts
to which the family may be entitl3d under certain social security and railroad
retirement provisions.
However, and this point dosor.res emphasis, the above mentioned benefits
payable upon he death of a serviceman iii. Vietnam, are equally payable upon the
death of a serviceman who dies of pneumonia at Fort Burning or any other
member of the armed services, regtrdless of where he may serve or the character
of his duty at the time of death.
Completely ignoring precedent, t he Government at the present time has failed
to provide life insurance benefits fir servicemen now fighting in Vietnam, or for
those who may be called upon to take up arms for the United States at some
other time, in some other part of tae world.
It has always been the policy of the Federal Government in time of war to
provide special cost-free, life insurance for American servicemen.. This is as it
should be, for I am sure the committee will agree that there should be a greater
premium on the life of a serviceman engaged in armed conflict in behalf of his
country, than for those who are engaged in nonhazardous duty where the threat
of injury or death is almost nonexistent.
Although the United States is n )t presently engaged in a declared war in South
Vietnam, it is war nonetheless in virtually every sense of the term. American
fighting men are being sent there by the thousands daily, and they are losing their
lives daily. i I contend, Mr. Chair nan, that we should do no less for the American
servicemen to Vietnam than we dd for American men who fought in Europe and
the Pacific, or in Korea.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/0414dzWLafWRft7 ?5ig00119oewD FORCES 2761
Mr. EVERETT. All of the authors of pending proposals have been
notified of these hearings, and have been invited to testify in person
or submit a statement.
Without objection, I will include at this point in the record the text
of the bills and certain other pertinent data on this general subject.
(The document referred to follows:)
[H.R. 4379, each Cong., '1st sess.]
A BILL To amend title 38, United States Code, to provide free insurance protection for members of the
Armed Forces serving outside the United States
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That part II of title 38, United States Code, is
amended by inserting immediately after chapter 17 thereof the following new
chapter:
"CHAPTER 18-OVERSEAS SERVICEMEN'S INDEMNITY
"See.
663. Definitions.
"651. Coverage provided.
"662. Beneficiaries of insurance.
"633. Waiver of premiums on other insurance.
650. Definitions
"For the purposes of this chapter-
"(1) The term 'child' does not include a stepchild unless the stepchild either
was a member of the insured's household, or was designated as a beneficiary under
this chapter by the insured, and the term does not include an illegitimate child
unless the child was designated as a beneficiary under this chapter by the insured.
"(2) The term 'parent' includes a stepparent if designated as a beneficiary
under this chapter by the insured; and only includes the mother and father who
last bore that relationship to the insured.
"(3) The terms 'brother' and `sister' include those of the halfblood and those
through adoption.
"(4) The term 'United States', when used in a geographical sense, means the
several States and possessions of the United States, the District of Columbia,
and the Commonwealth of Puerto Rico.
"? 651. Coverage provided
"(a) Each member of the Armed Forces on active duty outside the United
States after the date of enactment of this chapter is automatically insured by the
United States, without cost to such member, against death on active duty while
outside the United States.
"(b) The insurance provided by subsection (a) shall be in the amount of $10,000,
reduced by the amount of United States Government life insurance or national
service life insurance held by the insured and in force at the time of his death.
652. Beneficiaries of insurance
"(a) Upon certification by the Secretary concerned of the death of any member
insured under section 651 of this title, the Administrator shall pay the insurance
only to the surviving spouse, children, parents, or brothers and sisters of the
insured. The insurance shall be paid in a lump sum.
"(b) The insured may designate the beneficiaries of the insurance within the
classes named in subsection (a); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes with-
out their consent.
"(c) If a designated beneficiary does not survive the insured, or if none has
been designated, payment shall he made to the first eligible beneficiary among
the classes and in the order named in subsection (a) ; and if the class is composed
of more than one individual, payments shall be made in equal shares among such
individuals.
"(d) No payments shall be made under this chapter to the estate of any
deceased individual.
653. Waiver of premiums on other insurance
"(a) Any member of the Armed Forces may apply for, and shall be granted,
waiver of premiums under this section on any policy of national service life
Approved For Release 2003 4fUc: GlA4r4GF%1 94146RN08 Y0i2RoM fqr periods during which
 Approved For sel2OD ht1O4)RCtA RWBOO44fROQaWOZtM?-9
lie is outside the United States. Any such waiver shall render the insurance
nonparticipating while the waiver is in effect.
"(b) While any waiver of premiums is in effect under this section-
''(1) all premiums on fve-year level premium term insurance shall be
waived; and
"(2) the portion of premiums on all other insurance which represents the
pure insurance risk shall le waived;
effective as of the first day of thl first calendar month beginning after the member
is first outside the United States, and ending as of the last day of the first calendar
month beginning after he thereafter enters the United States.
"(c) Where, benefits under any policy of insurance under waiver of premiums
under this) section become payable, liability for such benefits shall be borne by the
United States in an amount which, when added to any reserve of the policy at the
time of maturity, will equal the then value of such benefits. Computations of
such benefits shall be based upon the same tables and rates of interest as apply
with respect to the policy involved. The Administrator shall from time to time,
transfer from the national service life insurance appropriation to the national.
service life insurance fund, and 'roc the military and naval insurance appropria-
tion to the United States Cove'nment life insurance fund such sums as may be
necessary to carry out this subsection."
She. 2. (a) The table of chapters at the head of chapter 11 of title 38, United
States Code, is amended by inserting immediately below the line beginning "17."
the following:
"18. Ovorseasi Sorvicomon's indem.aity."
(b) The table of chapters at the head of title 38, United States Code, is
amended by inserting immediately below the line beginning ''19." the following:
"19. Overseas!Scrvicemen's Indemnity."
[It.n, 5281, 89th Cong., 1st sees.l
A HILL 'lo authorize wartime occults under certain circumstances for peacetime veterans and their
dependents
Be it en4eted by the Senate and Ilotese of Representatives of the United States of
America in Congress assembled, That (a) paragraph (11) of section 101 of title 38,
United States Code, is amended to read as follows:
"(11.) The term 'period of wa' means (A) the Spanish-American War, World
War I, World War II, the Korean conflict, (B) the period beginning on the date of
any future declaration of war by the Congress and ending on a date prescribed by
Presidential proclamation or concurrent resolution of the Congress, and (C) any
period of hostilities."
(b) Section 101 of such title is amended by adding at the end thereof the
following now paragraphs:
"(29) The term 'area of hostilities' means any area designated by the President
as an area of hostilities pursuant to the authority granted him under section 3111
of this title.
"(30) The term. 'period of hostilities' means, with respect to any area of hos-
tilities, the period of time during which such area has been designated an area of
hostilities pursuant to section 3111 of this title; but, for the purposes of this title,
a veteran shall be considered to have served during a period of hostilities only if
such veteran served at some time during such period in an area of hostilities, or
if he sitfferkhd an injury or contracted a disease in line of duty or aggravated a
preexisting! injury suffered or disease contracted in line of ditty while on route to
or return from an area of hostilities."
St;c. 2.(a) Section 521(a) of title 38, United States Code, is amended by striking
out "or the Korean conflict," an I inserting in lieu thereof "the Korean conflict,
or a period of hostilities,".
(b) Section 521(g) of such title. is amended by-
(1) redesignating clauses (2), (3), and (4) as clauses (3), (4), and (5),
respect)vely, and adding a new clause, (2) after clause (1) as follows:
"(2) for a period of ninety consecutive days or more any part of which was
served during a period of hostilities;"; and
(2) by striking out "or the Korean conflict," in clause (3), as redesignated
by this, subsection, and inserting in lieu thereof "the Korean conflict, or a
period of hostilities,".
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11idX d1L 9b 7' 3UU4 6 (8~0~ 0015 9 FORCES 2763
(c) The catehline of section 521 is amended to read as follows: "Veterans of
World War I, World War IT, the Korean conflict, or a period of hostilities".
(d) Section 541(a) of such title is amended by striking out "or the Korean con-
flict" and inserting in lieu thereof "the Korean conflict, or a period of hostilities".
(e) The eatchline of section 541 is amended by adding at the end thereof the
following: ", and widows of veterans of a period of hostilities".
(f) Section 542(a) of such title is amended by striking out "or the Korean
conflict" and inserting in lieu thereof "the Korean conflict, or a period of hostili-
ties".
(g) The eatchline of section 542 is amended by adding at the end thereof the
following: ", and children of veterans of a period of hostilities".
(h) The heading which precedes section 541 of such title is amended to read as
follows:
"WORLD WAlt I, WORLD WAR IT, TIIE KOREAN CONFICT, AND ANY PERIOD OF
HO5TILI'rIEs".
(i) The table of sections at the. beginning of chapter 15 of such title is amended
by-
(1) striking out
"521. Veterans of World War I, World War II, or the Korean conflict."
and inserting in lieu thereof the following:
"521. Veterans of World War I, World War IT, the Korean conflict, or a period of hostilities.";
(2) striking out the heading which reads
"World War I, World War IT, and the Korean Conflict"
and in inserting in lieu thereof
"World War I, World War II, the Korean Conflict, and any Period of Ilostilities";
(3) striking out
"541. Widows of World War I, World War IT, or Keratin conflict veterans.
11542. Children of World War I, World War II, or Korean conflict veterans:'
and inserting in lieu thereof
"541. Widows or World War I, World War IT, or Korean conflict veterans, and widows of veterans of a
period of hostilities.
"642, Children World War IT, or Korean conflict veterans, and children of veterans of a
period of World War I,
pod of hostilities."
SEC. 3. Section 602 of title 38, United States Code, is amended by-
(1) striking out "World War II or of the Korean conflict" and inserting in
lieu thereof "World War II, the Korean conflict, or a period of hostilities";
and
(2) inserting immediately before "shall be deemed" the following: "or
within a period of two years following the last day of his service in an area of
hostilities, in the case of a veteran of a period of hostilities,".
SEC. 4. (a) Section 723(b) of title 38, United States Code, is amended by striking
out "Any" at the beginning of such section and inserting in lieu thereof the,
following: "Any veteran of a period of hostilities shall, upon application in writing
made within one hundred and twenty days after such veteran's discharge or
release from the Armed Forces following his service in an area of hostilities and
` payment of premium as hereinafter provided, and without medical examination,
be issued a policy of permanent plan life insurance or a policy of limited con-
vertible five-year level premium term insurance under this subsection; and any".
(b) Section 723(6) of such title is further amended by adding at the end thereof
a new sentence as follows: "Any veteran of a period of hostilities who was dis-
charged or released from the Armed Forces prior to the date of enactment of this
sentence shall, upon application made in writing within one hundred and twenty
days after the date of enactment of this sentence and payment of premiums, and
without medical examination, be issued insurance as provided in this subsection."
SEe. 5. Section 1502(a) (1) of title 38, United States Code, is amended by
striking out "World War II or the Korean conflict" and inserting in lieu thereof
"World War II, the Korean conflict, or a period of hostilities".
SEC. 6. (a) Section 1601(a) (1) of such title is amended by adding at the end
thereof a new sentence as follows: "Such term., in the oast, of a veteran of a period
of hostilities, means the period commencing with the veteran's most recent entry,
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 2764 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
Approved For Release 2003/11/04: CIA-RDP67BOO446R000500210005-9
enlistment, or call to active duty prior to his service in an area of hostilities and
ending on the date of his first discharge or release from active duty after his
service in such area."
(b) Section 1601(a)(2) of such title is amended by-
(1) inserting immediately before the semicolon at the end of clause (A.)
the:following: or a period of hostilities"; and
(2) striking out in clause (C) "Korean conflict," and inserting in lieu
thereof "Korean conflict or a period of hostilities,".
(c) Section 1601(c) of such title is amended by inserting "or a period of host1-
ities" immediately after "Korean conflict".
(d) Section 1.612(c) of such title is amended by adding at the end thereof' A
new sentence as follows: In the case of a veteran of a period of hostilities the date
of discharge or release shall, or the purposes of this section and section 1613 of
this title, be the. actual date o the veteran's discharge or release from active duty
or the date of enactment of this sentence, whichever is later."
(e) Section 1613(a) of such title is amended by inserting a comma in lieu of the
period it the end thereof and adding the following: "in the case of any veteran
whose eligibility is based upon service during the Korean conflict, or after January
31, 1972, in the case of any veteran whose eligibility is based upon service during
a period of hostilities."
(f) Section 1631 of such title is amended by adding at the end thereof a new
subsection as follows: -
"(d) No educational and training allowance shall be paid for any period of
education or training completed prior to the date of enactment of this subsection
to a veteran whose eligibility for benefits under this chapter is based upon service
during a period of hostilities."
(g) The chapter heading a; the beginning of chapter 33, of title 38, United
States Code, is amended to road as follows:
"CHAPTER 33-EDUCATIC-N OF KOREAN CONFLICT VETERANS AND
VETERANS OF A PERIOD OF HOSTILITIES"
(h) The table of chapters at the beginning of part III of such title is amended ley
striking out
1133. Education of Korean Conflict Vet Iran"
and inserting in lieu thereof
1133. Educgtion of Korean Conflict Veterans and Veterans of a Period of hostilities"
(i) The table of chapters at the beginning of such title is amended by striking
out
":13. EDUCATION OF KOREAN CONFLIc' VETERANS"
and inserting in lieu thereof
"33. EDUCATION OF KOREAN CONFLIC' VETERANS AND VETERANS OF A PERIOD OF [IOSTILITIES".
SEC. 7. (a) Chapter 37 of title 38, United States Code, is amended by inserting
immediately after section 1814 the following new section:
"? 1818.! Veterans of a period of hostilities
"(a) Each veteran who served on active duty during a period of hostilities shall
be eligible for the benefits of this chapter, subject to the provisions of this section,
if his total service was for a period of ninety days or more, or if he was discharged
or released from a period of active duty, any part of which was served during a
period of hostilities, for a serv ice-connected disability.
"(b) No veteran shall be eligible for benefits under this section so long as he
is eligible under this chapter for any unused benefits derived from service during
World War II or the Korean conflict. Any veteran who is eligible for benefits
under this section and who his obtained benefits under this chapter by reason
of service during World War II or the Korean conflict shall have his benefits
under this section reduced by- the amount of an benefits previously obtained
under this chapter. Benefits shall not be afforded under this section to any
individual on account of service as a commissioned officer of the Coast and Geo-
detic Survey, or the Regular cr Reserve Corps of the Public Health Service.
"(c) Loans may be made o_ guaranteed under this section in the case of any
eligible veteran if made not more than ten years from the date of such veteran's
discharge or release from his last period of active ditty, any part of which oc-
eiirred during the period of hostilities on which his eligibility is based, plus alu
additional period equal to on,- year for each three months of active duty per-
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2765
formed by the veteran in such area of hostilities, except that entitlement shall
not continue in any case after January 31, 1985, nor shall entitlement expire in
anry case prior to January 31, 1975.
(d) If a loan report or an application for loan guaranty relating to a loan
authorized by this section is received by the Administrator before the date of the
expiration of the veteran's entitlement, the loan may be guaranteed or insured
pursuant to the provisions of this section after such date; and if a commitment
for a direct loan is issued by the Administrator on or before the date of expiration
of the veteran's entitlement, the loan may be made after such date."
(b) The table of sections at the,, beginning of chapter 37 of such title is amended
by inserting below
"1817. Boleaseftmnliability raider gaaraaty."
the following:
"1818. Veterans of a period of hostllitios."
Sue, S. (a) Section 1901 (a) of title 38, United States Code, is amended by
striking out "or the Korean conflict" and inserting in lieu thereof ", the Korean
conflict, or a period of hostilities.".
(b) Section 1905 of such title is amended by adding at the end thereof a now
sentence as follows: In the case of any veteran whose eligibility under this chap-
ter is based upon service performed during it period of hostilities and whose ditto
of discharge or release from active military, naval, or air service preceded the date
of enactment of this sentence, the five-year period referred to in the first sentence
of this section shall not begin to run until such date of enactment,"
SEc. 9. (a) Section 2101(a) of title 38, United States Code, is amended by
inserting immediately after "Korean conflict" the following: "or a period of
hostilities".
(b) Section 2101(b)(1) of such title is amended by striking out "if he is a coln-
missioned officer," and inserting in. lieu 'thereof "if he is it commissioned officer
whose eligibility under this chapter is based upon service during the Korean
conflict,".
(c) Section 2102(a) of such title is amended by- -
(1) striking out "Mustering-out payment for persons eligible tinder
section 2101 of this title shall be in sums as follows:" and inserting in lieu
thereof the following: "(1) Mustering-out payment for persons whose
eligibility under section 2101 of this tile is based on service during the Korean
conflict shall be in sums as follows;";
(2) redesiguating paragraphs 11), (2), and (3) its subparagraphs (A), (B),
and (C), respectively; and
(3) adding at the end thereof a new paragraph as follows:
"(2) Mustering-out payments for persons whose eligibility under section.
2101 of this title is based on service during a period of hostilities shall be in
the sum of $300.".
(d) Section 2102(b) of such title is amended by-
(1) striking out in the first sentence "(a) (1)" and inserting in lieu thereof
11(a)(1)(A) or (a)(2)";
(2) striking out in the second sentence "(u)(2)" and inserting in lieu thereof
"(a) (B)"; and
(3 striking out in the third sentence "(a) (3)" and inserting in lieu thereof
I (a)(1)(C)''
(o) Section 2104 of such title is amended by-
(1) striking out in the first sentence "entitled to mustering-out payment"
and inserting in lieu thereof "entitled to mustering-out payment by virtue
of service performed during the Korean conflict and"; and
(2) inserting after the first sentence a new sentence as follows: "Any
member of the Armed Forces entitled to mustering-out payment by virtue
of service performed during a period of hostilities and who was discharged or
relieved from active duty under honorable conditions prior to the date of
enactment of this sentence shall, if application therefor is made. within
two years after the date of enactment of this sentence, be paid such payment
by the Secretary concerned beginning within one month after application
has been received and approved."
SEO. 10. Chapter 53 of title 38, United States Code, is amended by adding
at the end thereof a new section as follows:
3111. Authority of President To Designate Areas of Hostilities
"In order that certain provisions of this title, applicable only to veterans
who perform service during wartime, may be applicable to veterans who have
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2766 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
been called upon, during periods when the United States is not engaged in a for-
mally declared war, to servo in areas of the world in which armed conflict or
other warlike conditions exist, the President is authorized to designate by 1
Executive order any area of the world outside the United States as an area of
hostilities, if he finds (1) that members of the Armed Forces will be called upon
to serve in such area, and (2) ;h t while serving [it such area members of the
Armed Forces are likely to bo subjected to armed eon (Vet or similar hazardous,
warlike conditions. In designating any area of the world as an. area of hostilities
the President shall identify suet area in geographic terms and shall, for purposes.,
of benefits under this title, specify the date on which such area becomes an area
of hostilities, and, at such time as he finds that members of the Armed Forces ate,
no longer serving in such. area or that warlike conditions no longer exist in such
area, specify the date on which such area cease to be an area of hostilities."
A BILL T&`amend tale as, United Stotts Code, to provide a program of death intlernnirioation for porson
serving in. combat zones
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 10t of title 38, United States Code, is
amende by addin~ at the one thereof the following:
"(20) The term. combat zone' means any area determined by the President to
be an area in which units of to Armed Forces of the United States are engaged
in combat operations on or after the date of enactment of this paragraph and
before such date as may be determined by Presidential proclamation. Such
term Specifically includes the countries of Laos, Cambodia, and Vietnam, until the
President determines that such countries are no longer 'combat zones'."
Sc. u2. (a) Part 11 of title 38, United States Code, is amended by inserting
immediately after chapter 17 thereof the following new chapter:
"CHAPTER '18---COMBAT SERVICEMEN'S INDEMNITY
"Sec.
?'860, Definitions,
"061. Coverage irovidod.
662, Beneficiaries of lesurunee.
"653, Waiver ofpromimns on other hrsurance.
650.: Definitions
"For the purposes of this chapter-
"(1) The form `child' does not include it stepchild unless the stepchild either
was a member of the insureri's household, or was designated as a beneficiary un'tler
this chapter by the insured, and the term does not include an illegitimate child
unless the child was designai oil as a beneficiary under this chapter by the insured.
"(2)j The term 'parent' includes a stepparent if designated as a beneficiary
under,this chapter by the insured; and only includes the mother and father who
last bore that relationship to the insured.
"(3) The terms 'brother' and `sister' include those of the haliblood and those
throe h adoption.
"(4) The term `United States', when used in a geographical sense, means the
several Stator and possessiens of the United States, the District of Columbia, and
the Commonwealth of Putu to Rico.
651. Coverage provided
"(a) Each member of the Armed Forces on active duty in a combat zone. after
the, date of enactment of this chapter is automatically insured by the Tinted
States, without cost to such member, against death on active duty while in a
combat zone and for one hundred aunt twenty days thereafter.
"(b) The insurance provided by subsection (a) shall be in the. amount of
$10,000, reduced by the amount of United States Government life insura?nec
national service life. insurance, and commercial life insurance held by the insured
and in force at the time of his death.
652. Beneficiaries of irsmance
"(a) Upon certification by the Secretary concerned of the death of any member
insured under section 651 of this title, the Administrator shall pay the insurance
only to the surviving spiuse, children, parents, or brothers and sisters of the
insured. The insurance e,hall be paid in a lump sum.
 Approved For Release 20031' N'6TA?I*bObI 49ftd73gt)d2"08'VcEs 2767
"(b) The insured may designate the beneficiaries of the insurance within the
classes named in subsection (it); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes without
their consent. _
"(c) If a designated beneficiary does not survive the insured, or if none has
been designated, payment shall be made to the first eligible beneficiary among
the classes and in the order named in subsection (a); and if the class is composed
of more than one individual, payments shall be made in equal shares among such
individuals.
"(d) No payments shall be made under this chapter to the estate of any
deceased individual.
653. Waiver of premiums on other insurance
"(a) Any member of the, Armed Forces may apply for, and shall be granted,
waiver of premiums under this section on any policy of national service life in-
surance or United States Government life insurance for periods during which
he is in a combat zone and for one hundred and twenty days thereafter. Any
such waiver shall render the insurance nonparticipating while the waiver is in
effect.
"(b) While any waiver of premiums is in effect under this section-
"(1) all premiums on five-year level premium term insurance shall be
waived; and
11(2) the portion of premiums on all other insurance which represents the
pure insurance risk shall be waived;
effective as of the first day of the first calendar month beginning after the member
first servos in it combat zone, and ending as of the last day of the first calendar
month beginning more than one hundred and twenty days after lie leaves it combat
zone.
"(c) Where benefits under any policy of insurance, under waiver of premiums
under this section become payable, liability for such benefits shall be borne by the
United States in an amount which, when added to any reserve of the policy at the
time of maturity, will equal the then value of such benefits. Computationsof
such benefits shall be based upon the same tables and rates of interest as apply
with respect to the, policy involved. The Administrator shall from time to time,
transfer from the national service life insurance appropriation to the national
service life insurance fund, and from the military and naval insurance appropria-
tion to the United StatesGovernment life insurance fund such sums as may be
necessary to carry out this subsection."
(b) The table of chapters at the head of chapter 11 of title 38, United States
Code, is amended by inserting immediately below- the line beginning "17." the
following:
"1,8. Combat servicemen's indemnity."
(e) The table of chapters at the head of title, 38, United Slates Code, is amended
by inserting immediately below the line beginning "17." the following: -
"18, Conthat servicemen's indemnity." -
pLR. 5901, 89th cong., lit sees.] -
AT ILL To amend title 38 of the United status Code to provide a program of bunranco for members of the
Armed porous who are ratable to obtain emnnmreial insurance at standard rates because of being ,..signed
to duty in a annbat zone or Performing extrah ae ardous duty
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That (a) subchapter I of chapter 19 of title 38,
United States Code, is amended by adding at time cad thereof Be following new'
section:
? 726. Insurance for certain members of the Armed Forces
" (a) Any member of the Armed Forces who makes application in writing to
the Administrator in such form as the Administrator proser]bcs and establishes
to the satisfaction of the Administrator that he cannot obtain commercial life
insurance at a standard rate -
"(1) because of the nature of the duties he performs, as such a member, or
"(2) covering him in any place to which, he may be ordered its such a
member,
shall, upon payment of the required premiums, be issued insurance under this
Approved For Release (2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For ReleaW,lO i4tW t1AHRDP637zF04t%ROm8S06 OOO54CES
'(b) Insurance issued under this section shall be issued upon the same term:,
and conditions as are contained in the standard policies of national service life
insurance except that (1; limited convertible term insurance may not be issued or
renewed on the total phur after the insured's fiftieth birthday; (2) the premium
rates for such limited convertible term or permanent plan insurance shall be based
on table X-18 (1950-54 Intercompany Table of Mortality) and interest at the
rate of 2% per centum pe., annum; (3) all settlements on policies involving annuities
on insurance issued under this section shall be calculated on the basis of The
Annuity Table for 1949 and interest at the rate of 2) per centum per annum;
(4) all cash, loan, paid-u3, and extended values, and, except as otherwise provided
in this section, all. other calculations in connection with insurance issued under
this section shall be bagel on table X-18 (1950-54 Intercompany Table of Mortal-
ity) and interest at the :ate of 2ya per centum per annum; (5) insurance and any
total disability provision added thereto issued under this section shall be on a
nonparticipating basis Ind all premiums and other collections therefor shall be
credited directly to a revolving fund established in the Treasury of the United
States and payments on such insurance and any total disability provision added
thereto shall be made directly from such fund.
"(c) There are authorized to be appropriated such sums as may be required to
provide capital for such revolving fund. Such appropriations shall be advanced
ton the revolving fund its needed and shall bear interest as determined by the
Secretary of the Treasury, taking into consideration the average yield on all
marketable interest-bef.ring obligations of the United States of comparable
maturities then forming a part of the public debt and shall be repaid to the Treasury
over a reasonable perioc of time.
'(d) The Administrator is authorized to set aside out of the revolving fund
established under subsection (b) of this section such reserve amounts as may be
required under accepted actuarial principles to meet all liabilities on insurance
issued under this seetim and any total disability income provision aiitached
thereto. The Secretary of the Treasury is authorized to invest in and to sell
and retire special interest-hearing obligations of the United States for the account
of the revolving fund. Such obligations issued for this purpose shall have matu-
rities fixed with due re;ard for the needs of the fund and shall bear interest at
a rate equal to the an erage market yield (computed by the Secretary of the
Treasury on the basis of market quotations as of the end of the calendar month
next preceding the dat: of issue) on all marketable interest-bearing obligations
of the United States then forming a part of the public debt which are not due
or callable until after tic expiration of four years from the end of such calendar
month; except that wl ere such average market yield is not a multiple of one-
eighth of 1 per contain, the rate of interest of such obligation shall be the multiple
of one-eighth of 1. per centum nearest such market yield.
"(c) The insurance provided by this section shall be in the amount of $10,000,
reduced by the amount of United States Government life insurance, national
service life insurance, f,nd commercial life insurance held by the insured and in
force at the time of hit death."
i (b) The analysis of subchapter I of chapter 19 of title 38, United States Code,
is amended by adding it the end thereof the following:
' 26. Insurance for certain me tubers of the Armed Forces."
Site. 3. The amendrrents made by this Act shall take effect on the sixtieth
day after the date of its enactment.
[II. It. 6161, 89th Cong., lit suss.]
A BILL To amend title 38, l failed States Code, to provide wartime rates of disability compensation for
veterans disabled from injury or disease incurred or aggravated by overseas service and free insurance
protection for members of tl ae Armed Forces serving overseas
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 336 of title 38, United States Code, is
amended by striking out "or (3)" and inserting in lieu thereof "(3)", and by
inserting immediately zefore the period at the end thereof the following: ", or (4)
after the date of enactment of this clause and while performing active duty out-
side the continental United States Hawaii, the Commonwealth of Puerto Rico,
and the possessions of the United States".
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCER 2769
Sc. m2. (a) Part II of title 38, United States Code, is amended by inserting
immediately after chapter 17 thereof the following new chapter:
"For the purposes of this chapter-
"See
.
.
2650, Definitions.
51. Coverage provided.
652. Beneficiaries of insurance.
663, waiver of premiums on other insurance.
650. Definitions
"(1) The term 'child' does not include a stepchild unless the stepchild either
was a member of the insured's household, or was designated as a beneficiary under
this chapter by the insured, and the term does not include an illegitimate child
unless the child was designated as a beneficiary under this chapter by the insured.
"(2) The term 'parent' includes a stepparent if designated as a beneficiary under
this chapter by the insured; and only includes the mother and father who last bore.
that relationship to be insured.
"(3) The terms 'brother' and 'sister' include those of the halfblood and those
through adoption.
"(4) The term 'United States', when used in a geographical sense, means the
several States and possessions of the United States, the District of Columbia,
and the Commonwealth of Puerto Rico.
651. Coverage provided
"(a) Each member of the Armed Forces on active duty outside the United
States after the date of enactment of this chapter is automatically insured by
the United States, without cost to such member, against death on active duty
while outside the United States.
"(b) The insurance provided by subsection (a) shall be in the amount of
$10,000, reduced by the amount of United States Government life insurance or
national service life insurance held by the insured and in force at the time of
his death.
652. Beneficiaries of insurance
"(a) Upon certification by the Secretary concerned of the death of any member
insured under section 651 of this title, the Administrator shall pay the insurance
only to the surviving Spouse, children, parents, or brothers and sisters of the
insured, The insurance shall be paid in it lump sum.
"(b) The insured may designate the beneficiaries of the insurance within
the classes named in subsection (a); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes with-
out their consent.
"(c) If a designated beneficiary does not survive the insured, or if none has been
designated, payment shall be made to the first eligible beneficiary among the
classes and in the order named in subsection (a); and if the class is composed of
more than one individual, payments shall be made in equal shares among Such
individuals.
"(d) No payments shall he made under this chapter to the estate of any
deceased individual.
"? 653. Waiver of premiums on other insurance
"(a) Any member of the Armed Forces may apply for, and shall be granted,
waiver of premiums under this section on any policy of national service life
insurance or United States Government life insurance for periods during which he
is outside the United States. Any such waiver shall ronder the insurance non-
participating while the waiver is in effect.
"(b) While any waiver of premiums is in effect under this section-
"(1) all premiums on five-year level premium term insurance shall be
waived; and
"(2) the portion of premiums on all other insurance which represents the
pure insurance risk shall be waived;
effective as of the first day of the first calendar month beginning after the member
is first outside the United States, and ending as of the last day of Lho first calendar
month beginning after he thereafter enters the United States.
"(o) Where benefits under any policy of insurance under waiver of premiums
under this section become payable, liability for such benefits shall be borne by the
United States in an amount which, when added to any reserve of the policy at the
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2770 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
time of maturity, will elual the then value of such benefits. Computations of
such benefits shall be, bleed upon the same tables and rates of interest as apply
with respect to the polity involved. The Administrator shall from time to time
transfer from the national service life insurance appropriation to the national
service life insurance fund, and from the military and naval insurance appropria-
tion to the United States Government life insurance fund such suers as may be
necessary to carry out this subsection."
(b) The table of chapters at the head of part II of title 38, United States Code,
is amended by inserting immediately below the line beginning "97." the following:
"is. Overseas Servicemen's Ineeinntty."
(c) The table of chapters at the head of title 38, United States Code, is
amended by inserting immediately below the line beginning "17." the following:
1118. Overseas Servicemen's Indemnity."
A BILL To amend 000 38 of i he United States Code to provide a Program of insurance for members of the
Armed Forces who sic unable to obtain commercial insurance at standard rates because of befr g assigned
to duty in a combat zone or performing extrahazerdous duty
Be it enacted by the Senate and House of Representatives of the United Slates of
America in Congress assembled, That (a) subchapter I of chapter 19 of title 38,
United States Code, is amended by adding at the end thereof the following new
section:
? 726. Insurance for certain members of the Armed Forces
" (a) Any member of the Armed Forces who makes application in writing to
the Administrator in inch forte as the Administrator prescribes and establishes
to the satisfaction of the Administrator that lie cannot obtain commercial life
insurance at a standard rate`
"(I) because of the nature of the duties he performs as such a cnenrber, or
"(2) covering 'rim in any place, to which he may be ordered n.s such a
member,
shall, upon payment of the required premiums, be issued insurance under this
section.
(b) Insurance iss'ied under this section shall be issued upon the same terms
and conditions as arr contained in the standard policies of national service life
insurance except tha. (1) limited convertible term insurance may not be issued
or renewed on the teem plan after the insured s fiftieth birthday (2) the premium
rates for such limited convertible term or permanent plan insurance shall be
based on table X-18 (1950-5:3 Intercompany Table of Mortality) and interest
at the rate of 2% pe centtern per annum (3) all settlements on policies involving
annuities on. insuran rc issued under this section shall be calculated on the basis of
The Annuity Table for 1949, and interest at the rate of 2- per eentum per annum ;
(4) all cash, loan, pa d-up, and extended values, and, except as otherwise provided
in this section, all other calculations in connection with insurance issued under this
section shall be based on table X-18 (1950-54 Intercompany Table oft Mortality)
and interest at the rate of 2% per centum per annum; (5) insurance and any
total disability prolision added thereto issued under this section slza.ll be on a
nonparticipating basis and all premiums and other collections therefor shall be
credited directly to a revolving fund established in the Treasury of the United
States and paymern on such insurance and any total disability provision added
thereto shalt be, made directly front such fund.
"(c) There are aithorizod to he appropriated such dome as may be required
to provide capital fc r such revolving fund Such appropriations shall be advanced
to the revolving fi ad as needed and shall boar interest its determined by the
Secretary of the Treasury, talking into consideration the average yield on all
marketable interest-bearing obligations of the United States of comparable
maturities then f(a?neing a part of the public debt and shall be repaid to the
Treasuryy over a reasonable period of time.
"`(d) the A.dminhdrator is authorized to set aside out of the revolving fund
established under subsection Ib) of this section such reserve amounts as may be
required render ac3cpted actnrial principles to meet all liabilities on insurance
issued under this se ction and any total disability income provision attached thereto.
The Secretary of Im Treasury is authorized 16 invest in and to sell and retire spe-
cial interest-bcarimg obligations of the incited States for the account of the
revolving fund. I iuch obligations issued for this purpose shall have maturities
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/1i tAYI P 6M4BR't '0g 2'P8 -SFoxCES 2771
fixed with due regard for the needs of the fund and shall bear interest at a rate
equal to the average market yield (computed by the Secretary of the Treasury
on the basis of market quotations as of the end of the calendar month next pre-
ceding the date of issue.) on all marketable interest-bearing obligations of the
United States then forming a part of the public debt which are not due or callable
until after the expiration of four years from the end of such calendar month;
except that where such average market yield is not it multiple of one-eighth of 1
per couture, the rate of interest of such obligation shall be the multiple of one.-
eighth of 1 per centum nearest such. market yield.
"(e) The insurance provided by this section shall be, in the amount of $10,000,
reduced by the amount of United States Government life insurance, national
service life insurance, and commercial life insurance held by the insured and in
force at the time of his death."
(b) The analysis of subchapter I of chapter 19 of title 38, United States Code,
is amended by adding at the end thereof the following:
"726. Insurance for certain members of the Armed Forces."
SEC. 3. The amendments made by this Act shall take effect on the sixtieth
day after the date of its enactment.
llt.R. 6351, 89th Cong., 1st sess.l
A BILL To amend title 38 of the United States Code to provide a program of insurance for members of the
Armed Forces who are unable to obtain conunerelal insurance at standard rates because of bring assigned
to duty in a combat zone or performing extrahazardous duty
Be it enacted by the Senate and House of Itepresantatives of the United States of
America in Congress assembled, That (a) subchapter I of chapter 19 of title 38,
United States Code, is amended by adding at the end. thereof the following now
section:
"? 726. Insurance for certain members of the Armed Forces
"(a) Any member of the Armed Forces who makes application in writing to
the Administrator in such form as the Administrator prescribes and establishes
to the satisfaction of the Administrator that he cannot obtain commercial life
insurance at a standard rate
"(1) because, of the nature of the duties he performs as such a member, or
(2) covering him in any place to which he may be ordered as such it
member,
shall, upon payment of the required premiums, be issued insurance under this
section.
"(b) Insurance issued under this section shall be issued upon the same terms
and conditions as are contained in the standard politics of national service life,
insurance except that (1) limited convertible term insurance may not be issued or
renewed on the term plan after the insured's fiftieth birthday; (2) the premium
rates for such limited convertible term or permanent plan insurance shall be based
on table X-18 (1950-54 Intercompany Table of Mortality) and interest at the
rate of 2% per centum per annum; (3) all settlements on policies involving annuities
on insurance issued under this section shall be calculated on the basis of The
Annuity Table for 1949, and interest, at the rate of 24 per centum per annum;
(4) all cash, loan, paid-up, and extended values, and, except as otherwise provided
in this section, all other calculations in connection with insurance issued under
this section shall be based on table X--18 (1950-54 Intercompany Table of
Mortality) and interest at the rate of 2dd per centum per annum; (5) insurance and
any total disability provision added thereto issued under this section shall be on a
nonparticipating basis and all premiums and other collections therefor shall be
credited directly to a revolving fund established in the. Treasury of the United
States and payments on such insurance and any total disability provision added
thereto shall be made directly from such fund.
''(c) There are authorized to be appropriated such sums as may be required to
provide capita]. for such revolving fund. Such appropriations shall be advanead
to the revolving fled its needed and shall bear interest as determined by the
Secretary of the Treasury, taking into consideration the average yield on all
marketable interest-bearing obligations of the United States of comparable
maturities then forming a part of the public debt and shall be repaid to the
Treasury over a reasonable period of time,
 Approved For ReIe2003/11/04 : CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES
"(d) The Administrator is authorized to set aside out of the revolving fund
established under subsection (b) of this section such reserve amounts as may be
required under accepted actuarial principles to meet all liabilities on insurance
issued under this section and any total disability income provision attached
thereto. The Secretary of the Treasury is authorized to invest in and to sell
and retire special interest-tearing obligations of the United States for the account
of the revolving fund. Such obligations issued for this purpose shall have ma-
turities fixed with due rogtrd for the needs of the fund and shall bear interest at
a rate equal to the average market yield (computed by the Secretary of the
Treasury on the basis of market quotations as of the end of the calendar month
next preceding the date of issue) on all marketable interest-bearing obligations of
the United States then fo'ming a part of the public debt which are not due or
callable until after the expiration of four years from the end of such calendar
month; except that where such average market yield is not it multiple of one-
eighth of 1 per centum, the rate of interest of such obligation shall be the multiple
of one-eighth of 1 per centum nearest such market yield.
"(e) The insurance pros ided by this section shall bo in the amount of $10,000,
reduced by the amount cf United States Government life insurance, national
service life insurance, and commercial life insurance held by the insured and in
force at the time of his death."
(b) The analysis of subchapter I of chapter 19 of title 38, United States Code,
is amended by adding at the end thereof the following:
"726. Insurance for certain members of the Armed Forces."
Spc. 3. The amendments made by this Act shall take effect on the sixtieth clay
after the date of its enacer lent.
A BILL To amend title 38 of the United States Code to authorize wartime benefits for veterans who, during
peacetime, have engaged in hostilities overseas in furtherance of the Nation's interests, and for other
purposes
Be it enacted by the Senile and House of Representatives of the United States of
America in Congress assembled, That this Act shall be known as the "Cold War
Veterans' Assistance Act".
TITLE I-TO ELIMINATE THE DIFFERENTIAL BETWEEN THE
WARTIME AND PEACETIME RATES OF DISABILITY AND DEATH
COMPENSATION
Sec. 101. Chapter 11 0_' title 38, United States Code, is amended as follows:
(1) By striking on; paragraph (2) of section 301 and redesignatiug petra-
graphs (3) and (4) as paragraphs "(2)" and "(3)", respectively;
(2) By striking out "Wartime" in the treading of subchapter If thereof;
(3) By striking oul"during a period of war," in section 310 thereof;
(4) By striking out. "during a period of war" in section 312 thereof; (5) By striking oul, "wartime" in the heading of section 314 thereof;
(6) By striking out "Wartime" in the heading of subchapter III;
i (7) By striking out "during a period of War," in section 321;
(8) By striking out "wartime" in the heading of section 322;
(9) B repealing subchapters IV and V;
(10) By striking out the subchapter heading immediately before section
351 and inserting in lieu thereof the following:
"subchapter IV-General?Compensation Provisions;"',.
and
(11) By repealing the provisions of section 357 and the heading thereof.
SEC. 102. The analysis if chapter 11 of title 38, United States Code, is amended
as fellows:
(1) By striking on;
"SUueaAFTER II-Wartime"
and inserting in lieu ;licrcof
Approved For Re1ea?'fl24YG3F11'104 : CIA-RDP67B00446R000500210005-9
 Approved For Release 200311 1 IRDP64SOO445RO 5=1+COFu9FoRcEs 2773
(2) By striking out
"SlrReSAPTER 111-Wartime"
and inserting in lieu thereof
1iSUneiArTER III-";
(3) By striking out
"322. Rates of wartime"
and inserting in lieu thereof
"822. Rates of";
(4) By striking out
"SesenarTha IV"
and all that follows down through
"SUFCirAPTER VI-General Canpensatlon Provisions"
and inserting in lieu thereof the following:
"snacnarana IV-GENERAL COMPENSATION PROVISIONS"; and
(5) By striking out "357. Combination of certain ratings."
SEC. 1Q3. The amendments and repeals made by this title shall take effect on
the first day of the first calendar month which begins more than sixty days after
the date of enactment of this Act.
TITLE II-BENEFITS FOR VETERANS OF AREAS OF HOSTILITIES
SEC. 201. Section 101 of title 38, United States Code, is amended by adding at
the end thereof the following:
"(20) The term 'area of hostilities' means any area determined by the President
to be an area in which units of the Armed Forces of the United States have served
overseas in any combat capacity, as may be determined by the President, and
the term 'period of hostilities' means the period during which such service was
rendered as determined by the President. Such terms specifically include service
in Vietnam, until the President determines that Vietnam is no longer an area of
hostilities and the period of hostilities there has ended."
SEc. 202. (a) The table of sections at the beginning of chapter 37 of title 38,
United States Code, is amended by inserting immediately below
"1817. Release Iran liability under guaranty."
.the following
"1818. Veterans who serve In an area of hostilities."
(b) Such chapter 37 is further amended by inserting immediately after section
1817 the following new section:
?1818. Veterans who serve In an area of hostilities
"(a) Each veteran who has performed active duty in an area of hostilities
shall be eligible for the benefits of this chapter in the same manner and to the
same extent as though his service had been performed during World War II
or the Korean conflict.
"(b) Where a veteran is or was elibible for the benefits of this chapter on
account of service during World War II or the Korean conflict, he shall not be
eligible for the benefits of this section--
"(A) except to the extent that his entitlement based on World War II or
Korean conflict service has not been used; and
"(B) until he is no longer eligible for such unused benefits based on
World War II or Korean conflict service.
"(e) Loans may be guaranteed under this section if made before the expiration
of ten years after the discharge or release of the veteran from a period of active
duty, any part of which was performed in an area of hostilities. In addition,
if a loan report or an application for loan guaranty is received by the Administrator
before the expiration of such 10-year period, not to exceed one year will be allowed
Approved For Release 2003/11/04x: CIA-RDP671306 H 18~0b~5 n?e of guaranty."
 Approved For ReldK420OWtM4rYOlAaBP67M446ROITOBGO695a9'S
HOSPITALIZATION
Sac. 203. Paragraph. (1) of section 101 of title 38, United States Code, is
amended to read as follows:
"(11) The term 'period of war' means the Spanish-American War, World War I,
World War 11, the Korean conflict, the period beginning on the date of any
future declaration of war by the Congress arid ending on a date proscribed by
Presidential proclamation or concurrent resolution of the Congress, and includes,
in the case of any veteran who has served in an area of hostilities, the period of
such service."
PENSION TO VETERANS AND THEIR WIDOWS AND CHILDREN
SEC. 204. (a) (1) Subseet on (a) of section 521 of title 38, United States Coda
is amended by inserting immediately after "Korean conflict," the following:
"and to each veteran of service in an area of hostilities,".
(2): Subsection (f) of such section 521 is amended by striking out "or" at the
end of paragraph (3); by striking out the period at the end of paragraph (4) and
inserting in lieu thereof "; or", and by adding at the end thereof the following:
"(5) in an area of hostilities."
(3)!. The eatchline of such section 521 is amended by adding at the end thereof
", or of service in an area if hostilities".
(4)'i Item 521 in the analysis of chapter 15 of title 38, United States Code, is
amended by inserting immediately before the period at the end thereof the,
following:
or of service, in an area of hostilit.es".
(b)(1) Subsection (a) of sections 541 and 542 of title 38, United States Code, are
each amended by inserting immediately after "or the Korean conflict" the follow-
ing: "or of service in an area of hostilities".
(2) Paragraph (1) of subsection (c) of section 541 of title 38, United States Code,
is amended by inserting immediately after "Korean conflict veteran" the
following: ", or (D) the eI piration of ten years after the end of his servicein a
combat zone, in the case of P. widow of it veteran of service in an area of hostilities
(3) The catehlines of such sections 541 and 542 are each amended by striking
out "or Korean conflict" and inserting in lieu thereof "Korean conflict, or an area
of hostilities".
(4) Items 541 and 542 of the analysis of chapter 15 of title 38, United States
Code, are each amended b:r striking out
"or Korean conflict"
and inserting in lieu thereof
"TCorean conflict, or an area of hostilities".
ASSISTANCE IN ACQUIRING SPECIALLY ADAPTED AUTOMOBILES
SEC. 205. (a) Section 1901. (a) of title 38, United States Code, is amended by
inserting immediately after ".Korean conflict" the following: "or during service
in an area of hostilities".
(b)~(1) Section 1905 of title 38, United States Code, is repealed.
(2)I Item L905 in the analysis of chapter 39 of title 38, United States Code,
is repealed
INSURANCE PROTECTION
Sec. 206. (a) Part II of title 38, United States Code, is amended by inserting
immediately after chapter 17 thereof the following now chapter:
"CHAPTER I8-SERVICEMEN'S INDEMNITY FOR SERVICE IN AN AREA
OF HOSTILITIES
"650. Definitions.
661. Coverage provided.
652. tienoftciaries of insurance.
"653. Waiver of pram iunrs on othe' insurance.
650. Definitions
"For the purposes of this chapter --
"(1) The term `child' does not include a stepchild unless the stepchild either
was it member of the insured's household, or was designated as it beneficiary
Approved For Rele' S 2"obl f ~I'Wflr4bYGtiI-1 1~ 7"g'b 4t6*'0(6tdb2i~ ~l~~ a illegitimate
 1NDEMN11Y OR ortCEs 2775
Approved For Release 2003/11/04: CIA-RDPb~R~O~29F
child unless the child was designated as a beneficiary under this chapter by the
insured.
"(2) The term 'parent' includes a stepparent if designated as a beneficiary
under this chapter by the insured; and only includes the mother and father
who last here that relationship to the insured.
"(3) The terms `brother' and `sister' include those of the half blood and those
through adoption.
"(4) The term States', when used in several States arid possessions of the United Staes,lth District of Columbia,
and the. Commonwealth of Puerto Rico.
651. Coverage provided
"(a) Each member of the Armed Forces on active duty in an area of hostilities
after the date of enactment of this chapter is automatically insured by the United
States, without cost to such member, against death on active duty while in all
area of hostilities and for one hundred and twenty days thereafter.
by the finsurance
amount of provided Uittedsubsection
reduced
States l Government life tinsinsurance amount o of
national
service life insurance held by the insured and in force at the time of his death.
"? 652. Beneficiaries of insurance
"(a) Upon certification by the Secretary concerned. of the death of any member
insured under section 651. of this title, the Administrator shall pay the insurance
only to the surviving spouse, children, parents, or brothers and sisters of the
insured. The insurance shall be paid in a lump sum.
"(b) The insured may designate the beneficiaries of the insurance within the
classes named in subsection (a); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes
without their consent.
"(c) if it designated beneficiary does riot survive the insured, or if none has
been designated, payment shall be made to the first eligible beneficiary among the
classes and in the order named in subsection (a); and if the class is composed of
more than one individual, payments shall be made in equal shares among such
individuals.
"(d) No payments shall be made under this chapter to the estate of any
deceased individual.
"? 653. Waiver of premiums on other insurance
"(a) Any member of the Armed Forces may apply for, and shall be granted,
waiver of premiums under this section on any policy of national service life
insurance or United States Government life insurance for periods during which
lie is in an area of hostilities and for one hundred and twenty days thereafter.
Any such waiver shall render the insurance nonparticipating while. the waiver is
in effect.
"(b) While any waiver of premiums is in effect under this section-
"(1) all premiums on five-year level premium term insurance shall be
waived; and
"(2) the portion of premiums on all other insurance which represents the
pure insurance risk shall be waived;
effective as of the first day of the first calendar month beginning after the member
first serves in an area of hostilities, and ending as of the last day of the first calendar
month beginning more than one hundred and twenty days after he leaves an area
of hostilities.
under "(c) this Where benefits section become tinder payable, liability for insurance benefits shall be waiver of premiums
the United States in an amount which, when added to any reserve of the policy
at the time of maturity, will equal the then value of such benefits. Computations
of such benefits shall be based upon the same tables and rates of interest as apply
with respect to the policy involved. The Administrator shall from time to time
transfer from the national service life insurance appropriation to the national
service life insurance fund, and from the military and naval insurance, appro-
priation to the United States Government life insurance fund such sums as may
be necessary to carry out this subsection."
(b) The table of chapters at the head of chapter 11 of title 38, United States
Code, is amended by inserting immediately below the lino beginning "17." the
following:
"18. Servicemen's Indemnity for Service in an Area of IIostlities."
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Reigi7 20bYf R'YG I-W6~604~46R000500210005 95
(c) The table of ehapteri at the head of title 38, United States Code, is amended
by inserting immediately telow the line beginning "17." the following:
"18. ;Servicemen's Indemnity for Service in an Area of Hostilities."
DECORATIONS
Sen. 207. For the purposes of award of all decorations and awards authorized
for members of the Armed Forces, service by a member of the Armed Forces in an
area of hostilities (as defined in title 38, United States Code) shall be treated the
same as if it were as service in combat in time of war declared by the Congress.
Svc. 208. The President, acting through the Administrator of Veterans' Affairs
is authorized to make bars for the purchase or construction of homes to veterans
of service in the Armed Flrcos of the United States during World War II or the
Korean conflict, or who have served in an area of hostilities during it period of
hostilities (as defined in title 38, United States Code, as amended by this Act),
who are residing in foreign countries, where such veterans would, if residing in
the United States, be entitled to assistance under title 38, United States Code,
in obtaining a guaranteed or insured loan for the purchase or construction of a
home.
Sue. 209. For the purpose of making loans under section 208 of this Act, the
President is authorized to make available in such amounts as may be specified
from time to time in appropriation Acts, foreign currencies accruing under the
Agricultural Trade Devclrptnent and Assistance Act of 1954.
Svc. 210. The maximum amount of any loan which may be made to it veteran
under section 208 of this Act, who is residing abroad, shall not exceed the equiva-
lent of $10,000. The teams of repayment of such loans, provisions relating to
security therefor, and othnr provisions with respect to such loans and their repay-
ment, shall be prescribed by the President, acting through the Administrator of
Veterans' Affairs, in general conformity to provisions applicable to direct loans
wade under title 38, United States Code, with such modifications as the President
may determine to be req Tired by conditions in the foreign country in which the
loan is made: Provided, however, That the amount of any loan made under the pro-
visions of this Act would become immediately due and payable if the veteran to
whc{m such loan is made sells or otherwise disposes of the real property for which
such loan was made.
[h.R. 9728, 80th Cong., 1st sess.]
A BILL To amend title 38, Unite 3 states Code, in order to provide special indemnity insurance for members
of the Armed Forces serving in combat zones
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That (a) chapter 19 of title 38, United States
Code, is amended by adding at the end thereof a new section as follows:
? 789. Special indemnity insurance for members of the Armed Forces serving
in combat zones
`? (a) Any person on a )tive duty with the Armed Forces in a combat zone shall,
as provided in this sectio i, be automatically insured by the United States without
cost to such person, agrust death in the principal amount of $10,000. Such
person shall be insured during the time that lie serves in a combat zone, and shall
be, 'deemed to have been serving in a combat zone at the time of his death if he
dims outside of a combat .one and (1) his death is determined by the Administrator
to have been the direct n esult of an injury or disease Iineurred while serving in a
combat zone, and (2) the injury or disease from which such person died was in-
curred not more than two years prior to death.
!`(b) Upon certificatic n by the Secretary of the military department concerned
of the death of any per[ on automatically insured under this section, the ~Adinin-
istrator shall cause the i rdemnity to be paid as provided in subsection (c) (nly to
the surviving spouse, elild, or children (including a stepchild, adopted child, or
an illegitimate child, if the latter was designated as beneficiary by the insured),
parent (including a stepparent, parent by adoption, or person who stood in loco
parentis to the insured at any time prior to entry into the active service for a
period of not less than cne year), brother, or sister of the insured, including those
of the half blood and those through adoption. The insured shall have the right to
designate the beneficiary or beneficiaries of the indemnity within the classes heroin
provided; to designate the proportion ot the principal t amount o to ho paid 6itD each o only
Approved For Release If nacre t1Et5pe bed u%h000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2777
within the classes herein provided. If the designated beneficiary or beneficiaries
do not survive the insured, or if none has been designated, the Administrator shall
make payment of the indemnity to the first eligible class of beneficiaries according
to the order set forth above, and in equal shares if the class is composed of more
than one person. Unless designated otherwise by the insured, the term `parent'
shall include only the mother and father who last bore that relationship to the
insured, Any installments of an indemnity not paid to a beneficiary during such
beneficiary's lifetime shall be paid to the named contingent beneficiary, if any;
otherwise, to the beneficiary or beneficiaries within the permitted class next
entitled to priority, but no payment shall be made to the estate of any deceased
person.
"(e)1,The indemnity shall be payable in equal monthly installments of one
hundred and twenty in number with interest at the rate of 2}q per venture, per
annum.
"(d) In the event any person was covered at the time of his death by auto-
matic indemnity under this suction and was also insured against such death under
a contract of national service life insurance or United States Government life
insurance, the indemnity authorized to be paid hereunder shall be a principal
amount equal to the difference between the amount of insurance in force at the
time of death and $10,000.
"(c) The Administrator is authorized to promulgate such rules and regulations,
not inconsistent with this section, as are necessary or appropriate to carry out
its purposes.
(f) There is hereby authorized to be appropriated, out of any money in the
Treasury not otherwise appropriated., such sums as may be necessary to carry
out the provisions of this section for the payment of liabilities under this section.
"(g) Any person guilty of mutiny, treason, spying, or desertion shall forfeit all
rights to an indemnity under this section, but restoration to active duty after
commission of any such offense shall restore all rights under this section. No
indemnity shall be payable for death inflicted as a lawful punishment for crime
or for military or naval offense, except when inflicted by an enemy, as defined
by the President.
"(h) As used in this section, the form `combat zone' moans any area outside
the United States in which it is determined by the President that units of the
Armed Forces are engaged in combat operations, The geographical limits of
any such area shall be defined by the President and such area shall be considered
a combat zone for purposes of this section during such period as may be prescribed
by Presidential proclamation. Such term shall specifically include those areas
outside the United States determined by the President to be areas in which units
of the Armed Forces of the United States have engaged in combat operations on
or after January 1, 1962, and before such date as may be determined by Presiden-
tial proclamation."
(b) The analysis of subchapter III of chapter 19 of such title is amended by
adding at the end thereof the following:
"789. Special indemnity Insurance for meinbpr9 of the Armed Forces serving in combat eons.".
[MR. 9745, 81)0, Cong., 1st sess.3
A. BILL PD amend title 38, United States Code, to provide wartime rates of disability compmwation for
veterans disabled from intiry or diseaso ineurrod or aggravated by overseas service and trey fteurmme
protection for members a the Armod Forces serving overseas.
Be it enacted by the Senate and House of Representatives bf the United States of
America in Congress assembled, That section 336 of title 38, United States Code, is
amended by striking out "or (3)" and inserting in lieu thereof "(3)", and by
resorting immediately before the period at the end thereof the following: ", or
(4) after the date of enactment of this clause and while performing active duty
outside the continental United States, Hawaii, the Commonwealth of Puerto
Rico, and the possessions of the United States".
Sec. 2. (a) Part If of title 38, United States Code, is amended by inserting
immediately after chapter 17 thereof the following new chapter:
"CHAPTER 18-OVERSEAS SERVICEMEN'S INDEMNITY
"Sec.
"650. Definitions.
"651. Coverago provided.
"652. 15eaefcinrfes of insurance.
"653, Waiver of premiums on other hnsurance,
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2778 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
650 Definitions
"For the purposes of this chapter--
"(1) The term 'child' does not include a stepchild unless the stepchild either
was a member of the insured's household, or was designated as it heneficiary under
this chapter by the insures, and the term does, not include an illegitimate child
unless the child was designs led as a beneficiary under this chapter by the insured.
"(2) The term 'parent' includes it stepparent if designated as a beneficiary
under this chapter by the insured; and only includes the number and father who
last born that relationship o the insured.
"(3) The terms 'brother and 'sister' include those of the, halfblood and those
through adoption.
"(4) The term 'United States', when used in a geographical sense, means the
several States and posses: ions of the United States, the District of Columbia,
and the Commonwealth of Puerto Rice.
1141. Coverage provided
"(it) Each member of he Armed Forces on active duty outside the United
States after the (late of enactment of this chapter is automatically insured by the
United States, without Best to such member, against death on active duty while
outside the United States.
" (b) Theinsurancc provided by subsection (a) shall he in the. amount of $10,000,
reduced by the amount of United States Government life insurance, or national
service life insurance hold by the insured and in force at the time of his death.
652. Beneficiaries of insurance
';'(n) Upon certification by the Secretary concerned of the death of any rpember
ses red under section 65 t of thus title, the Aduriruetrator shall pay the insurance
only to the surviving spouse, children, parents, or brothers and sisters of the in-
sured. The insurance shall be paid in a lump sum.
(b) The insured nra:' designate the beneficiaries of the insurance within the
classes named in subsection (a); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes without
their consent.
"(c) If a designated beneficiary does not survive the insured, or if none has
been designated, payment shall be made to the first eligible beneficiary among
the gasses and in the : der named in subsection (a); and if the class is composed
of more, than one individual, payments shall be made in equal shares among such
individuals.
"(d) No payments shall be made tinder this chapter to the estate of any
deceased individual.
'?? 653. Waiver of preniunrs on other insurance
"(a) Any member of the Armed Forces may apply for, and shall be granted,
waiver or premiums under this section on any policy of national service life insur-
anee of United States Government life insurance for periods during which he is
Outside the United Stai es. Any such waiver shall render the insurance ngnpartlei-
pating while the waiver is in effect.
"(b) While any waiver of premiums is in effect under this section-
" (1) all premiums on five-year level premium term insurance shall kre
waived; and
"(2) the portion of premiums on all other insurance which represents the
pure insurance ri ;k sha11 be waived;
effective as of the first day of the first calendar month beginning after the member
is first outside the TJn led States, and ending as of the last day of the first calendar
month beginning after he thereafter enters the United States.
"(c) Whom benefits: under any policy of insurance under waiver of premiums
under this section bacgme payable, liability for such benefits shall be borne by
the United States in an amount which, when added to any reserve of the policy
at the time of maturity, will equal the then value of such benefits. Computa-
tions of such benefitai shall be based upon the same tables and rates of interest as
apply with respect to the policy involved. The Administrator shall from time to
time transfer from the national service life. insurance appropriation. to the national
service life insurance fund, and from the military and naval insurance appropria-
tion to the United States Government life insurance fund such sums as may be
necessary to carry cut this subsection."
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2779
(b) The table of chapters at the head of part, II of title 38, United States Code,
is amended by inserting immediately below the line beginning "17." the following:
"18. Overseas 9orvicerceris Indemnity. "
(e) The table of chapters at the head of title 38, United States Code, is amended
by inserting immediately below the line beginning "t7." the following:
1118. Overseas Sorvlcemon's Indemnity."
11I.It. 1005.3, 80th Cong., 1st.sess.]
A DSLL To anmad tak, 88, United States Code, to provide wardhno rats of IlsnlriliLY omnpwswttnn for
Veterans disabled from injrtry o, disease incurred or aggravated by overseas service al ai iron i...rranco
protw;tion for nwmbors of the Armed Forces sorving overseas
Be it enacted by the Senate and house of Representatives of the United States of
America in Congress assembled, That section 336 of title 38, United States Code,
is amended by striking oat "or (3)" and inserting in lieu thereof "(3)", and by
inserting immediately before the period at the end thereof the following: , or (4)
after the date of enactment of this clause and while performing active duty
ontsi,de the continental United States Ilawaii, the. Commonwealth of Puerto
Rico, and the possessions of the United States".
SEe. 2. (a) Part If of title 38, United States Code, is amended by inserting
imncdiatoly after chapter 17 thereof the following new chapter:
"CHAPTER 18-OVERSEAS SERVICEMEN'S INDEMNITY
"Soo,
"nao. Dcanitmau.
"651. coverage provided.
"652. Dcrmficiarres of insnranco.
"653. waiver of poccultuus on otter insurance.
650. Definitions
For the purposes of this chapter-
"(1) The term `child' does not include a stepchild unless the stepchild either
was a member of the iasured's household, or was designated as a beneficiary
under this chapter by the insured, and the term does not include an illegitimat0
child unless the child was designated as a beneficiary under this chapter by the
insured.
"(2) The term 'paren't' inabidos a stepparent if designated as a beneficiary
under this chaptor by the insured; and only includes the mother and father who
last bore that relationship to the insured.
"(3) The terms `brother` and sister' include those of the half blood and those
through adoption.
"(4) The 'term `United States', when used in. a geographical sense means the
several States and possessions of the United States, the District of Cohumbia, and
the Commonwealth of Puerto Rico.
"? 651. Coverage provided
"(a) Each member of the, Armed Forces on active duty outside the United
States after the date of ouactmont of this chapter is automatically insured by the.
United States, without cost to such member, against death on active duty while
outside the United States.
"(b) The insurance provided by subsection (a) shall be in the amount of
$10,000, reduced by Who amount of United States Government life insurance or
national service life insurance held by the insured and in force at the tine, of his
death.
652. Beneficiaries of insurance
"(a) Upon certification by the Secretary concerned of the death of any member
insured under section 651 of this title, the Administrator shall pay the insurance
only to the surviving spouse, ehildron, parents, or brothers and sisters of the
insured. The insurance shall be paid in a lump sum.
"(b) The insured may designate the bcneficiarirs of the insurance within. the
classes named in subsection (a); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes without
their consent.
"(c) If a designated beneficiary does not survive the insured, or if none has
been designated, payment shall be made to the first eligible beneficiary among
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2780 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
the classes and in the order named in subsection (a); and if the class is composed
of more than one individual, payments shall be made in equal shares among such
individuals.
"(d) No payments she I be made under this chapter to the estate of any
deceased individual.
653. Waiver of premiums on other insurance
"(a) Any member of the Armed Forces may apply for, and shall he granted,
waiter of premiums under this section on any policy of national service life
insuiranoe or United Stat?a Government life insurance for periods during which
lie is outside the United States. Any such waiver shall render the insurance
nonparticipating while the waiver is in effect.
"(b) While any waiver of premiums is in effect under this section-
"(1) all prom urns on five-your level premium term insurance sl}all be
waived; auai
"(2) the portion of premiums on all other insurance which represents the
pure insurance risk t,hall he waived;
effective as of the first day of the first calendar month beginning after the member
is first outside the United States, and ending as of the last day of the first calendar
month beginning after It,, thereafter enters the United States.
"(c) Where benefits under any policy of insurance under waiver of promiurns
under this section born no payable, liability for such benefits shall be born by
(lie United States in an amount which, when added to any reserve of the policy
at the time of maturity, will equal the then value of such benefits. Computa-
tions of such benefits sf.all be based upon the same tables and rates of interest as
apply with respect to the policy involved. The Administrator shall from time to
time transfer from the national service life insurance appropriation to the national
service life insurance it rid, and from the military and naval insurance appropria-
tion to the United States Government life insurance fund such sums as may be
necessary to carry out this subsection."
(b) The table of chapters at the head of part II of title 38, United States Code,
is amended by insortin; immediately below the line beginning "17." the following:
t'rs. Overseas Serviceman's l ndo nutty."
(o) The table of chapters at the ltoad of title 38, United States Code, is amended
by inserting immediately below the line beginning "17." the following:
"i8. Overseas Servicemen's :ndetnnity."
A BILL To amend title 38 ,f the United States Cade to provido a program of insurance for members of the
Armed Forces who are arable to obtain commoreial insurance at standard rates because of batng assigned
to duty in a combat eon a or performing extrahazardoaa duty
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That (a) subchapter I of chapter 19 of title 38,
United States Code, is amended by adding at the end thereof the following new
section:
"? 726. Insurance for certain members of the Armed Forces
"(a) Any member of the Armed Forces who makes application in writing to
the Administrator in such form as the Administrator prescribes and establishes
to the satisfaction of the Administrator that he cannot obtain eommerohel life
insurance at a standard rate--
"(1) because of the nature of the duties he performs as such a member, or
"(2) covorhg him in any place to which he may be. ordered as such a
member,
shall, upon payment of the required premiums, be. issued insurance under this
section.
"(b) Insurance tied under this section shall be issued upon the same terms
and conditions as are contained in the standard policies of national service He
insurance except chat (1) limited convertible. term insurance may riot be issued
or renewed on the term plan after the insured's fiftieth birthday; (2) the premium
rates for such limited convertible term or permanent plan insurance shrill be
based on table X-18 (1959-54 Intercompany Table of Mortality) and interest at
the rate of 2}s par commit per annum; (3) all settlements on policies involving
annuities on insurance issued under this section shall be calculated on the basis
of the Annuity Table for 1949, and interest at the rate of 2j per contum per
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2781
annum; (4) all cash, loan, paid-up, and extended values, and, except as otherwise
provided in this section, all other calculations in connection with insurance issued
under this section shall be based on table X-18 (1950-54 Intercompany Table
of Mortality) and interest at the rate of 24n per centurn per annum; (5) insurance
and any total disability provision added thereto issued under this section shall
be on it nonparticipating basis and all premiums and other collections therefor
shall be credited directly to a revolving fund established in the Treasury of the
United States and payments on such insurance and any total disability provision
added thereto shall be made directly from such fund.
"(e) There are authorized to be appropriated such slims as may be required
to provide capital for such revolving fund. Such appropriations shall be advanced
to the revolving fund as needed and shall bear interest as determined by the,
Secretary of the Treasury, taking into consideration the average yield on all
marketable interest-bearing obligations of the United States of comparable
maturities then forming a part of the public debt and shah be repaid to the
Treasury over a reasonable period of time.
"(d) The Administrator is authorized to set aside out of the revolving fund
established under subsection (b) of this section such reserve amounts as may be
required under accepted actuarial principles to meet all liabilities on insurance
issued under this section and any total disability income provision attached
thereto. The Secretary of the Treasury is authorized to invest in and to sell and
retire special interest-bearing obligations of the United States for the account of
the revolving fund. Such obligations issued for this purpose shall have maturities
fixed with due regard for the needs of the fund and shall bear interest at a rate
equal to the average market yield (computed by the Secretary of the Treasury
on the basis of market quotations as of the end of the calendar month next pro-
ceding the date of issue) on all marketable interest-bearing obligations of the United
States then forming a part of the public debt which are not due or callable until
after the expiration of four years from the end of such calendar month: except that
where such average market yield is not a multiple of one-eighth of I. per centum,
the rate of interest of such obligation shall be the multiple of one-eighth of 1 per
centum nearest such market yield.
"(e) The insurance provided by this section shall be in the amount of $10,000,
Government life insurance, national life, reduced by the amount of United States
Government life insurance, national service life insurance, and commercial life
insurance held by the insured and in force at the time of his death."
(b) The analysis of subchapter I of chapter 19 of title 38, United States Code, is
amended by adding at the end thereof the following:
"726. Insnranee for certain members of the Armed Forces.'
Site. 3. The amendments made by this Act shall take effect on the sixtieth day
after the date of its enactment,
[ILR. 10273, 89th Cong., Ist sons.]
A EILI1 To amend title 38, United States Code, to provide a program or death indornnifieatton for parsons
serving in combat zones
Be it enacted by the Senate and House of Representatives of the United States of
of America in Congress assembled, That section 101 of title as, United States Code,
is amended by adding at the end thereof the following:
"(29) The term `combat zone' means any area determined by the President to
be an area in which units of the Armed Forces of the United States are engaged in
combat operations on or after the date of enactment of this paragraph and before
such date as may be determined by Presidential proclamation. Such term
specifically includes the countries of Laos, Cambodia, and Vietnam, until the
President determines that such countries are no longer 'combat zones'."
Ssc. 2. (a) Part II of title 38, United States Code, is amended by inserting
immediately after chapter 17 thereof the following now chapter:
"Soo.
"650. Doflnitions.
"651. Coverage provided.
"652. Reneflciarics of insmnnce.
"053. Waiver of preminme on other Insurance.
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES
650. Definitions
"For the purposes of thie chapter--
"(1) The terns 'child' does not include a stepchild unless the stepchild either
was a.member of the insurod's household, or was designated as it beneficiary under
this chapter by the insurer, and the term floes not include an illegitimate child
unless the child was designated as if beneficiary under this chapter by the insured.
"(2) The term 'parent' noludes a stepparent if designated as a beneficiary
under this chapter by the insured; and only includes the mother and father who
last bore that relationship to the insured.
"(3) The terns 'brother' and 'sister' include those of the halfblood and those
throu1h adoption.
"(4) The term 'United S,atcs', when used in it geographical sense, means's the
several States and possessions of the United States, the District of Columbia, and
the Commonwealth of Puerto Rico.
651. Coverage provided
"(a) Each member of th Armed Forces oil active duty in a combat zone
after the date of enactment of this chapter is automatically insured by the United
States,! without cost to such member, against death on active duty while in a
combat zone and for one but dred and twenty days thereafter.
"(b). Thu insurance provided by subsection (a) shall be in the amount of
$10,000, reduced by the amount of United States Government life insurance,
national service life insurancs, and commercial life insurance held by the insured
and in force at the time. of his death.
652.; Beneficiaries of insurance
"(a) 'Upon certification by the Secretary concerned of the death of any member
insured; under section 651 of this title, the Administrator shall pay the insurance
only to the surviving spouse children, parents, or brothers and sisters of the
insureds The insurance shall be paid in a lump sum.
"(b) The insured may designate the beneficiaries of the Insurance within the
classes named In subsection (a); may designate the proportion of the principal
amountt to be paid to each; ani may change beneficiaries within the classes without
their consent.
"(c) If a designated beneficiary does not survive the insured, or if note has been
designated, payments shall be made to the first eligible beneficiary among the
classes and in the order named in subsection (a); and if the class is composed of
more than one individual, payments shall be made in equal shares among such
individuals.
" (d) No payments shall to made under this chapter to the estate of any
deceased individual.
653. +Waiver of premiums on other insurance
"(a) Any member of the Armed Forces may apply for, and shall be granted,
waiver of premiums under tits scetiou on any policy of national service life
insurance or United States G)VOrrnnent life insurance for periods during which
he is in e combat zone and for one hundred and twenty days thereafter. Any
such waiver shall render the insurance nonparticipating while the waiver is ii:.
effect.
"(b) While any waiver of premiums is in effect under this section--
"(t) all premiums on five-year level pxmttium terra Insurance shall be
waived; and
"(2) the portion of premiums on all other insurance which represents the,
pure`, insurance risk shall lie waived;
effective as of the first day of the first calendar mouth beginning after the member
first serves in a combat zone, and ending as of the last day of the first calendar
month beginning more than one hundred and twenty days after he leaves a conbat
zone.
"(c) Where benefits under any policy of insurance under waiver of premiums
under this suction become payaele, liability for such benefits shall be borne by the
United States in an amount which, when added to any reserve of the policy at,
the time of maturity, will equal the then value of such. benefits. Computations
of such benefits shall be based upon the some tables and rates of interest as
apply wit t respect to the polity involved. The Administrator shall from time
to time transfer from the net oral servieo.. life insurance appropriation to the
national service life insurance fund, and from the military and naval insurance ap
propriatiorn to the United States Government life insurance fund such suns ass
may be necessary to carry out this subsections"
Approved For Release 2'003/11/04: CIA-RDP67B00446R000500210005-9
 b FORCES 2783
Approved For Release 2003/11/ Y6JXT 1P6 ?d'E 0id6Yj daff
(b) The table of chapters at the head of chapter 11 of title 38, United States
Code, is amended by inserting immediately below the line beginning "17." the
following:
"78. Combat servicemen's Indemnity."
(c) The table of chapters at the head of title 38, United States Code, is
amended by inserting immediately below the line beginning "17." the following:
III.R. 10280, 89th Cong., 1st sess.]
A BILL To amend title 38, United states Code, in order to provide special indemnity insurance for
members of the Armed Forces serving In cannot zones
Be it enacted by the Senate and House of Represendatioes of the United States of
America in Congress assembled, That (a) chapter 19 of title 38, United States Code,
is amended by adding at the end thereof a new section as follows:
"? 789. Special indemnity insurance for members of the Armed Forces serving
combat zones
"(a) Any person on active duty with the Armed Forces in a combat zone shall,
as provided in this section, be, automatically insured by the United States without
cost to such person, against death in. the principal amount of $10,000. Such
person shall be insured during the, time that he serves in a combat zone, and shall
be deemed to have been serving in a combat zone at the time of his death if he dies
outside. of a combat zone and (1) his death is determined by the Administrator
to have been the direct result of an injury or disease incurred while serving to a
combat zone, and (2) the injury or disease from which such person died was in-
curred not more than two years prior to death.
"(b) Upon certification by the Secretary of the military department concerned
of the death of any present automatically insured under this section, the Admin-
istrator shall cause the indemnity to be paid as provided in subsection (c) only
to the surviving spouse, child or children (including it stepchild, adopted child,
or an illegitimate child if the latter was designated as beneficiary by the insured),
parent (including a stepparent, parent by adoption, or person. who stood in loco
parentis to the insured at any time prior to entry into the active service for a
period of not less than one year), brother, or sister of the insured, including
those of the half-blood and those through adoption. The insured shall have the
right to designate the beneficiary or beneficiaries of the indemnity within the
classes herein provided; to designate the proportion of the principal amount to
be paid to each; and to change the beneficiary or beneficiaries without the con-
sent thereof but only within the classes herein provided. If the designated bene-
ficiary or beneficiaries do not survive the insured, or if none has been designated,
the Administrator shall make payment of the indemnity to the first eligible class
of beneficiaries according to the order sot forth above, and in equal shares if
the class is composed of more than one person. Unless designated otherwise
by the insured, the term 'parent' shall include only the mother and father who
last bore that relationship to the insured. Any installments of art indemnity not
paid to a beneficiary during such beneficiary's lifetime shall be paid to the named
contingent beneficiary, if any; otherwise, to the beneficiary or beneficiaries within
the permitted class next entitled to priority, but no payment shall be made to
the estate of any deceased person.
"(e) The indemnity shall be payable in equal monthly installments of one
hundred and twenty in number with interest at the rate of 2% per centum per
amum.
"(d) In the event any person was covered at the time of his death by automatic
indemnity under this section and was also insured against such death under a
contract of national service life insurance, or United States Government life
insurance, the indemnity authorized to be paid hereunder shall be a principal
amount equal to the difference between the amount of insurance in force at the
time of death and $10,000.
"(e) The Administrator is authorized to promulgate such rules and regulations,
not inconsistent with this section, as are necessary or appropriate to carry out its
purposes.
"(f) There is hereby authorized to be appropriated, out of any money in the
Treasury not otherwise appropriated, such sums as may be necessary to carry out
the revisions of this section for the p 1 t 1 i' ' r this section.
Approved For Release 209/11/04: CIA-RDP67B004 6~Ik~Sb01dY1 d -`
 2784 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
"(g) Any person guilty o' mutiny, treason, spying, or desertion shall forfeit all
rights, to an indemnity under this section, but restoration to active duty alter
commission of any such of'ense shall restore all rights under this section, No
indemnity shall be payable for death inflicted as a lawful punishment for crime
or for'military or naval offense, except when inflicted by an enemy, as defined by
the President.
"(h) As used in this section the term `combat zone' means any area outside. the
United States determined by the President to be an area in which units of the
Armed Forces of the United States, have engaged in combat operations on or
after January 1, 1962, and before such date as may be determined by Presidential
proclamation."
(b) The analysis of subc latter III of chapter 19 of such title is amended by
adding at the end thereof the following:
"789. special indemnity insurance fir members of the Armed Forces serving in conibat zones."
[TI.R. 10301, 89th Cong.. 1st sess.l 'i.
A BILL To amend title 38, United 6;ates Code, in order to provide special indemnity insurance for members
of tin Armed Forces serving in combat zones
Be it enacted by the Sena,e and House of Representatives of the United States of
America in Congress assembld, That (a) chapter 19 of title 38, United States Code,
is amended by adding at the end thereof a new section as follows:
? 789. Special indemnity insurance for members of the Armed Forces serving
in combat zones
"(a) Any person on active duty with the Armed Forces in a combat zone shall,
as provided in this sootion, be automatically insured by the United States without
cost to such person, against death in the principal amount of $10,000. Such
person. shall be insured during the time that he serves in a combat zone, and shall
be deemed to have been serving in a combat zone at the time of his death if he
dies outside of a combat zone and (1) his death is determined by the Adpril-
istrator to have been the direct result of an injury or disease incurred while
serving in a combat zone, and (2) the injury or disease from which such person
died was incurred not more than two years prior to death.
"(b) Upon certification by the Secretary of the military department concerned
of the death of any person automatically insured under this section, the Adminis-
trator, shall cause the indermity to be paid as provided in subsection (c) only to
the surviving spouse, child or children (including a stepchild, adopted child, or
an illegitimate child, if the latter was designated as beneficiary by the insured),
parent (including a stepparent, parent by adoption, or person who stood in loco
parentis to the insured at any time prior to entry into the active service for a
period of not less than one year), brother, or sister of the insured, including those
of the halfblood and those through adoption. The insured shall have the right
to designate the beneficiar;t or beneficiaries of the indemnity within the classes
hcreiq provided; to design[ to the proportion of the principal amount to be paid
to each; and to change. the beneficiary or beneficiaries without the consent thereof
but only within the classes heroin provided. If the designated beneficiary or
beneficiaries do not survive the insured, or if none has been designated, the
Administrator shall make payment of the indemnity to the first eligible class of
beneqmarics according to tl.e order set forth above, and in equal shares if the class
is composed of more than one person. Unless designated otherwise by the in-
sured; the term `parent' shall include only the mother and father who last bore
that relationship to the insured. Any installments of an indemnity not paid be a
beneficiary during such benafieiary's lifetime shall be paid to the named contingent
beneficiary, if any; otherw so, to the beneficiary or beneficiaries within the per-
mitted class next entitled to priority, but no payment shall be made to the estate
of any deceased person.
"(c) The indemnity shall be payable in equal monthly installments of one
hundred and twenty in number with interest at the rate of 2% per contain per
annum.
`(d) In the event any person was covered at the time of his death by automatic
indemnity under this section and was also insured against such death under a
contract of national service life insurance or United Stated Government life
insurance, the indemnity authorized to be paid hereunder shall be a principal
amount equal to the difference between the amount of insurance in force 4 the
Approved For Relb1dD?1aa10d9k-RDP67B00446R000500210005-9
 Approved For Release 200IIY0V1041TCIOARD8WBM461R OD5 0@51 ES 2785
"(e) The Administrator is authorized to promulgate such rules and regulations,
not inconsistent with this section, as are necessary or appropriate to carry out its
purposes.
"(f) There is hereby authorized to be appropriated, out of any money in the
Treasury not otherwise appropriated, such sums as may be necessary to carry
out the provisions of this section for the payment of liabilities under this section.
"(g) Any person guilty of mutiny, treason, spying, or desertion shall forfeit
all rights to an indemnity under this section, but restoration to active duty after
commission of any such offense shall restore all rights under this section. No
indemnity shall be payable for death inflicted as a lawful punishment for crime
or for military or naval offense, except when inflicted by an enemy, as defined
by the President.
"(h) As used in this section, the term 'combat zone' means any area outside
the United States in which it is determined by the President that units of the
Armed Forces are engaged in combat operations. The geographical limits of
any such area shall be defined by the President and such area shall be considered
a combat zone, for purposes of this section. during such period as may be prescribed
by Presidential proclamation, Such term shall specifically include those areas
outside the United States determined by the President to be areas in which units
of the Armed Forces of the United States have engaged in combat operations on
or after January 1, 1962, and before such date as may be determined by presidential
proclamation."
(b) The, analysis of subchapter III of chapter 19 of such title is amended by
adding at the end thereof the following:
"789. Special indemnity Insurance for members of the Armed Forces serving in combat zones,".
[11.R. 10312, 89th Cong., lit sees.]
A BILL To amend title 38, United States Code, to provide a program of death indenrulfleation for peaces
serving in combat zones
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 101 of title 38, United States Code.,
is amended by adding at the end thereof the following:
"(29) The term 'combat zone' means any area in. which units of the Armed
Forces of the United States are engaged in combat operations on or after De-
cember 22, 1961. Such term specifically includes the countries of Germany, Laos,
Cambodia, Vietnam, and Dominican Republic, until the President determines
that such countries are no longer 'combat zones'."
Sue. 2. (a) Part II of title 38, United States Code, is amended by inserting
immediately after chapter 17 thereof the following new chapter:
"CHAPTER 1S--COMBAT SERVICEMEN'S INDEMNITY
"sec.
11660. Definitions.
"661. Coverage provided.
"eel. Denoaolaries of insurance.
"653. Waiver of premimns on other insurance.
"? 650. Definitions
"For the purposes of this chapter-
"(1) The term `child' does not include a stepchild unless the stepchild either
was a member of the insured's household, or was designated as a beneficiary
under this chapter by the insured, and the term does not include an. illegitimate
child unless the child was designated as a beneficiary under this chapter by the
insured.
"(2) The term 'parent' includes a stepparent if designated as a beneficiary
under this chapter by the insured; and only includes the mother and father who
last bore that relationship to the insured.
"(3) The terms 'brother' and `sister' include those of the halfblood and those
through adoption.
"(4) The term 'United States', when used in a geographical sense, means the
several States and possessions of the United States, the District of Columbia, and
the Commonwealth of Puerto Rico.
651. Coverage provided
"(a) Each member of the Armed Forces on active duty in a combat zone on or
after December 22, 1961, is automatically insured by the United States, without
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2786 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
cost to such member, against death on active duty while inn combat zone and for
one hundred and twenty days thereafter. - -
'(b) The insurance provided by subsection (a) shall be in the amount of
$10,000.
"? 652. Beneficiaries of insurance
,"(a) Upon eertificatic n by the Secretary concerned of the death of any member
insured under section 6111 of this title, the Administrator shall pay the insurance
ugly to the surviving spouse, children, parents, or brothers and sisters of the
insured. The insurance. shall be paid in a lump sum.
"(b) The insured may designate the beneficiaries of the insurance within the
classes named in subse?tion (a); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes without
their consent.
"(c) If a designated beneficiary does not survive the insured, of if none has been
designated, payment wall be made to the first eligible beneficiary among the
classes and in the order named in subsection (a) ; and if the class is composed of
more than one individual, payments shall be made in equal shares among such
individuals.
"(d) No payments dial] be made under this chapter to the estate of any
deceased individuals.
(a. R. 10295, Sour Gong., 1st sess.)
~. DILL To emend title 18, tolled States Cade, to provide a program of death indemnifieatloo for persons
serving In combat zones
Be it enacted by the Senate and House of Representatives of the United( Slates of
America in Congress aascrnbled, That section 101 of title 38, United States Code,
IS amended by adding at the end thereof the following:
"(20) The term 'combat zone' means any area determined by the President
to be an area in which units of the Armed Forces of the United States arc engaged
in combat operations on or after the date of enactment of this paragraph and
before such elate as may be determined by Presidential proclamation. Such
term specifically inch des the countries of Laos, Cambodia, and Vietnam, until
the President determines that such countries are no longer 'combat zones'."
SEC. 2. (a) Part I' of title 38, United States Code, is amended by inserting
immediately after chapter 17 thereof the following new chapter:
"CHAPTEL 18--COMBAT SERVICEMEN'S INDEMNITY
,sec.
"650. Defmitions.
!"651. Coverage provided.
"652. neuoleiaries of insure flee.
"658. Waiver of prantures rem ether insurance.
'1650. Definitions
"For the purposes of this chapter-
"(1) The term 'child' does not include it stepchild unless the stepchild either
was a member of the insured's household, or was designated as a h.euefieiary
under this chapter by the, insured, and the term does not include an illegitimate
child unless the child was designated as a beneficiary under this chapter by the,
insured.
"(2) The terra `parent' includes a stepparent if designated as a beneficiary
under this chapter by the insured; and only includes the mother and father who
last bore that relaticnship to the insured.
"(3) The terms 'bro'ther' and 'sister' include those of the halfblood and those
through adoption.
"(4) The term 'I nited States', when used in a geographical sense, means the
several States and possessions of the United States, the District of Columbia, and
the Commonwealth of Puerto Rico.
651. Coverage p?ovided
"(a) Each member of the Armed Forces on active duty in a combat zone after
the date of enaetRout of this chapter is automatically insured by the United
States, without cost to such member, against death on active duty while in a
combat zone and fir one hundred and twenty days thereafter.
"(b) The insurance provided by subsection (a) shall be in the amount, of $10,000,
reduced by the, amount of United States Government life insurance, national
 INDEMNITY OR 2787
2Approved For Release 2003/11/04: CIA-RDP6S4d~gF0562f6-~'ORCES
service life insurance, and commercial life insurance held by the insured and in
force at the time of his death.
"? 652. Beneficiaries of insurance
"(a) Upon certification by the Secretary concerned of the death of any member
insured under section 651 of this title, the Administrator shall pay the insurance
only to the surviving spouse, children, parents, or brothers and sisters of the
insured. The insurance shall be paid in a lump sum.
"(b) The insured may designate the beneficiaries of the insurance within the
classes named in subsection (a); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes without
their consent.
"(c) If a designated beneficiary does not survive the insured, or if none has
been designated, payment shall be made to the first eligible beneficiary among
the classes and in the order named in subsection (a) ; and if the class is composed
of more than one individual, payments shall be made in equal shares among such
individuals.
"(d) No payments shall be made under this chapter to. the estate of any
deceased individual.
"? 653. Waiver of premiums on other insurance Any
Armed Forces waiver of prmiumsrunder the this section on any policy of for, national service] life granted,
or United States Government life insurance for periods during which
he is in a combat zone and for one hundred and twenty days thereafter. Any
such waiver shall render the insurance nonparticipating while the waiver is in
effect.
"(b) While any waiver of premiums is in effect under this section-
"(1) all premiums oil five-year level premium term insurance shall be
waived; and
"(2) the portion of premiums on all other insurance which represents the
pure insurance risk shall be waived;
effective as of the first day of the first calendar month beginning after the member
first serves in a combat zone, and ending as of the last day of the first calendar
month beginning more than one hundred and twenty days after he leaves a
combat zone.
11
under tlisnsecti n become d payable, iabilityl for insurance benefits shall be bone by
the United States in an amount which, when added to any reserve of the policy
at the time of maturity, will equal the then value of such benefits. Computations
of such benefits shall be based upon the same tables and rates of interest as apply
with respect to the policy involved. The Administrator shall from time to time
transfer from the national service life insurance appropriation to the national
service life insurance fund, and from the military and naval insurance appropria-
tion to the United States Government life insurance fund such sums as may be
necessary to carry out this subsection."
(b) The table of chapters at the, head of chapter 11 of title 38, United States
Code, is amended by inserting immediately below the line beginning "17." the
following:
"18. Combat servicemen's Indemnity."
(e) The table of chapters at the head of title 38, United States Code, is amended
by inserting immediately below the line beginning "17." the following:
"18. Combat servicemen's indemnity."
[H.R. 10308, 80th Cong., 1st seas.]
A BILL To amend title 38, United States Code, to provide a program of death indemnification for persons
serving in combat zones
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That section 101 of title 38, United Status Code, is
amended by adding at the end thereof the following:
"(20) The term `combat zone' means any area determined by the President to
be an area in which units of the Armed Forces of the United States are engaged in
combat operations on or after the date of enactment of this paragraph and before
such date as may be, determined by Presidential proclamation. Such term spocifi-
Approved For Release 2003 PI-1 CIA-RDP67B00446R000500210005-9
 Approved For Rel 20D3/t91/6*"KO JRBUWNO04aqWO66bdfObbtc98
Bally includes the countries' of Laos, Cambodia, and Vietnam, until the President
determines that such countries are no longer `combat zones'." tle
ited
Code imme diately)aftertchapt r ti.7 thereofn the f llowing new chapter:ded by insetting S. 2. "CHAPTER 1S--COMBAT SERVICEMEN'S INDEMNITY
?::sec. '..
050. Definitions.
051. Coverage provided.
652. 6eneuci?r es of insurance.
"653. Waiver of premiums on other Insurance.
650. Definitions
"For the purposes of thin chapter-
"(1) The term `child' does not include a stepchild unless the stepchild either
was it member of the insured's household, or was designated as it beneficiary tinder
this chapter by the insured, and the terra does not include an illegitimate child
unless the child was designated as a beneficiary under this chapter by the insured.
"(Z) The term `parent' includes a stepparent if designated as a beneficiary
under this chapter by the insured; and only includes the mother and father, who
last bore that relationship to the insured.
"(3) The terms 'brothoi' and 'sister' include those of the halfblood and those
through adoption.
"(4) The term 'United States', when used in a geographical sense, meads the
several States and possessions of the United States, the District of Columbia, and
the Commonwealth of Puerto Rico.
651. Coverage provides
"(a) Each member of the Armed Forces on active duty in a combat zone after
the date of enactment of this chapter is automatically insured by the United
States, without cost to such member, against death on active duty while in a
combat zone and for one ]tundred and. twenty days thereafter.
"(b) The insurance provided by subsection (a) shall be in the amount of
$10,000, reduced by the amount of United States Government life. insurance,
national service life insurance, and commercial life insurance held by the insured
and in force at the time of his death.
052. Beneficiaries of i'isurance
"(a) Upon certification by the Secretary concerned of the death of any member
insured under section 051 of this title, the Administrator shall . pay the insurance
only to the surviving spouse, children, parents, or brothers and sisters of the
insured. The insurance ;:hall be paid in a lump sum.
"(b) The insured may designate the beneficiaries of the insurance within the
classes named in subsection (a); may designate the proportion of the principal
amount to be paid to each; and may change beneficiaries within the classes without
their consent.
"c) If a designated beieftciary does not survive the insured, or if none has been
desig(nated, payment shall be made to the first eligible beneficiary among the
nd in the order subsection
be made if the
equal shares amongiea
more more than one individnm1 1, , p Pay
individuals.
"(d) No payments sha 1 be made under this chapter to the estate of any deceased
individual.
653. Waiver of premiums on other insurance
"(a) Any member of ;he Armed Forces may apply for, and shall be granted,
waiver of premiums under this section on any policy of national service life insur-
ance or United States Government life insurance for periods during which he is
in a combat one and for one hundred and twenty days thereafter. And such
waiver shall render the insurance nonparticipating while the waiver is in effect.
"(b) While any waiver of premiums is in effect ardor this section-
"(1) all premiums on five-year level premium term Insurance shall be
waived; and
"(2) the portion of premiums on all other insurance which represents the
pure insurance risk th y o he waived;
effective as of the e first day of f the first t calendar month beginning after the member
first serves in a combat zone, and ending as of the last day of the first calendar
Approved For Relea~?A~d/'~n'~~4nioCIA RDP67B00446R00050021000519avea a combat
 Approved For Release 2003/11W2MM K4ZDPB7BD RO'0050021A0@S;:9FORCES 2739
under t}hisl iinsu
ance secton become] payable pliability forrsuch benefits shall be borl?11ieby
the United States in an amount which, when added to any reserve of the policy
at the time of maturity, will equal the then value of such benefits. Computations
of such benefits shall be based upon the same tables and rates of interest as apply
with respect to the policy involved. The Administrator shall from time to time
transfer from the national service life insurance appropriation to the national
service life insurance fund., and from the military and naval insurance appropria-
tion to the United States Government life insurance fund such sums as may be
necessary to carry out this subsection."
(b) The table of chapters at the head of chapter It of title 38, United States
Code, is amended by inserting immediately below the line beginning "17." the
following:
"98. Combat sorvieornen's indemnity."
(e) The table of chapters at the head of title 38, United States Code, is amended
by inserting immediately below the line beginning "17." the following:
"Is. Combat servicemen's icdcmnlty."
SEC. 3. The provisions of sections 1 and 2 shall be effective from December
15, 1961.
[I C. R. 10473, 80th Coog., 1,5 sass.]
A DILL To amend title as, United States Code, in order to provide special indemnity insurance for members
of the Armed Forces serving in combat zones
Be it enacted by the Senate and Douse of Representatives of the United States of
America in Congress assembled, That (a) chapter 19 of title 38, United States
Code, is amended by adding at the end thereof It new section as follows:
789. Special indemnity insurance for members of the Armed Forces serving
in combat zones
as provided iperson
th is seection,, be a autom tically insured by the United States, without
cost to such person, against, death in the principal amount of $10,000. Such person
shall be insured during the time lie serves in a combat zone, and shall be deemed
to have been serving in a combat zone at the time of his death if he dies outside. of
a combat zone and (1) his death is determined by the Administrator to have been
the direct result of an injury or disease incurred while serving in a combat zone
and (2) the injury or disease from which such person died was incurred not more
than two years prior to death.
"(b) Upon certification by the Secretary of the military department con-
cerned of the death of any person automatically insured under this section, the
Administrator shall cause the indemnity to be paid as provided in subsection
(o) only to the surviving spouse, child, or children (including a stepchild, adopted
child, or an illegitimate child if the latter was designated as beneficiary by the
insured), parent (including a stepparent, parent by adoption, or person who stood
in loco parentis to the insured at any time prior to entry into the active service
for a period of not loss than one year
those and those through adoption. The insured shall have the
right to designate the beneficiary or beneficiaries of the indemnity within the
classes horein provided; to designate the proportion of the prinicpal amount to
be paid to each; and to change the beneficiary or beneficiaries without the consent
thereof but only within the classes herein provided. If the designated beneficiary
or benofloiaries do not survive the insured, or if none has been designated, the
Administrator shall make payment of the indemnity to the first eligible class of
beneficiaries according to the order set forth above, and in equal shares if the
class is composed of more than one person. Unless designated otherwise by the,
insured, the term `parent' shall include only the mother and father who last bore
that relationship to the insured. Any installments of an indemnity not paid to
a beneficiary during such beneficiary's lifetime shall be paid to the named contingent
beneficiary, if any; otherwise, to the beneficiary or beneficiaries within the per-
mitted class next entitled to priority, but no payment shall be made to The estate
of any deceased person.
"(c) The indemnity shall be payable in equal monthly installments of one
hundred and twenty in number with interest at the rate of 2% per contun per
annum.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Rele 2Oi 1A AY,k(Q l~$6O146RNO50921)0OOUSs
"(d) In the event any pe son was covered at Lite time of his death by automatic
indemnity under this sceti n and was also insured against such death under a
contract of national service life insurance or United States Government life
insurance, the idemnity a ithorized to be paid hereunder shall be a principal
amount equal to the differ "nee between the amount of insurance in force at the
time of death and $10,000
"(c) The Administrator -s authorized to promulgate such rules and regulations,
not inconsistent with this section, as are necessary or appropriate to carry out
its purposes.
"(fi) 'There is hereby authorized to be appropriated, out of any money in the
Treasury not otherwise appropriated, such sums as may be necessary to carry
out the provisions of this section for the payment of liabilities under this section.
"(g) Any person guilty of mutiny, treason, spying, or desertion shall forfeit
all rights to an indemnity under this section, but restoration to active duty after
commission of any such offense shall restore all rights under this section. No
indemnity shall be payabts for death inflicted as a lawful punishment for crime
or for military or naval offense, except when inflicted by an enemy, as defined
by the President.
"(h) As used in this section the term `combat zone' means any area outside
the United States determined by the President to be an area in which units of
the Armed Forces of the United States have enagged in combat operations on
or after January 1, 1964, and before such date as may be determine Id by
presidential proclamation. '
(b) The analysis of subchapter III of chapter 19 of such title is amended by
addipg at the end thereof .he following:
"789. Special indemnity insurance for members of the Armed Forces serving in combat zones."
[II.n. 10478, 89th Cong., 1st seas.]
A 'DILL To emend title 38, Un led States Code, in order to provide special indemnity insurance for
members of the Armed Forces serving in combat zones
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That (a) chapter 19 of title 38, United States
Code, is amended by add ng at the end thereof a now section as follows:
"Q 789. Special indemnit7 insurance for members of the Armed Forces serving
in combat zones
"(a) Any person on active. duty with the Armed Forces in a combat zone shall,
as provided in this section, be automatically insured by the United States, with-
out cost to such person, against death in the principal amount of $10,000. ' Such
person shall be insured dr ring the time that he serves in a combat zone, and shall
be deemed to have been serving in a combat zone at the time of his death if he
dies outside of a combat zone and (1) his death is determined by the Adminis-
trator to have been the d root result of an injury or disease incurred while serving
in a combat zone, and (2) the injury or disease from which such person died was
incurred not more than two years prior to death.
"(b) Upon certification by the Secretary of the military department concerned
of the death of any person automatically insured under this section, the Adminis-
trator shall cause the in femnity to be paid as provided in subsection (a) only
to the surviving spouse, child, or children (including a stepchild, adopted child, or
an illegitimate child if tie latter was designated as beneficiary by the insured),
parient (including a step )arent, parent by adoption, or person who stood in loco
parentis to the insured at any time prior to entry into the active service for a period
of not less than one year), brother, or sister of the insured, including those of the half-
blood and those througi. adoption. The insured shall have Lite right to designate
the beneficiary or beneficiaries of the indemnity within the classes herein provided;
to designate the proportion of the principal amount to be paid to each; and to
change the beneficiary o^ beneficiaries without the consent thereof but only within
the classes herein provided. If the designated beneficiary or beneficiaries do not
survive the insured, or i' none has been designated, the Administrator shall make
payment of the indemnity to the first eligible class of beneficiaries according to
the order set forth above, and in equal shares if the class is composed of more than
one person. Unless deiignated otherwise by the insured, the term `parent' shall
include only the Mother and father who last bore that relationship such h the insur d.
Approved For Relea 1 e. ~o#1~~1~IOO9; otherwise, to
ice s a o I1a i
 INDEMNITY OR INSURANCE F
Approved For Release 2003/11/04: CIA-RDP67B00446R000bObifffi-gORCES 2791
the beneficiary or beneficiaries within the permitted class next entitled to priority,
but no payment shall be made to the estate of any deceased person.
"(c) The indemnity shall be payable in equal monthly installments of one
annumhundred and twenty in number with interest at the rate of 2Y, per eentum per
annum.
"(d) In the event any person was covered at the time of his death by automatic
indemnity under this section and was also insured against such death under a
contract of national service life insurance or United States Government life
insurance, the indemnity authorized to he paid hereunder shall be a principal
amount equal to the difference between the amount of insurance in force at the
time of death and $10,000.
"(e) The Administrator is authorized to promulgate such rules and regulations,
not inconsistent with this section, as are necessary or appropriate to carry out its
purposes.
"(f) There is hereby authorized to be appropriated, out of any money in the
Treasury not otherwise appropriated, such sums as may be necessary to carry
out the provisions of this section for the payment of liabilities under this section.
11(g) Any person guilty of mutiny, treason, spying, or desertion shall forfeit
all rights to an indemnity under this section, but restoration to active duty after
commission of any such offense shall restore all rights under this section. No
indemnity shall be payable for death inflicted as a lawful punishment for crime or
for military or naval offense, except when inflicted by an enemy, as defined by
the President.
"(h) As used in this section the term 'combat zone' means any area outside the
United States determined by the President to be an area in which units of the
Armed Forces of the United States have engaged nn combat operations on or
after January 1, 1962, and before such date as may be determined by Presidential
proclamation."
(b) The analysis of subchapter III of chapter 19 of such title is amended by
adding at the end thereof the following:
"789. Special indemnity Insurance for members of the Armed Forces serving In combat zones."
[II. R. 10630, 89611 Cong., 1st sess.l
A BILL To amend title 38, United States Code, In order to provide speeialindemulty insurance for members
of the Armed Forces serving In combat zone, and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of
America in Congress assembled, That (a) chapter 19 of title 38, United States
Code, is amended by adding at the end thereof a now section as follows:
789. Special indemnity insurance for members of the Armed Forces serving
in combat zones
"(a) Any person on active duty with the Armed Forces in a combat zone
shall, as provided in this section, be automatically insured by the United Slates,
without cost to such person, against death in the principal amount of $10,000'
Such person shall be insured during the time that lie serves in a combat zone, and
shall be deemed to have been serving in a combat zone at the time of his death
if he dies outside of a combat zone and (1) his death is determined by the Ad-
ministrator to have been the direct result of an injury or disease incurred while
serving in a combat zone, and (2) the injury or disease from which such person
died was incurred not more than two years prior to death.
"(b) Upon certification by the Secretary of the military department concerned
of the death of any person automatically insured under this section, the Adminis-
trator shall cause the indemnity to be paid as provided in subsection (c) only to
the surviving spouse, child or children (including a stepchild, adopted child, or
an illegitimate child if the latter was designated as beneficiary by the insured),
parent (including a stepparent, parent by adoption, Cr person who stood in loco
parentis to the insured at any time prior to entry into the active service for a
period of not less than one year), brother, or sister of the insured, including those
of the h,alfblood and those through adoption. The insured shall have the right
to designate the beneficiary or beneficiaries of the indemnity within the classes
herein provided; to designate the proportion of the principal amount to be paid
to each; and to change the beneficiary or beneficiaries without the consent thereof
but only within the classes herein provided. If the designated beneficiary or
beneficiaries do not survive the insured, or if none has been designated, the
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Rele~~OdQ1A~F~ CI~1411356842a5~~8O1~ES
Administrator shall make payment of the indemnity to the first eligible class of
beneficiaries according to the order set forth above, and in equal shares if the class
is composed of more that one person. Unless designated otherwise by the in-
sured, the Lorin 'parent' ::hall include only the mother and father who last bore
that relationship to the i isured. Any installments of an indemnity riot paid to
'a beneficiary during such beneficiary's lifetime shall he paid to the named cotr-
tin!ent beneficiary, if any; otherwise to the beneficiary or beneficiaries within
the permitted class next entitled to priority, but no payment shall be made to
thelestate of any deceased person.
"(c) The indemnity stall be payable in equal monthly installments of one
hundred and twenty in number with interest at the rate of 2~4 per centum per
annum.
'1(d) In the event any person was covered at the time of his death by automatic
indemnity under this section and was also insured against such death under', a con-
tract of national service life insurance or United States Government life insurance,
the indemnity authorize(, to be paid hereunder shall be a principal amount equal
to the difference between the amount of insurance in. force at the time of death
and 810,000.
"(e) The Administrator is authorized to promulgate such rules and regulations,
not inconsistent with this section, as are necessary or appropriate to carry out
its purposes.
?'(f) There is hereby authorized to be appropriated, out of any money in the
Treasury not otherwise sppropriated, such sums as may be necessary to carry out
the provisions of this section for the payment of liabilities under this section.
"(g) Any person guil,y of mutiny, treason, spying, or desertion shall forfeit
alll rights to an indemnify under this section, but restoration to active duty after
commission of any suet offense shall restore all rights under this section. No
indemnity shall be pays ble for death inflicted as a lawful punishment for crime
or for military or naval 3ffonse, except when inflicted by an enemy, as defined by
the President.
"(h) As used in this s action the term 'combat zone' means any area outside the
United States determined by the President to be an area in which units of the
Armed Forces of the United States have engaged in combat operations on nr after
January 1, 1962, and before such date as may be determined by Presidential
proclamation."
(b) The analysis of subchapter III of chapter 19 of such title is amended by
adding at the end thereof the following:
"'789. Special indemnity insurance for members of the Armed Forces serving In combat zones "
Ssc. 2. Title 38, United States Code, is further amended as follows:
',.(1) Section 417(a) is amended-
! (A) By dole flog therefrom the words "under section 724 of this title"
ad inserting in lieu thereof the words "in effect on January 1, 1959, and con-
t?ilued in effect under section 724(a) of this title".
(B) By adding it the end thereof the following: "The prohibition against
the payment of dcpeudoncy and indemnity compensation contained in this
subsection shall not apply to insureds who on or after the effective date of
this amendment die while on active duty in a combat zone as defined iii. section
789 of this title, o' within 120 days after duty in such a zone, or (1) whose
death is determin:it by the Administrator to have been the direct result
of an injury or disease incurred while serving in a combat zone, and (2) the
injury or disease from which such person died was incurred not more than
two years prior to death."
(2) Delete from the last sentence of subsection (c) of section 704 the words
"or section 725" each time they appear and insert in lieu thereof the words "section
725, or section 726".
(3) Subsection (b) of section 724 is repealed and the following new subsections
are added to section 7:54:
"(b) After the date of enactment of this subsection any person who is on
active duty with the Armed Forces in a combat zone, as defined in section 789
of this title, for a continuous period of 30 days or more and any person hereafter
ordered to such duty under orders for 30 days or more in such a combat zone,
who is insured under National Service Life Insurance or United States Govern-
ment Life Insurance shall be entitled, upon written application, to a waiver (with
the right to a refund after termination of such duty) of all premiums paid on
term insurance and that portion of any permanent insurance premiums paid
Approved For Releas t re isu nsuranee risk , as determined by tcltemu t ibe
?i ~~ b&R risk as iO?Oi5-
 timely paid to maintain the insurance in force. Such waiver shall apply to pre-
miums becoming due after the first day of the first calendar month following
the date of enact ent of this subsection, or the first day of the first calendar
month following entry on active duty with the Armed Forces in such a combat
zone, whichever is the later date, and during the remainder of such continuous
active. duty in a combat zone for 120 days thereafter; however, no pretnimn
becoming due prior to the date of application for waiver under this subsection
shall be waived or refunded. Any premium waiver granted under this subsec-
tion on a participating contract of insurance shall render such insurance non-
participating during the period such premium waiver is in effect. Upon certifica-
tion of the period of combat zone duty by the Secretary of the military department
concerned, and upon application by the insured, or in death cases by the bene-
ficiary of his insurance, the Administrator shall refund to the insured or to the
beneficiary the amount of premiums waived under this subsection. Premiums
on term insurance waived under this subsection shall be refunded with interest
as determined by the Administrator.
"(e) Whenever benefits become payable because of the maturity of such
insurance while tinder the pcrrnium waiver provided by this section., liability for
the payment of such benefits shall be borne by the United States in an amount
which, when added to any reserve of the policy at the time of maturity, will
equal the then value of such benefits under such policy. Where life contingencies
are involved in the calculation of the value of such benefits, the calculation of
such liability or liabilities shall be based upon such mortality table or tables as
the Administrator may proscribe with interest at the rate of 3 per contain per
annum as to National Service Life Insurance which wasp United States Government
Life Insurance. The Administrator shall transfer from time to time from the
National Service Life Insurance appropriation to the National Service Life
Insurance Fund and from the Military and Naval Insurance appropriation to the
United States Government Life Insurance Fund such sums as may be necessary
to carry out the provisions of this section."
(4) Subchapter I of chapter 19 of such title is amended by adding at the end
thereof a new section as follows:
726. Post-service insurance for persons serving in combat zones
"(a) Any person entitled to indemnity protection under section 780 of this
title who is ordered to active duty with the Armed Forces in a combat zone as
defined in such section for a period of 30 days or more, or who served in such
zone for 30 days or more, shall, upon application in writing made within 120
days after separation from active duty and payment of premiums as hereinafter
provided, and without medical examination, be granted insurance. The insur-
ance granted under this section shall be issued upon the same terms and conditions
as are contained in standard policies of National Service Life Insurance except
(1) term insurance may not be renewed on the term plan after the insured's
50th birthday; (2) the premium rates for term or permanent plan insurance
shall be based on the 1958 Commissioners Standard Ordinary Mortality Table;
(3) all cash, loan, extended and paid-up insurance values shall be based on the
1958 Commissioners Standard Ordinary Mortality Table; (4) all settlements
on policies involving annuities shall be calculated on the basis of the Annuity
Table for 1949; (5) all calculations in connection with insurance issued under
this subsection shall be based on interest at the rate of 3)2 per eentum per anum;
(6) the insurance shall include such other changes in terms and conditions as the
Administrator determines to be reasonable and practicable; (7) the insurance and
any total disability income provisions attached thereto shall be on a noripar-
ticipating basis and all premiums and other collections therefor shall be credited
to a revolving fund established in the Treasury of the United States and the pay-
ments on such insurance and total disability provision shall he made directly
from such fund. Appropriations to such fund are hereby authorized.
"(b) The Administrator in authorized to set aside out of the revolving fund
established under subsection (a) of this section such reserve amounts as may he
be required under accepted actuarial principles to meet all liabilities on insurance
issued thereunder and any total disability income provision attached thereto.
The Secretary of the Treasury is authorized to invest in and to sell and retire
special interest-bearing obligations of the United States for the account of the
revolving fund. Such obligations issued for this purpose shall have maturities
fixed with due regard for the needs of the fund and shall bear interest at a rate
equal to the average market yield (computed by the Secretary of the Treasury on
 Approved For Release fi$ ilb i Pd1A!ftMt180&449R190o 11 E8
the basis of market quotation, as of the end of the calendar month next preceding
the date of issue) on all marketable interest-bearing obligations of the United
States then forming a part of the public debt which are not due or callable until
after the expiration of four years from the end of such calendar month; except
that where such average market yield is not a multiple of one-eighth of 1 per
contumn, the rate of interest of such obligation shall be the multiple of ono-eighth
of I per contum nearest such market yield."
(5) The analysis of s'ubcha,tor I of chapter 19 of such title is amended by
adding at the end thereof the l chewing:
"7211. Post service insurance for persons serving in combat zones.''
[11.3. 10821, 89th Long., let
A BILL To amend title 38 of the Uotte l States Code to establish a program of group life insurance which
shall be provided by private fnsurance companies for members of the uniformed services who are on th,
8entati
ves A~ricaeinCo gress a sembled,s Thad chap er e19eof title 38, United Sited Code
is amended by rcdesignating "Subchapter III-General" thereof as "Subchapter
IV--General" and by inserting immediately after subchapter II thereof the follow';
ing new, subchapter III:
"Subchapter III-Servicemen's Group Life Insurance
"?765. Definitions
`Tor the purposes of this subchapter`
` (1) The term `active duty' scans full-time duty as a commissioned or warrant
officer, eras an enlisted member of a uniformed service under a call or order to
duty that; does not specify a period of thirty days or less.
"(2) The team `member' means a person on active duty in the uniformed services,
in a commissioned, warrant, or enlisted rank or grade.
"(3) The term `uniformed services' means the, Army, Navy, Air Force, Marine'
Corps, Coast Guard, Coast and Geodetic Survey, and Public health Service.
766. Eligible insurance companies
"(a) The Administrator is authorized, without regard to section 3709 of the
Revised Statutes, as amended 41 U.S.C. 5), to purchase from one or more life
insurance
benefits companies a policy or policies of group life insurance to provide the
specified in this subchapter. Each such life insurance company must
(1) be licensed to issue, life insurance in each of the fifty States of the United
States addin the District of Columbia, and (2) as of the most recent December 31
for which information is available to the Administrator, have in effect at least 1
per eentum of the total amount of group life insurance which all life insurance
companieslhave in effect in the United States.
,hall establish an administrative loffice at applace ands under a nalme designated
by the Administrator.
em' (c) This Administrator shall arrange with the life insurance company or
conditionsapproved byoh m, or s f under this the total amount of insurance uunder
nder
such policy. or policies with sucl other life insurance companies as may elect to
participate'in such reinsurance.
"(d) The Administrator may at any time discontinue any policy or policies
which he has purchased from an , insurance company under this subchapter.
767. Persons insured; amount
Any policy of insurance purchased by the Administrator under section 766 of
this title shall automatically insure any member of the uniformed services on
active duty against death in the amount of $10,000 from the first day of such
duty, or from the date certified k y the Administrator to the Secretary concerned
as the date servicemen's group life insurance under this subchapter takes effect,
whichever date is the later date, unless such member elects in writing (1) not to
be insured under this subehapte?, or (2) to be insured in an amount less than
$10,000 which must be a multiple of $500, but may not be less than $1,000. No
person may parry a combined amount of national service life insurance on the
t m lan U
Approved For elEas'e ~~ 3~~ ~6 ' ?t':I1X'-RbO69RII0446ft1WB0GfloAA1000&9vice-
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2795
men's group life insurance in excess of $10,000 at any one time. Any person
insured under a permanent plan of national service life insurance or United
States Government life insurance may be insured under this subchapter but the
amount payable under his matured servicemen's group life insurance may not
exceed the difference between the face value of such permanent plan insurance
and $10,000, plus the actual cash value of such permanent plan insurance on the
date of the insured's death.
"? 768. Termination of coverage; conversion
"Each policy purchased under this subchapter shall contain a provision, in
terms approved by the Administrator, to the effect that any insurance thereunder
on any member of the uniformed services shall cease thirty-one days after his
separation or release from active duty, and that during the period such insurance
is in force the insured upon request to the administrative office established under
subsection 766(b) of this title shall be furnished a list of life insurance companies
participating in the program established under this subchapter and upon written
application to the participating company selected by the insured, proof of good
health satisfactory to such company, and payment of t e required premiums be
granted insurance on a plan then currently written by such company, which does
not provide for the payment of any sum less than the face value thereof or for
the payment of an additional amount as premiums if the insured engages in the
military service of the United States, to replace the servicemen's group life in-
surance in effect on the insured's life under this subchapter. For the purposes of
this section any member who is absent without leave for a period, of more than
thirty-ono days shall be deemed to have been separated from active duty as of the
date such absence commenced. Any such member absent without leave shall
be insured from the date he retul.os to active duty and there shall be deducted from
his basin pay an amount to cover the premiums for the period he was insured
during such absence.
769. Premiums; payment; investment; expenses
"(a) During any period in which a member is insured under the policy of in-
surance purchased by the Administrator, under section 706 of this title, there
shall be deducted each month from his basic pay until separation or release from
active duty, or otherwise paid, an amount determined by the Administrator
(which shall be the same for all such members) as the share of the cost attributable
to insuring such member under such policy, less any costs traceable to the extra
hazard of performance of active duty in the uniformed service. Any amount not
deducted from the basic pay of a member insured under this subchapter while on
active duty, if not otherwise paid, shall be deducted from the proceeds of any
insurance thereafter payable.
"(b) For each month for which any member is so insured, there shall be con-
tributed from the appropriation made for his pay an amount determined by the
Administrator and certified to the Secretary concerned to be the cost of such
insurance which is traceable to the extra hazard of the performance of active duty
in the uniformed services. Such costs shall be determined by the Administrator
on the basis of the excess mortality suffered by members of the uniformed services
on active duty above that incurred by the male civilian population of the United
States of the same age as the average age of members of the uniformed services
(disregarding a fraction of a year) as shown by the most current annual records
of the uniformed services and the Dopartment of Health, Education, and Welfare.
(c) An amount equal to the first premium due on any such insurance may he
advanced from current appropriations for active service pay to any such member,
which amount shall constitute a lieu upon any service or other pay accruing to
the person from whom such advance was made and shall be collected therefrom
if not otherwise paid. No disbursing or certifying officer shall be responsible for
any loss incurred by reason of such advance.
"(d)(1) The sums withheld from the basic pay of members, or otherwise paid,
tinder subsection (a) of this section, and the sums contributed from appropriations
under subsection (b) of this section, together with the income derived from any
dividends or premium rate adjustments received from insurers shall be deposited
to the credit of a revolving fund established in the Treasury of the United States.
All premium payments on any insurance policy or policies purchased under section
766 of this title and the administrative cost to the Veterans' Administration of
insurance issued tinder this subchapter shall be paid from the revolving fund.
"(2) The Administrator is authorized to set aside out of the revolving fund
such amounts as may be required to meet the administrative costs to the Veterans'
Administration of insurance issued under this subchapter and all current premium
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2796 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
payments on any insurance policy or policies purchased under section 786 of
this title. The Secretary of the Treasury is authorized to invest in and to sell
and retire special interest-bearing obligatiors of the United States for the account
of the revolving fund! Such obligations issued for this purpose shall have maturi-
ties fixed with due regard for the needs of tie fund and shall bear interest at a rate
equal to the average market yield (computed by the Secretary of the Treasury
on the basis of market quotations as of tin end of the calendar month next pre
ceding the date of issue) on all marketable, iutcrest-bearing obligations of the
United States then forming a part of the public debt which are not due or callable
until after the expiration of four years font the and of such calendar month;
except that where such average market yield is not a multiple of one-eighth of
1. per rectum, the rate of interest of such abligation shall be the multiple of one-
eighth of 1 per cerium nearest such market yield.
"(3) Notwithstanding the provisions of section 782 of this title, the Admin-
istrator shall, from time to time, dotermiae the administrative costs to the Vet-
erans' Administration which in his judgment are properly allocable to insurance
issued under this subchapter and shall transfer such cost from the revolving
fund to the appropriation General operating expenses, Veterans' Administration.'
770. Beneficiaries; payment of insurance
Any amount of servicemen's group life insurance in force on any member or
former member on the date of his death shall be paid, upon the establishment of a
valid claim therefor, to the person or fiesons surviving at the date of his death,
in the following order of precedence:
"First, to the beneficiary or belief ciaries as the member or former member
may have designated by a writing r ;eeived in the uniformed services prior to
such death;
"Second, if there be no such beneficiary, to the widow or widower of such
member or former member;
"Third, if none of the above, to the child or children of such member or
former member and descendants of deceased children by representation;
"Fourth, if none of the above, t.o the parents of such member or former
member or the survivor of them;
"Fifth, if one of the above, to the duly appointed executor or administrator
of the estatelof such member or former member;
"Sixth, if none of the above, to other next of kin of such member or former
member entitled under the laws of jomicile of such member or former member
at the time of his death.
"If any person otherwise entitled to payment under this section does not make
claim therefor within one year after the death of the member or former member,
of if payment to such person within th. it period is prohibited by Federal statute or
regulation, payment may be made in the order of precedence as if such person had
predeceased the employee, and any such payment shall be a bar to recovery by
any other person.
771. Basic tables of premiums; reidjustment of rates
"(a) Each policy of policies purohiusgd under, section 766 of this title shall in-
clude for the first policy year a ached ile of basic premium rates by ago which the
Administrator shall have determined on it basis consistent with the lowest aehedule
of basic promiuhn rates generally charged for new group life insurance policies is-
sued to large employers, this seheduic of basic premium rates by age to be applied,
except as otherwise provided in this section, to the distribution by age of the
amount of group life insurance under the policy at its date of issue to determine an
average basic premium per $1,000 o' insurance. Each policy so purchased shall
also include provisions whereby the basic rates of premium determined for the
first policy year shall be continued or subsequent policy years, except that they
may be readjusted for any subsequent year, based on the experience under the
policy, such readjustment to be made by the, insurance company, or companies
issuing the policy on a basis deturm tied by the Administrator in advance of such
year to be consistent with the general practice of life insurance companies under
policies of group life insurance issued to large employers.
"(b) Each policy so purchased shall include a provision that, in the event the
Administrator determines that ascertaining the actual ago distribution of the
amounts of group life insurance in force at the date of issue of the policy or at
the end of the first or any subsequent year of insurance thereunder would not be
possible except at a disproportionately high expense, the, Administrator may
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR TILE ARMED FORCES 2797
approve the determination of a tentative average group life promium, for the
first or any subsequent policy year, in lieu of using the actual age distribution.
Such tentative average premium rate shall be redetermined by the Administrator
during any policy year upon request by the insurance company or companies
issuing the policy, if experience. indicates that the assumptions made in deter-
mining the tentative average premium rate for that policy year were incorrect.
"(c) Each policy so purchased shall. contain a provision stipnkating the maxi-
mum expense and risk charges for the first policy year, which charges shall have
been dotermined by the Administrator on a basis consistent with the general level
of such charges made by life insurance companies under policies of group life
insurance issued to large employers. Such maximum charges shall be continued
from year to year, except that the Administrator may redetermine such maximum
charges for any year either by agreement with the insurance company or com-
panies issuing the. policy or upon written notice given by the Administrator to
such companies at. least one year in advance of the beginning of the, year for
which such redetermined maximum charges will be effective.
"(d) Each such policy shall provide for an accounting to the Administrator
not later than ninety days after the end of each policy year, which shall set forth,
in it form approved by the Administrator, (1) the amounts of premiums actually
accrued under the policy from its date of issue to the end of such policy year,
(2) the total of all mortality and other claim charges incurred for that period,
and (3) the amounts of the insurers' expense and risk charge for that period.
Any excess of the total of item (1) over the sum of items (2) and (3) shall be held
by the insurance company or companion issuing the policy as a special contingency
reserve to be used by Hoch insurance company or companies for charges under
such policy only, Such reserve to bear interest at a rate to be determined in
advance of each policy year by the insurance company or companies issuing the
policy, which rate shall be appproved by the Administrator as being consistent
with the rates generally used by such company or companies for similar funds
hold under other group life insurance policies. If and when the Administrator
determines that such special contingency reserve has attained an amount esti,
malted by the Administrator to make satisfactory provision for adverse fluetua-
tions in future charges under the policy, any further excess shall be deposited to
the credit of the revolving fund established under section 766 of this title. If
and when such policy is discontinued, and if after all charges have been made,,
there is any positive balance remaining in such special contingency reserve,.
such balance shall be deposited be the credit of the revolving fund, subject to
the right of the insurance company or companies issuing the policy to make
such deposit in equal monthly installments over a period of not more than two
years.
772. Benefit certificates
"The Administrator shall arrange to have each member insured under a policy
purchased under section 766 of this title receive a certificate setting forth the
benefits to which the member is entitled thereunder, to whom such benefits shall
be payable, to whom claims should be submitted, and summarizing the provisions
of the policy principally affecting the member. Such certificate shall be in lieu
of the certificate which the insurance company or companies would otherwise be
required to issue.
773. Forfeiture
"Any person guilty of mutiny, treason, spying, or desertion, or who, because
of conscientious objections, refuses to perform service in the Armed Forces of the
United States or refuses to wear the uniform of such force, shall folioit all rights
to servicemen's group life insurance under this subchapter. No such insurance
shall be payable for death inflicted as a lawful punishment for crime or for military
or naval offense, except when inflicted by an enemy of the United States.
774. Effective date
"The insurance provided for in this subchapter and the deductions and contri-
butions for that purpose shall take effect on the date designated by the Adminis-
trator and certified by him to each Secretary concerned."
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2798 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
SEc. 2. The analysis of chapter 19 of title 38, United States Code, is amended
(1) by reiesignating "Subchapter III-General" as "Subchapter Io-General"
and (2) by inserting after
"760 Waive, of premium payments on due date."
the following:
"Subchapter III-Servicemen's Group Life Insurance
"765. Defm.ffons.
766, Eligible insurance companies.
"76'7. Persons insured; amount.
1769. Termination of coverage; conversion.
"769, Prtii iu,ns; payment; investment; expenses.
"770, Bone icfaries; ammont of insurance.
"771. Basic tables off prem(mns; readjustment of rates.
"772. Benefit certificates.
"773. I`orfi in?e.
1774. Fee, Give date."
IILR. 10862, 89th Cong., 1st ses.l
A BILL To amend title 38 of the United States Code to establish a program of group life insurance which
shop be rmvidod by private insurance companies for mom bees of the seller mod services who are on active
duty
Be it enacted by the Senate and House of liepresentatives of the United States of
America in Congress assembled That chapter 19 of title 28, United States Code,
is amen led by redesignating "Subchapter III--General thereof as "Subchapter
I'V- General" and by inserting immediately after subchapter II thereof the
following new subchapter III:
"Subchapter III-Servicemen's Group Life Insurance
765. Definitions
"Fo? the purposes of this subchapter-
"(1) The term 'active duty' means full-time duty as a commissioned or warrant
officer or as an enlisted member of a uniformed service under a call or order to
duty that does not specify a period of thirty days or less.
"(2) The term 'member' means a person on active duty in the uniformed
servic^s in a commissioned, warrant, or enlisted rank or grade.
"(3 The term 'uniformed services' means the Army, Navy, Air Force, Marine
Corp,-, Coast Guard, Coast and Geodetic Survey, and Public Health Service.
"? 765.. Eligible insurance companies
"(a) The Administrator is authorized, without regard to section 3709 of the
Revised Statutes, as amended (41 U.S.C. 5), to purchase from one or more life
insurrnco companies a policy or policies of group life insurance to provide the
benefits specified in this subchapter. Each, such life: insurance company must
(1) be licensed to issue life insurance in each of the fifty States of the United
States and in the District of Columbia, and (2) as of the most recent December 31
for which information is available to the Administrator, have in effect at least
1 per century of the total amount of group life insurance which all life insurance
companies have in effect in the United States.
"(o) The life insurance company or companies issuing such policy or policies
shall estabiish an administrative office at a place and under a name designated by
the Adfninistrator.
"(c) The Administrator shall arrange with the life insurance company or
companies issuing any policy or policies under this subchapter to reinsure, under
conditions approved by him, portions of the total amount of insurance under
sunk. policy or policies with such other life insurance companies as may elect to
participate in such reinsurance.
"(d) The Administrator may at any time discontinue any policy or policies
which he has purchased from any insurance company under this subchapter.
767. Persons insured; amount
"Any policy of insurance purchased by the Administrator vender section 766
of this title shall automatically insure any member of the uniformed services on
active duty against death in the amount of $10,000 from the first day of such
duty; or from the date certified by the Administrator to the Secretary concerned
as the date servicemen's group life insurance under this subchapter takes effect,
Approved For Rel Ase 2 03/11/04: CIA-RDP67B00446R000500210005-9
 INDEMNITY OR INSURA FORCES `2,'799
Approved For Release 2003/11/04: CIA-RDP67B004 OOO5O 16B _19
whichever date is the later date, unless such member elects in writing (1) not to
be insured under this subchapter, or (2) to be insured in an amount less than
$10,000 which must be a multiple of $500, but only not be less than $1,000. No
person may carry a combined amount of national service life insurance on the
term plan, United States Government life insurance on the term plan and service-
men's group life insurance in excess of $10,000 at any one time. Any person
insured under it permanent plan of national service life insurance or United States
Government life insurance may be insured under this subchapter but the amount
payable under his matured servicemen's group life insurance may not exceed
the difference between the face value of such permanent plan insurance and
$10,000, plus the actual cash value of such permanent plan insurance on the date
of the insured's death.
"? 768. Termination of coverage; conversion
`Each policy purchased under this subchapter shall contain a provision, in
terms approved by the Administrator, to the effect that any insurance thereunder
on any member of the uniformed services shall cease thirty-one days after his
separation or release from active duty, and that during the period such insurance
is in force the insured upon req nest to the administrative office established under
subsection 766(b) of this title shall be furnished a list of life insurance companies
participating in the program established under this subchapter and upon written
application to the participating company selected by the insured, proof of good
health satisfactory to such company, and payment of the required premiums be
granted insurance on a plan then currently written by such company, which does
not provide for the payment of ally sum less than the face value thereof or for
the payment of an additional amount as promiu,ms if the insured engages in the
military service of the United States, to replace, the servicemen's group life in-
surance in effect on the insured's life under this subchapter. For the purposes of
this section any member who is absent without leave for a period of more than
thirty-ono days shall be deemed to have been separated from active duty as of
the date such absence commenced. Any such tncmber absent without leave shall
be insured front the ditto he returns to active duty and there shall be deducted from
his basic pay an. amount to cover the premiums for the period he was insured
during such absence.
769. Premiums; payment; investment; expenses
"(a) During any period in which a member is insured under the policy of
insurance purchased by the Administrator, under section 766 of this title, there
shall be deducted each month from his basic pay until separation or release from
active duty, or otherwise paid, an amount determined by the Administrator
(which shall be the same for all such members), as the shar3 of the cost attributable
to insuring such member under such policy, less any costs traceable to the extra
hazard of performance of active duty in the uniformed service. Any amount not
deducted from the basic pay of a member insured under this subchapter while
on active duty, if not otherwise paid, shall be deducted from the proceeds of any
insurance thereafter payable.
"(b) For each month for which any member is so insured, there shall be con-
tributed from the appropriation made for his pay an amount determined by the
Administrator and certified to the Secretary concerned to be the cost of such
insurance which is traceable to the extra hazard of the performance of active duty
in the uniformed services. Such costs shall be determined by the Administrator
on the basis of the excess mortality suffered by members of the uniformed services
on active duty above that incurred by the male civilian population of the United
States of the same ago as the average ago of members of the uniformed services
(disregarding a fraction of a year) as shown by the most current annual records
of the uniformed services and the Department of Health, Education, and Welfare.
"(c) An amount equal to the first premium due on any such insurance may he.
advanced from current appropriations for activeserviee pay to any such member,
which amount shall constitute a lien upon any service or other pay accruing to
the person from whom such advance was made and shall be collected therefrom
if not otherwise paid. No disbursing or certifying officer shall be responsible for
any loss incurred by reason of such advance.
"(d) (1) The sums withhold from the basic pay of members, or otherwise. paid,
under subsection (a) of this section, and the sums contributed from appropriations
under subsection (b) of this section, together with the income derived from any
dividends or premium rate. adjustments received from insurers shall be deposited
to the credit of a revolving fund established in the Treasury of the United States.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Reltofij 20DWAW A'TmWIRDP37eOO Y6RM06075nOW-98
All 1 remium payments on my insurance policy or policies purchased under sec-
tion 766 of this title and the administrative cost to the Veterans' Administration
of insurance issued under tris subchapter shall he paid from the revolving fund.
"(2) The Administrator is authorized to set aside out of the revolving fund
such amounts as may be recall od to meet the administrative costs to the Veterans'
Administration of insurance issued under this subchapter and all current premium
payments on any insurance policy or policies purchased under section 766 of this
title. The Secretary of the Treasury is authorized to invest in and to sell and
retire: special interest-bearing obligations of the United States for the account
of tht revolving fund. Suer obligations issued for this purpose shall have maturi-
ties fixed with due regard fc r the needs of the fund and shall bear interest at a rate
equal to the average market yield (Computed by the Secretary of the. Treasury on
the basis of market quotati ms as of the end of the calendar month next preceding
the rate of issue) on all marketable inl,crest-bearing obligations of the Untied
States then forming a part of the public debt which are not duo or eallal,le, until
after the expiration of four years from the and of such calendar month; except
that where such average market yield is not it multiple of one-eighth of I per
continue, the. rate of interes : of such obligation shall be the multiple of one-eighth
of 1 per centum nearest s ich market yield.
"($) Notwithstanding tie provisions of section 782 of this title, the Admin-
istrator shall, from time to time, determine the administrative costs to the
Veterans' Administration which in his judgment arc properly allocable to in-
suraaiee issued under this subchapter and shall transfer such cost from the revolving
fund to the appropriation 'General operating expenses, Veterans' Administration'.
"? 770. Beneficiaries; payment of insurance
"Any amount of servicemen's group life insurance in force on any member or
former member on the date of his death shall be, paid, upon the establishment of a
valid, claim therefor, to the person or persons surviving at the date of his death, in
the following order of precedence:
"First, to the beneficiary or beneficiaries as the member or former member
may have designated Sy a writing received in the uniformed services prior to
such death;
"Second, if there he no such beneficiary, to the widow or widower of such I
member or former mcr rber;
"This'd, if none of he above, to the child or children of such member or
former member and descendants of deceased children by representation;
"Fourth, if none of the above, to the' parents of such member or former
member or the survivor of them;
"Fifth, if none of the above, to the duly appointed executor or administrator
of the, estate of unali member or former member;
"Sixth, if none of tl.e above, to other next of kin of such member or former
member entitled unc er the laws of domicile of such member or former
~member at the time of his death.
"If any person otherwise entitled to payment under this section does not make
claim therefor within one year after the death of the member or former member,
or if payment to such person within that period is prohibited by Federal statute
any aymen t precedence
regulation,pa the emplyes, and made such l
shall a bar to recovery
prede by any other person,.
"? 771. Basic tables of premiums; readjustment of rates
"(a) Each policy or policies purchased under section. 766 of this title shall
include for the first policy year a schedule of basic premium rates by age which
the Administrator shall Lave determined on a basis consistent with the lowest
schedule of basic premium rates generally charged for new group life insurance
policies issued to large employers, this schedule of basic premium rates by age
to be applied, except as otherwise provided in this section, to the distribution
by age of the, amount of group life insurance wider the policy at its date of issue
to determine an average basic premium per $1,000 of insurance. Each policy
so purchased shall also i delude provisions whereby the basic rates of premium
determined for the first policy year shall he continued for subs cluent policy years,
except that they may be readjusted for any subsequent year, based on time ex-
pericnce under the policy, such readjustment to be made by the insurance com-
pany or companies issuing the policy on a basis determined by the Administrator
in advance of such year to he consistent with the general practice of life insurance
oI 'e roe life. insurance issued to large employer:.
Approved For Relea$ephd n'~Yd4 6f P97BOO446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR TilE ARMED FORCES 2801
"(b) Each policy so purchased shall include a provision that, in the event the
Administrator determines that ascertaining the actual age distribution of the
amounts of group life insurance in force at the date of issue of the policy or at the
end of the first or any subsequent year of insurance thereunder would not be
possible except at a disproportionately high expense, the Administrator may
approve the determination of it tentative average group life premium, for the
first or any subsequent policy year, in lieu of using the actual age distribution.
Such tentative average premium rate shall be redetermined by the Administrator
during any policy your upon request by the insurance company or companies
issuing the policy, if experience indicates that the assumptions made in deter-
mining the tentative average premium rate for that policy year were incorrect.
"(c) Each policy so purchased snail contain a provision stipulating the maxi-
mum expense and risk charges for the first policy year, which charges shall have
been determined by the Administrator on a basis consistent with the general level
of such charges made by life insurance companies under policies of group life
insurance issued to large employers. Such maximum charges shall be continued
from year to year, except that the Administrator may redetermine such maximum
charges for any year either by agreement with the insurance company or com-
panies issuing the policy or upon written notice given by the Administrator to
such rem antes at least one year in advance of the beginning of the year for
which such redetermined maximum charges will be effective.
"(d) Each such policy shall provide for an accounting to the Administrator
not later than ninety days after the end of each policy year, which shall set
forth, in a form approved by the Administrator, (1) the amounts of premiums
actually accrued under the policy from its date of issue to the end of such policy
year, (2) the total of all mortality and other claim charges incurred for that
period, and (3) the amounts of the insurers' expense and risk charge for that
period. Any excess of the, total of item (1) over the son of items (2) and (S)
shall be held by the insurance company or companies issuing the policy as a
special contingency reserve to be used by such insurance company or companies
for charges under such policy only, such reserve to bear interest at a rate to be
determined in advance of each policy year by the insurance company or Com-
panies issuing the policy, which rate shall be approved by the Administrator as
being consistent with the rates generally used by such company or companies for
similar funds held under other group life insurance policies. If and when. the
Administrator determines that such special contingency reserve has attained an
amount estimated by the Administrator to make satisfactory provision for adverse
fluctuations in future charges under the policy, any further excess shall be depos-
ited to the credit of the revolving fund established under section 766 of this title.
If and when such policy is discontinued, and if after all charges have been made,
there is any positive balance remaining in such special contingency reserve, such
balance shall be deposited to the credit of the revolving fund, subject to the
right of the insurance company or companies issuing the policy to make such
deposit in equal monthly installments over a period of not mere than two years.
"? 772, Benefit certificates
"The Administrator shall arrange to have each member insured under a policy
purchased under section 766 of this title receive a certificate setting forth the
benefits to which the member is entitled thereunder, to whom such benefits shall
be payable, to whom claims should be submitted, and summarizing the provisions
of the policy principally affecting the member. Such certificate shall be in lieu
of the certificate which the insurance company or companies would otherwise be
required to issue.
'9 773. Forfeiture
"Any person guilty of mutiny, treason, spying, or desertion, or who, because of
conscientious objections, refuses to perform service in the Armed Forces of the
United States or refuses to wear the uniform of such force, shall forfeit all rights to
servicemen's group life insurance under this subchapter. No such insurance shall
be payable for death inflicted as a lawful punishment for crime or for military or
naval offense, except when inflicted by an enemy of the United States.
774. Effective date
"The insurance provided for in this subchapter and the deductions and contri-
butions for that purpose shall take effect on the date designated by the Adminis-
trator and certified by him to each Secretary co cerned."
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2802 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
See. 2. The analysis of chapter 19 of title 38, United States Code, is amended
(1) by rodesignating "3ubchapter III--General" as "Subchapter IV-General"
and (2) by inserting after
"760. Waiver of premimn payments on duo date,"
the following:
"Subchapter III-Servicemen's Group Life Insurance
"Sec.
'1766, Definitions.
"'7G6, Eligible insurance cam mutes.
"767, Persons insured; amotU U.
1`768, Tornanation el 0overal 0; eonvors10a.
"769, PnOu u es; Payment; investment; expenses.
"770. Boneficiarles; paymen of insurance.
"'771, Basic tables of pramtru ns; readjustment of rates.
?1772. MOON oeAlocetm
11778. Pbrfeiture.
11774. F l etive date."
(1(, R. 10873, 89th Cong? Ist sass.]
A Bitt To amend title 38 of the United States Code to establish a program of group lire insurance which
shall he provided by private Insurance companies for members of the uniformed servicos who are on
active duty
Be it enacted by the Senate and Ilouse, of Representatives of the United States of
America in Congress assembled, That chapter 19 of title 38, United States Code,
is amended bly rodesignating "Subchapter 1II-General" thereof as "Subchapter
IV--General' and by inserting immediately after subchapter II thereof the
following new sube'lapter III:
"Subchapter III-Servicemen's Group Life Insurance
"? 765. Definitions
"For the purpose of this subchapter-
"(1) The to ?m 'active duty' means full-time duty as a commissioned or
warrant oiTicei, or as an enlisted member of a uniformed service under at
call or order to duty that does not specify a period of thirty days or less.
"(2) The term 'member' means a person on active duty in the uniformed
services in a commissioned, warianl, or enlisted rank or grade.
"(3) The turn 'uniformed services' means the Army, Navy, Air Force,
Marine Corps. Coast Guard, Coast and Geodetic Survey, and Public Health
Service.
"? 766. Eligible insurance companies
"(a) The Administrator is authorized, without regard to section 3709 of the
Revised Statutes, as amended (41 U.S.C, 5), to purchase from one or more life
insurance comparies a policy or policies of group life insurance to provide the
benefits specified in this subchapter. Each such life insurance company must
(1) be licensed to issue life insurance in each of the, fifty States of the United
States and in the District of Columbia, and (2) as of the most recant December
31 for which information is available to the Administrator, have in offect at ]cast
1 per centum of the total amount of group life insurance which all life insurance
companies have in effect in the United States.
h) Th,) life usurance company or companies issuing such policy or policies
shall establish an administrative office at a place and under a name designated
by the Administrator.
"(c) Tho Administrator shall arrange with the, life insurance. company or
companies issuirg any policy or policies under this subchapter to coinsure, under
conditions approved by him, portions of the total amount of insurance tinder
such policy or policies with such other life insurance companies As may elect to
participate in srch reinsurance.
"(d) The Administrator may at any time diseontinue any policy or policies
which be has purchased from any Insurance company under this subchapter,
"? 767. Persons insured; amount
"Any policy of insurance purchased by the Administrator under section 766
of this title scull automatically insure any member of the uniformed services on
active ditty against death in the amount of $10,000 from the first day of such
duty, or from l.he date certified by the Administrator to the Secretary concerned
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/1811T ~6Og9j1ON4C618(010B21U5 9 RcES 2803
as the date servicemen's group life insurance tinder this subchapter talces effect,
whichever data is the later date, unless such member elects in writing (1) not to
be insured under this subchapter, or (2) to be insured in an amount less than
$10,000 which must be a multiple of $500, but may not be less than $1,000. No
person may carry a combined amount of national service life insurance on the
term plan, United States Government life insurance on the term plan and
servicemen's group life insurance in excess of $10,000 at any one time. Any
person insured under a permanent plan of national service life insurance or
United States Government life insurance may be insured tinder this subchapter
but the amount payable under his matured servicemen's group life insurance may
not exceed the difference between the face value of such permanent plan insurance
and $10,000, plus the actual cash value of such permanent plan insurance on the
date of the insured's death.
"? 768. Termination of coverage; conversion
"Each policy purchased under this subchapter shall contain a provision, in
terms approved by the Administrator, to the effect that any insurance thereunder
on any member of-the Uniformed services shall cease one hundred and twenty
days after his separation or release from active duty, and that during the period
such insurance is in force the insured upon request to the administrative office
established under subsection 766(b) of this title shall be furnished a list of life
insurance companies participating in the program established under this sub-
chapter and upon written application to the participating company selected by
the insured and payment of the required premiums be granted insurance without
a medical examination on a plan then currently written by such company which
does not provide for the payment of any sum less the face value thereof or for
the payment of an additional amount as premiums if the insured engages in the
military service of the United States, to replace the servicemen's group life
insurance in effect on the insured's life under this subchapter. For the purposes
of this section any member who is absent without leave for a period of more than
thirty-one days shall be doomed to have been separated from active duty as of
the date such absence commenced. Any such member absent without leave shall
be insured from the date he returns to active duty and there shall be deducted
from his basic pay an amount to cover the premiums for the period he was
insured during such absence.
769. Premiums; payment; investment; expenses
"(a) During any period in which a member is insured tinder a policy of insur-
ance purchased by the Administrator, under section 766 of this title, there shall
be deducted each month from his basic pay until separation or release from
active duty, or otherwise paid, an amount determined by the Administrator
(which shall be the same for all such members) as the share of the cost attributable
to insuring such member under such policy, less any costs traceable to the extra
hazard of performance of active duty in the uniformed service. Any amount
not deducted from the basic pay of a member insured under this subchapter
while on active duty, if not otherwise paid, shall be deducted from the proceeds of
any insurance thereafter payable.
"(b) For each month for which any member is so insured, there shall be con-
tributed from the appropriation made for his pay all amount determined by the
Administrator and certified to the Secretary concerned to be the cost of such
insurance which is traceable to the extra hazard of the performance of active
duty in the uniformed services. Such costs shall be determined by the Admin-
istrator on the basis of the excess mortality suffered by members of the tmiformed
services on active duty above that incurred by the male civilian population of
the United States of the same age as the average age of members of the uniformed
services (disregarding it fraction of a year) as shown by the most current annual
records of the uniformed services and the Department of Health, Education,
and Welfare.
"(c) An amount equal to the first premium due on any such insurance only be
advanced from current appropriations for active-service pay to any such member,
which amount shall constitute a lien upon any service or other pay accruing to the
person from whom such advance was made and shall be collected therefrom if not
otherwise paid. No disbursing or certifying officer shall be responsible for any
loss incurred by reason of such advance.
"(d) (1) The sums withheld from the basic pay of members, or otherwise paid,
under subsection (a) of this section, and the sums contributed from appropriations
under subsection (b) of this section, together with the income derived from any
Approved For Release 2003~MIQ4obCIA-RDP67B00446R000500210005-9
 Approved For Relea (I00ffff41T6IA ~ ffi449~ 5 ydb g-V>;S
dividends or premium rate adjustments received from insurers shall be deposited to
the credit of a revolving fund established in the Treasury of the United States.
All premium payments or any insurance policy or policies purchased under section
766, of this title and the administrative cost to the Veterans' Administration of
insurance issued under this subchapter shall be paid from the revolving fund.
11(2) The Administrator is authorized to set aside out of the revolving fund
such amounts as may be required to meet the administrative costs to the Veerans'
Administration of insurar cc issued under this subchapter and all current premium
pa ments on any insurance policy or policies purchased under section 766 of this
title. The Secretary of IL Treasury is authorized to invest in and to sell and
retire special interest-bearing obligations of the United States for the account of
the revolving fund. Such obligations issued for this purpose shall have maturities
fixed with due regard fort ie needs of the fund and shall bear interest at a rate equal
to the average market yield (computed by the Secretary of the Treasury on the
basis of market quotations as of the end of the calendar month next preceding
the date of issue) on all marketable interest-bearing obligations of the United
States then forming a pa ?t of the public debt which are not due or callable until
after the expiration of four years from the end of such calendar month; except
that where such average market yield is not a multiple of one-eighth of 1 per
centum, the rate of interest of such obligation shall be the multiple of one-eighth
of L' per contain nearest such market yield.
"(3) Notwithstanding the provisions of section 782 of this title, the Adminis-
trator shall, from time to time, determine the administrative costs to the Veterans'
Administration which in his judgment are properly allocable to insurance issued
under this subchapter and shall transfer such cost from the revolving fund to the
appropriation `General operating expenses, Veterans' Administration'.
770. Beneficiaries; payment of insurance
"!Any amount of Servicemen's Group Life Insurance in force on any member or
former member on the ds.te of his death shall be paid, upon the establishment of
a valid claim therefor, to the person or persons surviving at the date of his death,
in the following order of precedence:
"First, to the beneficiary or beneficiaries as the member or former member may
have designated by a writing received in the uniformed services prior to such
death;
"Second, if there be no: uch beneficiary, to the widow or widower of such member
or former member;
"Third, if none of the above, to the child or children of such member or former
member and descendants of deceased children by representation;
"Fourth, if none of the above, to the parents of such member or former member
or the survivor of them;
"Fifth, if none of the above, to the duly appointed executor or administrator
of the estate of such member or former member;
"Sixth, if none of the above, to other next of kin of such member or former
member entitled under tie laws of domicile of such member or former member at
the'time of his death.
"If any person othcrwi.to entitled to payment under this section does not make
claim therefor within one year after the death of the member or former member,
of if payment to such person within that period is prohibited by Federal statute
or regulation, payment may be made in the order of precedence as if such person
had predeceased the amp. oyes, and any such payment shall be a bar to recovery
by any other person.
"? 771. Basic tables of premiums; readjustment of rates
`(a) Each policy or Policies purchased under section 766 of this title shall
include for the first policy year a schedule of basic premium rates by age which
the Administrator shall have determined on a basis consistent with the lowest
schedule of basic premium rates generally charged for now group life insurance
policies issued to large employers, this schedule of basic premium rates by age to
be applied, except as otherwise provided in this section, to the distribution by
ago Of tie amount of grow life insurance under the policy at its date of issue to
determine an average basic premium per $1,000 of insurance. Each policy so
purchased shall also include provisions whereby the basic rates of premium deter-
mined for the first policy year shall be continued for subsequent policy years,
except that they may be readjusted for any subsequent year, based on the ex-
perienco under the policy, such readjustment to be made by the insurance company
or companies issuing the policy on a basis determined by the Administrator in
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 advance of such year to be consistent with the general practice of life insurance
companies under policies of group life insurance issued to large employers.
"(b) Each policy so purchased shall. include a provision that, in the event the
Administrator determines that ascertaining the actual age distribution of the
amounts of group life insurance in force at the date of issue of the policy or at
the end of the first or any subsequent year of insurance thereunder would not
be possible except at a disproportionately high expense, the Administrator may
approve the determination of a tentative average group life premium., for the
first, or any subsequent policy year, in. lieu of using the actual ago distribution.
Such tentative average premium rate shall be redetermined by the Administrator
during any policy year upon request by the insurance company or companies
issuing the policy, if experience indicates that the assumptions made codetermining
the tentative average premium rate for that policy year were incorrect.
"(c) Each policy so purchased shall. contain a provision stipulating the maxi-
mum expense and risk charges for the, first policy year, which charges shall have
been determined by the Administrator on a basis consistent with the general level
of such charges made by life insurance companies tinder policies of group life
insurance issued to large employers. Such maximum charges shall be continued
from year to year, except that the Administrator may redetermine such maximum
charges for any year either by agreement with the insurance company or companies
issuing the policy or upon. written notice given by the Administrator to such com-
panies at least one year in. advance of the beginning of the year for which such
redetermined maximum charges will be effective.
"(d) Each such policy shall provide for an accounting to the Administrator
not later than ninety days after the end of each policy year, which shall sot forth,
in a form approved by the Administrator, (1) the amounts of premiums actually
accrued under the policy from its date of issue to the end of such policy year,
(2) the total of all mortality and other claim charges incurred for that period,
and (3) the amounts of the insurers' expense and risk charge for that period.
Any excess of the total of item (1) over the sum of items (2) and (3) shall be hold
by the insurance company or companies issuing the policy as a special contingency
reserve to be used by such insurance company or companies for charges under
such policy only, such reserve to bear interest at a rate to be determined in ad-
vance of each policy year by the insurance company or companies issuing the
policy, which rate shall be approved by the Administrator as being consistent
with the. rates generally used by such company or companies for similar funds
hold under other group life insurance policies. If and when the Administrator
determines that such special contingency reserve has attained an amount esti-
mated by the Administrator to make satisfactory provision for adverse fluctua-
tions in future charges under the policy, any further excess shall be deposited to
the credit of the revolving fund established under section 766 of this title. If
and when such policy is discontinued, and if after all charges have been made,
there is any positive balance remaining in such special contingency reserve, such
balance shall be deposited to the credit of the revolving fund, subject to the
right of the insurance company or companies issuing the policy to make such
deposit in equal monthly installments over a period of not more than two years.
772. Benefit certificates
"The Administrator shall arrange to have each member insured under a policy
purchased under section 766 of this title receive a certificate setting forth the
benefits to which the member is entitled thereunder, to whom such benefit shall
be payable, to whom claims should be submitted, and summarizing the provisions
of the policy principally affecting the member. Such certificate shall he in lieu
of the certificate which the insurance company or companies would otherwise be
required to issue.
773. Forfeiture
Any person guilty of mutiny, treason, spying, or desertion, or who, because of
conscientious objections, refuses to perform service in the Armed Forces of the
United States or refuses to wear the uniform of such force, shall forfeit all rights
to servicemen's group life insurance under this subchapter. No such insurance
shall be payable for death inflicted as a lawful punishment for crime or for military
or naval offense, except when inflicted by an enemy of the United States.
774. Effective date
"The insurance provided for in this subchapter and the deductions and con-
tributions for that purpose shall take effect on the date designated by the Admin-
istrator and certified by him to each Secretary concerned."
 Approved For Release ~9ea/111 ,,, - RM RPAPA2N9FORCOS
Ssc. 2. The analysis of chapter 19 of title 38, United States Code, is amended
(1) by redesignat:ng "SunenapTEa III-GENERAL" as "SUBCHAPTER IV--
GnNlaann" and (2) by inserting after
"760. waiver of raomian payment on due date."
the following:
"766. Eligible insurance o napanies.
"767. Persons insured; an omit.
"768. Termination of cove rage; conversion.
{ "760. Premiums; paynnm;; investment; expenses.
"770. Boneaclaries; paym-mt ofinsurance.
"771. Basin tables of premiums; readjustment of rates.
"772. Benefit certificates.
"772. Forfeiture.
"774. Iiffeetive date."
[8. 2127, 39tH Cong., let seas.]
AN ACT To amend tits, 38, United States Code, in order to provide spoetal indemnity Insurance for
members of i he Armed Gorces serving in combat zooms, and for other purposes
Be it enacted by the Senate and Mouse of Representatives of the United States of
i America in Congress assembled, That (a) chapter 19 of title 38, United States
Code, is amended by adding at the end thereof a new section as follows:
"? 789. Special indemnity insurance for members of the Armed Forces serving
in combs; zones
"(a) Any person on active duty with the Armed Forces in a combat zone
shall, as provided in this section, be automatically insured by the United States,
without coat to such person, against death in the principal amount of $10,000.
Such person shall be insured during the time that he serves in a combat zone,
and shall be deemed to have been serving in a combat zone at the time of his
death if he dies outsile of a combat one and (1) his death is determined by the
Administrator to ha"e been the direct result of an injury or disease incurred
While serving in a combat zone, and (2) the injury or disease from which such
iperson died was incurred not more than two years prior to death.
"(b) Upon certification by the Secretary of the military department concerned
of the death of any person automatically insured tinder this section, the Adminis-
trator shall cause the indemnity to be paid as provided in subsection (c) only
to the surviving spouse, child or children (including a stepchild, adopted child,
or an illegitimate child if the latter was designated as beneficiary by the inset-elf),
parent (including a stepparent, parent by adoption, or person who stood in loco
parentis to the insured at any time prior to entry into the active service for a
period of not less than one year), brother, or sister of the insured, including those
of the halfblood and hose through adoption. The insured shall have the right
to designate the baneiciary or beneficiaries of the indemnity within the classes
herein provided; to designate the proportion of the principal amount to be paid
to each; and to change the beneficiary or beneficiaries without the consent thereof
but only within the classes herein provided. If the designated beneficiary or
- beneficiaries do not, survive the insured, or if none has been designated,. the
Administrator shall mike payment of the indemnity to the first eligible class of
beneficiaries according to the order set forth above, and in equal shares if the
class is composed of more than one person. Unless designated otherwiye by the
i surod, the term 'parent' shall include only the mother and father who last bore
ttcat relationship to the insured. Any installments of an indemnity not paid to a
beneficiary during such beneficiary's lifetime shall be paid to the named contingent
beneficiary, if any; otlerwise, to the beneficiary or beneficiaries within the per-
mitted class next entitled to priority, but no payment shall be made to the estal
of any deceased person
"(c) The indemnity iha11 be payable in equal monthly installments of one hum.
cited and twenty ;in number with interest at the rate of 2y~ per contain per annum.
"(d) In the event an7 person was covered at the time of his death by automatic
indemnity under this teetion and was also insured against such death Tinder a
contract of national s.rviee life insurance or United States Government life
insurance, the indemnity authorized to be paid hereunder shall be a principal
amount equal to the difference between the amount of insurance in force at the
time of death and $10,000.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 20II9PPTWYM-WT@lPPP$04 %IfO b9 'fb66 48 2807
"(e) The Administrator is authorized to promulgate such rules and regulations,
not inconsistent with this section, as are necessary or appropriate to carry out its
purposes.
"(f) There is hereby authorized to be appropriated, out of any money in the
Treasury not otherwise appropriated, such sums as may be necessary to carry out
the provisions of this section for the payment of liabilities under this section.
"(g) Any person guilty of mutiny, treason, spying, or desertion shall forfeit all
rights to an indemnity under this section, but restoration to active duty after
commission of any such offense shall restore all rights under this section. No
indemnity shall be payable for death inflicted as a lawful punishment for crime or
for military or naval offense, except when inflicted by an enemy, as defined by the
President.
'Ti) As used in this section the term 'combat zone' means any area outside the
United States determined by the President to be an area in which units of the
Armed Forces of the United States have engaged in combat operations on or
after January 1, 1962, and before such date as may be determined by Presidential
proclamation."
(b) The analysis of subchapter III of chapter 19 of such title is amended by
adding at the end thereof the following:
'789. Special indemnity insurance for members of the Arined Forces serving In combat zones."
Sun. 2. Title 38 United States Code, is further amended as follows:
(1) Section 417~a) is amended-
(A) By deleting therefrom the words "under section 724 of this title"
and inserting in lieu thereof the words "in effect on January 1, 1959, and
continued in effect tinder section 724(a) of this title".
(B) By adding at the end thereof the following: "The prohibition against
the payment of dependency and indemnity compensation contained in this
subsection shall not apply to insureds who on or after the effective date of
this amendment die while on active duty in a combat zone as defined in
section 789 of this title, or within 120 days after duty in such a zone, or
(1) whose death is determined by the Administrator to have been the direct
result of an injury or disease incurred while serving in a combat zone, and
(2) the injury or disease from which such person died was incurred not more
than two years prior to death."
(2) Delete from the last sentence of subsection (c) of section 704 the words
"or section 725" each time they appear and insert in lieu thereof the words
"section 725, or section 726".
(3) Subsection (b) of section 724 is repealed and the following new subsections
are added to section 724:
"(b) After the date of enactment of this subsection any person who is on
active duty with the Armed Forces in a combat zone, as defined in section 7S9 of
this title, for a continuous period of 30 days or more and any person hereafter
ordered to such duty under orders for 30 days or more in such a combat zone,
who is insured under National Service Life Insurance or United States Govern-
ment Life Insurance shall be entitled, upon written application, to a waiver (with
the right to a refund after termination of such duty) of all premiums paid on
term insurance and that portion of any permanent insurance premiums paid
representing the cost of the pure insurance risk, as determined by the Adminis-
trator. All premiums due during the period the waiver is in effect must be
timely paid to maintain the insurance in force. Such waiver shall apply to
premiums becoming due after the first day of the first calendar month following
the date of enactment of this subsection, or the first day of the first calendar
month following entry on active duty with the Armed Forces in such a combat
zone, whichever is the later date, and during the remainder of such continuous
active duty in a combat zone for 120 (lays thereafter; however, no premium
becoming clue prior to the date of application for waiver under this subsection
shall be waived or refunded. Any premium waiver granted under this subsection
on a participating contract of insurance shall render such insurance nonpar-
ticipating during Cho period such premium waiver is in effect. Upon certification
of the period of combat zone duty by the Secretary of the military department
emmorned, and upon application by the insured, or in death oases by the benc-
ficiary of his insurance, the Administrator shall refund to the insured or to the
beneficiary the amount of premiums waived under this subsection. Premiums
on term insurance waived under this subsection shall be re'fuiided with interest as
determined by the Administrator.
"(c) Whenever benefits become payable because of the maturity of such
Approved For ReleaswtFt40131114104er GWj ROp6WR0Q14 ")a5ft21f660e i- 'ility for the
 Approved For Release 3/1 i '1lt3 ACI'L?P 662f46hiM5bT#24WOS-9'o11CES
payment of such benefits shall be borne by the, United States in an amount which,
when added to any reserve of the policy nt the time of maturity, will equal the then
value of such bonefitd under such policy. Where life contingencies are involved
in the calculation of 1 be value of such benefits, the calculation of such liability or
liabilities shall be based upon such mortality table or tables as the Administrator
may prescribe with irtemst at the rate of 3 per contnm per annum as to National
Service Life Insurane. which was participating before waiver was granted, and 3}e
per contain per annum as to United States Government Life Insurance. The
Administrator shall transfer from time to time from the National Service Life
Insurance appropriation to the National Service Life Insurance Fund and from
the Military and Naval Insurance appropriation to the United States Government
Life Insurance Fund ;inch sums as may be necessary to carry out the provisions of
this section."
(4) Subchapter I of chapter 19, of such title is amended by adding at the end
thereof a new section as follows:
11726. Post-service insuranc3 for persons serving in combat zones
"(a) Any person entitled to indemnity protection under section 789 of this title
who is ordered to active duty with the Armed Forces in a combat zone as defined
in such section for a period of 30 days or more, or who served in such zone for 30
days or more, shall, upon application in writing made within 120 (lays after separa-
tion from active duty and payment of premiums as hereinafter provided, and
without medical examination, be granted insurance. The insurance granted
under this section shall he issued upon the same terms and conditions as are con-
tained in standard policies of National Service Life Insurance except (1) term in-
surance may not be r3newed on the term plan after the insured's 50th birthday;
(2) the premium rates for term or permanent plan insurance shall be based on the
1958 Commissioners 1tandard Ordinary Mortality Table; (3) all cash, loan, ex-
tended and paid-up insurance values shall be based on the 1958 Commissioners
Standard Ordinary Mortality Table; (4) all settlements on policies involving
annuities shall be calculated on the basis of the Annuity Table for 1940; (5) all
calculations in connection with insurance issued under this subsection shall be
based on interest at the rate of 344 per eentum Vol, annum; (6) the insurance shall
ncludo such other changes in terms and conditions as the Administrator deter-
mines to be reasonable and practicable; (7) the insurance and any total disability
income provisions attached thereto shall be on a nonparticipating basis and all
premiums and other collections therefor shall be credited to a revolving fund
established in the Treasury of the United States and the payments on such insur-
ance and total disability provision shall be made directly from such fund. Appro-
priations to such fund are hereby authorized.
'(b) The Administrator is authorized to set aside out of the revolving fund
established under subsection (a) of this section such reserve amounts as may be
f?equired under accepted acturial principles to meet all liabilities on insurance
issued thereunder and any total disability income provision attached thereto.
The Secretary of the Treasury is authorized to invest in and to sell and retire
special interest-bearing obligations of the United States for the account of the
revolving fund. Such obligations issued for this purpose shall have maturities
fixed with due regard for the needs of the fund and shall bear interest at a rate
equal to the average market yield (computed by the, Secretary of the Treasury on
the basis of market quotations as of the end of the calendar month next preceding
the date of issue) on all marketable interest-bearing obligations of the United
States then forming a part of the public debt which are not due or callable until
after the expiration o' four years from the end of such calendar month; except
that where such average market yield is riot a multiple of one-eighth of 1 per
centum, the rate of interest of such obligation shall be the multiple of one-eighth
of 1 per confirm nearest such market yield."
(5) The analysis of subchapter I of chapter 19 of such title is amended by
adding at the end thereof the following:
"726. Posteervice insurance or persons serving in combat zones."
(6) Section 3107 of such title is amended by adding at the end thereof a new
subsection as follows:
"(d) If the survivirg spouse of a deceased person covered by indemnity insur-
ance has remarried, of if any of such person's children are not in the custody of a
surviving spouse, all or any part of the indemnity insurance otherwise payable
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Relea '~Mlfvii z'd6 ( 440668obliift524409
to such spouse may be apportioned on behalf of surviving children or parents as
may be prescribed by the Administrator."
Passed the Senate August 19 (legislative day, August 18), 1965.
Attest:
FELTON M. JOHNSTON,
Secretary.
Mr. EVERETT. Without objection, there will be inserted at this
point in the record a letter received from the Honorable Halo Boggs,
along with a letter which he furnished from Miss Penn Cuney.
Following Miss Cuncy's letter, there will be inserted a letter dated
August 16, 1965, with attachment, addressed to Mr. Stephen S.
Jackson, Special Assistant, Assistant Secretary of Defense, by Mr.
James C. Higgins, vice president of Marsh & McLennan, which has
reference to proposed Armed Forces group life insurance.
HOUSE OF REPRESENTATIVES,
Hon. OLIN D. LEAGUE, Washington, D.C., September S, 1966.
Chairman, Committee on Veterans' Affairs,
House of Representatives,
Washington, D.C.
DEAR Mn. CIIAIRmAN: In connection with forthcoming hearings on S. 2127
I should like to forward the enclosed recommendation from one of my constituents,
Miss Penn Cuney.
Any appropriate consideration that can be given her proposal will be appreci-
ated.
Sincerely,
Hon. HALE BOGGS,
House Office Building,
Washington, D.C.
HALE BOGOs,
Member of Congress.
NEW ORLEANS, LA., August .31, 1965.
DEAR REPRESENTATIVE BOGGS: It has come to my attention that the Senate
recently passed bill S. 2127, introduced by Senator Talmadge, which provides
$10,000 special indemnity insurance against death for members of the Armed
Forces serving in combat zones on or after January 1, 1962, and the bill now goes
to the House Veterans' Affairs Committee for consideration.
As the aunt of a 20-year-old nephew, Michael Stephen Andriola, Navy 599-50-
25, who was killed on April 28, 1965, at a military base, in Iceland, I am urging
you to support an amendment to the bill which would extend coverage to any
serviceman who has died while on active duty on or since January 1, 1962. As I
am sure you are aware, no GI insurance could even be purchased in March 1963,
the date of Mike's enlistment. His parents do not qualify for benefits available
under the dependency and indemnity compensation law as their income is slightly
above the limitation specified in that law.
The loss of this fine young man is an irreplaeable one, but as he gave his life
in the service of our country, we naturally believe whatever benefits, recognition,
and the like are made available to survivors of other men, though killed in combat
zones, should be available to this parents.
Please be assured any assistance you can give in this matter will be greatly
appreciated by all the members of my family, and I am sure, by many other
bereaved relatives throughout the Nation who have suffered a similar loss.
Sincerely yours,
(Miss) PENN CUNEY,
Law Clerk to Chief Justice John B. Fournet, Supreme Court of Louisiana.
 Approved For Release 2003M W04 :iGMARDP67B004 0D90:Ot21OO05SfED FORCES
AuousT 16, 1965.
Re Armed Fortes group life insurance.
Mr. STEPHEN S. JACKSON,
Special Assistant,
Assistant Secretary of Defense,
Washington, D.C.
DEAR MR. JACKSON: In accordance with our discussion in your office on July 27,
I am enclosing an outline of a group life insurance program for members of our
Armed Forces Such a program would make available low-cost, nonmedical
insurance to cl-ery serviceman, regardless of age, duty, or location, thus filling a
need which has existed for many of our men (particularly those nonmarried
individuals whose beneficiaries are entitled to limited cash paytnents of $800 to
$3,000), for a nambor of years. While the Vietnam war has highlighted and empha-
sized the need for insurance by members of the Armed Forces, we believe that a
large percentage of the servicemen recognize the need for additional protection
for their families in the event of death as a result of natural or accidental causes.
When NSLI in as closed to new entrants more than. 10 years ago, acquisition of
insurance by [ervieemen became more difficult, more costly, and consequently
more haphazard. A grout life insurance plan similar to that available to civilian
employees of the Federal Government would do much to solve this basic problem..
The plan suggested is one that would be underwritten by the insurance industry
with one or more of the leading insurance companies as the administering company
and reinsured iy every life insurance company which meets certain basic criteria
and wishes to participate in the program. The group contract would be issued to
an agency of he Federal Government, perhaps the Department of Defense or
Veterans' Administration and would provide insurance for death from any cause.
The so-called war risk element could be covered by allocation of part of the
Government slam of the total premium to the war risk which would be separately
experience rated.
Alt:ernativel,r, the policy could be written excluding the war risk coverage
assuming the Govermincut would provide this coverage independently of the group
contract.
The eongresmlonal activity last week on this subject seems to indicate some
early action with respect to the war risk coverage. Ilowever, we suggest that this
is only part of the insurance problem facing American servicemen, and that it is
therefor timely for consideration to be given to a broad program such as that in the
attached outline.
Our discussion with several of the loading life insurance companies indicates
that support and cooperation of the insurance industry would be immediately
given to this p ?ogram.
I shall look forward to meeting with you and your associates for a review of
this plan. Thank you for the courtesies extended by you to Mr. Foley, Mr.
I-Ioagiand, and myself.
Very truly yours,
MARSH & MCLENNAN,
JAMES C. IlirmcuNS
Vice President.
ARMED FORCES GROUP LIFE INSURANCE
Form of polcy.-Group term life insurance including waiver of premium in
event of total and permanent disability-issued to DOD or VA or other Govern-
ment agency.
Amount of) is surance.--$10,000.
Beneficiary.--Payable to person or persons designated by insured individual.
Limitations.- -Payable in event of death for any reason. No medical examina-
tion required, no restriction on duty or location.
Conversion.--Couvertiblc within 31 days upon leaving the Armed Forces to
individual pali;y of like amount without physical examination.'.. Rate based on
attained ago of insured person.
Coverage on retirement.-After 20 years of service but less than 30 years of serv-
ice, $2,500; after 30 years of service, $4,000.
Prerrtium.-'_'o be determined but in the area of 40 to 50 cents per month per
$1,000. As in the Federal employees group life plan we suggest payment of
one-third of premium by the Government and two-thirds by the serviceman.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 YNDEMNITY OR INSURAN
Approved For Release 2003/11/04: CIA-
Experience rating.-Experience credits would be determined based on each
year's claim experience and would be paid in cash to reduce the Government's
net cost.
Premium collection.-By allotment.
Underwriters.-One or more administering comppanies. Reinsured with all
interested life insurance companies similar to FEGLI.
Mr. IVERETT. The Veterans' Administration has furnished a
number of examples of monetary benefits which would be payable
to survivors of service personnel who die of service-connected causes
at the present time. It will be noted that the amount of payments
of various types of benefits depends upon the age of the individual
serviceman at death, the number of his dependents, his rank and
length of service at the time of his death, and various other factors.
I ask that these examples be inserted in the record at this point in the
proceedings.
(The material furnished by Veterans' Administration follows:)
SuRVA'oISHIP BENEFITS FOR SERVICEMEN DYING FROM SERVICE-CONNECTED.
Case No. 1 CAUSES
1. Sergeant, U.S. Army. ASSUMPTIONS
2. Age 25 at death.
3. Death was service connected.
4. Seven years' service at death.
5. Three years in grade at death.
6. Average earnings; $25t.10 a month (base pa, .
7. Left a widow, age 25, and two children, ages 1 and 3.
8. Widow lives out her expectation of life (50.8 years).
9. Children receive maximum number of payments.
10. Widow does not remarry.
BENEFITS
Pa ee
y
Paying
agency
Type of payment
Haymont
period
(m(nths)
Payment
rate
Total
payments
Widow -------------------
2d Child -
HEM
nEW
Social security----____
----
X204
.$03.80
$13
016
20
--------------
1stchild .________ ___._.-_
7IEW
____.do_____________________
a
1222
163.80
,
.
14,788.80
Widow --------------------
VA
- ___
________----
Social l security (38 U.S.C.
+105
a 105
s 81.80
81
30
13,414.80
13
Do
(a))
.
, 414. 60
________________
2d child
___________________
VA
VA
DIC
__--_____-___-.---
WOEA
609
151.00
91,959.00
1st child __________
VA
_
__
_--
_
_
_
-
-
--
_
__
WOEA
30
110. 00
3,960.00
T
.
-_
.
.
_
.
_
_
_
_
30
110.00
3,960.00
otal ---__..__..___
I Until youngest child reaches 18.
1204 months to age 18 plus 48 months in full-time training.
1$63.80 to age 18; $73.90 from ago 18 through ago 21.
4 180 months to ago 18 plus 48 months in full-time training.
5 $63.80 to ago 20; $73.90 from age 20 through age 21.
1 Beginning at age 62.
Case No. 2
1. Sergeant, U.S. Army.
2. Age 25 at death.
3. Death was service connected.
4. Seven years' service at death.
5. Three years in grade at death.
6. Average earnings, $251.10 a month (base pay).
7. Left dependent parents, each age 50 (no income other than shown).
8. Left no widow or child,
9. Parents live out their expectations of life (mother: 27.7 years; father: 23
years).
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 ~*g1b ARMED FORCES
Approved For Release 2003/11 /d$1.4IA PffM0 044M#6b#bb2 6
Payment
eriod
pay-
ment
enefits
--
Payer
Paying
Type of payment
p
(months)
rate
agency
[EW
Total
Father------ ------
VA
DIC-.__.________-____._
+ 144
2132
2
$55.0)
22.00
h92
------
Social security (38 U.S.C.
132
76.30
0,071 f
_-____.
412(a)).
---
-------
0,071
$20,895
Total. -----
---------
-
Mother ---- .-------
VA
DIC_____________________
2132
22. CIO
0
2,904
____-__
_.____
456
60.00
2,800
-
--------
Social security (38 U.S.C.
3132
76."a0
--_-.--
10,071
------
412(x)).
156
84.0
--------
4,704
--------
024
14,775
4
28,396
Total ______
________
______________
1
--------
24,498
-
24,846
49,294
Grant totaL_
-__-----
-
3 As 1 or 2 parents to ago 62.
2 Rate adnsknlent due to social security income.
a Social security as 1 of 2 parents from age 62.
4 Rate of 3yment as sole surviving Parent.
3. Death was service connected.
4. Seven years' service at death.
5. Three years in grade at death.
6. Average earnings, .$558.60 it month (base pay).
7. Left a widow, age 25, and two children, ages 1 and 3.
8. Widow lives out her expectation of life (50.8 years).
9. Children receive maximum number of payments.
10. Widow does not remarry.
BENEFITS
Case No. 3
1. Capiain, U.S. Army.
2 Age 25 at death.
Pay-
mint
period
(months)
Pay-
ment
rate
Widow ---_-_--________
2d child ------- -------- ---
1st child----: -------------
Widow---________________
HEW
HEW
IIEW
VA
Social security --------------
----- do__.--------------------
----- do__.-__-_____-_____
security (38 U.S.C.
94
2
r 204
252
228
165
$102. CO
102.00
102.00
112.20
$20,808
25,704
23,256
18,513
D
VA
1
(a
DIC_ __________ ________
609
188.00
110
00
114, 492
900
3
----- ------------
il
VA
WOEA._-_________. _. _
36
.
110
00
,
960
3
d___________________
2d ch
1st child ------------- __
VA
W OEA_ _.._-.
30
.
,
3 Until youngest child reaches ago IS.
2 204 runtlis to 180 in, nths to eg6 18 plus 48 months in full-time training.
4 Bogimdng at age 62.
Case No. 4
1. Captain U.S. Army.
9 Ann 25 at death.
4. Seven years' service at death.
5. Thr;e years in grade at death.
6. Base pay at death was $558.60 a month (assumed average monthly wage,
$100)
Approved For Releasel2603/11/04: CIA-RDP67B00446R000500210005-9
~1
 Approved For ReIdNI2DW19$0 'TSCYA bFFffB r44gRftg86~gbo0 -43
7. Loft dependent parents, each ago 50 (no income other than shown).
8. Left no widow or child.
0. Parents live out their expectations of life (mother: 27.7 years; father: 23 years).
BENEFITS
Total_ ____--
0rand total...
DIC---- _----- ______
Social security (38
U.S.C. 412(a).
Payment
per led.
(months)
$55
2 Nona
102
55
2 None
38
102
112.20
7,920 -----
.-- ..--
--- .
1,848 ia
,464
--------- 6,283
9,768 I 10,747
I As 1 of 2 parents to ago 62. exceeds $2,400 a
2 DIG terminated because combined social security of both parents, which is income,
year permitted maximum.
Social security as 1 oft parents from age 62.
4 Rate of Payment as solo surviving Parent.
1. Private, first class, U.S. Army.
2. Age 20 at death.
3. Death was service connected.
4. Two years service at death.
5. Two years in grade at death;
6. Assumed average monthly pay was $160.
7. Base pay at death was $148.50 a month.
8. Left a widow, age 20, and a child, age I.
9. Widow lives out her expectation of life (55.6 years).
10. Child receives maximum number of payments.
11. Widow does not remarry.
BENEFITS
Paying
t
f
Payment
pe
rrted
Payment
rate
Total
payments
Payee
----
agency
----
paymen
Type o
-------------
e
s)
(
h
------
--
------
Widow------------------
HEW ---
Social security------------r-
1204
2
%
$60.30
30
60
$12,301.20
195.60
15
Ohild_______ _____
HEW--.-
VA
_____ do s__cu_._rity(38 U__________
Social e. S.G.
25
163
.
06.30
,
10,800.00
Widow ------------------
412(-)).
667
138.00
92,046,00
Do_-___ -----------
------- _------
Child
VA -----
VA__.__
DIC_ _
WOEA----------
36
110.00
3,060.00
-----
__________
134,309.70
Total______________
_________
.
i Until child reaches ago 18.
2 204 months to age 18 plus 48 months in full-tine training.
Beginning at ago 62,
1. Private, first class, U.S. Army.
2. Age 20 at death.
3. Death was service connected.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/64IClW L }f3 4 &dff&?Qb W9A1tMEn FORCES
4. Two years' service, at death. _
5. Two years in grade at death.
0. Aasuumc. average monthly pay was $160.
7. 13ase~pa? at death was $148.50 a month.
8. Left deplndont parents (no other income), ago 45.
9. Parents live out their expectations of life (mother: 32.1 years; father: 27.1
years).
Pays a
Paying
agency
Type of payment
Payment
period
Payment
r
t
Total
(months)
a
e
payments
Mother-------- _----------
VA
Serial security 38 U.S.C.
2181
'$60.30
$11
274.30
Father_._..____________
VA
412(a).
do
,
__
Mother -------- -----------
VA
___..
----___--___------_
DIC------
a 121
385
60.30
4 66
7,296.30
Father
---- _-__--.--------
VA
--------------_
DIC.... _------- --------
325
.00
a 55.00
19,173.00
15,213.00
Total_____ ___________
_____._____.
------------
62,956.60
s Beginning at age 62,
2 Increasing t( $66.30 after death of the father.
a Beginning at age 62.
( Decreasing t) $33 at age 62 and then increasing to $06 after death of the father.
Decreasing to $33 at ago 02.
Case No. 7
ASSUMPTIONS
1. Second lieutenant, U.S. Army.
2. Age 23 at death.
3. Death was service connected.
4. Four yel Ts' service, at death.
5. Four yes IS in grade at death.
0. Assumed average monthly pay was $329.
7. Base pat at death was $384.30 a month.
8. Left a w dow, age 23, and a child, age 3.
9. Widow lives out her expectation of life (52.7 years).
10. Child receives maximum number of payments.
11. Widow does not remarry.
BENEFITS
Paying
agency
Typo of payment
Payment
period
(months)
Payment
rate
Total pay-
meets
Widow_____________________
ild
IIEW
Social security --------------
1180
$90
$16
200
__--------- _------ ----
Widow _____________________
IfEw
VA VA
..... ao___________
Social security (38 U.S.C.
x168
x104
90
99
,
16,23
136
18
6
412----.
,
Do -- -----------------
Child-_ - _.____.-..______
VA
VA
WIC----------------------
WOEA
636
167
/03,960
___
_____________________
38
110
3,960
Tatal_________
_
_
_
_
_____
_________
__________
_____------
162,460
( Until child roe rhos age 18.
%180 months to age 18 plus 48 months in full-time training.
a Beginning at ; go 62.
Approved For Release, 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2815
1. Second lieutenant, U.S. Army.
2. Age 23 at death.
3. Death was service-connected.
4. Four years' service at death.
5. Four years in grade at death.
6. Assumed average monthly pay was $329.
7. Base pay at death was $384.30 a month.
S. Left dependent parents (no other income), each ago 50.
9. Parents live out their expectations of life (mother: 27.7 years; father: 23 years).
Mother ------- ------ .____
Father__..__________..__.
Mother..._.___..__..__.___
Father______ __________
Social security (3S U.B.C.
412(a)).
---- o.------------------ ._
DIG----------------------
DIG
Pa}nnont
period
(months)
I Beginning at age 62.
2 Increasing to $09 after death of the father.
a Beginning at age 62.
1 Decreasing to $11 at age 62 and than Increasing to $50 after death of the father.
e Decreasing to $11 at age 62.
Pay-
ment
rate
$17,424
11,880
12,172
9,872
Mr. EVERETT. The Veterans' Administration has also furnished a
number of tables which furnish comparative information related to the
cause of in-service deaths in Vietnam and in areas other than Vietnam.
This material is quite pertinent to this hearing, and I ask unanimous
consent that it be printed at this point in the record, and following
those tables material which the Department of Defense has furnished
which summarizes total deaths in the service from January 1, 1962,
through June 30, 1965, by service; deaths in service from 1958 through
1965; "hot spot" deaths, by cause of death, 1961 through 1965; and a
table showing deaths in Vietnam and the Dominican Republic, from
January 1, 1962, through August 16, 1965, by service and rank of the
decreased servicemen.
(The following material was furnished by the Veterans' Administra-
tion:)
 DEATHS IN Saavrca-NOT THE RESULT OF COMBAT
NOT IN VIETNAM IN VIETNAM
Period of service to date of death: Period of service to date of death:
June, 16, 1952, to May 3, 1962. September 30, 1963, to March 23, 1965.
Facts: Serviceman was a passenger Facts: Serviceman died as a result of
in a military vehicle returning from internal hemorrhage sustained when he
observing night firing of tanks on a was pinned between a forklift and an-
firing range. The tank firing had been other vehicle. Death occurred near
in progress for approximately 2~l hours Da Nang, Vietnam. Accident resulted
from 2145 to 0J15. The tank firing was from faulty brakes on forklift which ran
being conduetad, under combat condi- into him while he was engaged in mo-
tions. The nllitary vehicle in which loading supplies from an LST.
the serviceman was a passenger was
traveling for 2 miles on blackout lights.
While going around a curve, the jeep
(militaryy vehicle) skidded and over-
turned. The jeep crushed the service-
man who was apparently killed instantly.
Period of eervice to date of death: Period of service to date of death:
April 9, 1943, to March 19, 1946; Sop- June 14, 1964, to March 20, 1965.
tember 4, 1957, to December 7, 1.962.
Facts: Serviceman died on Decem- Facts: Serviceman died aboard LST
her 7, 1902, at -- --, N.Y., as a result at sea. Exact cause of death nn-
of a coronary thrombosis attack. known. Most probable cause of death
myocardial infarct or pulmonary em-
bolism. No autopsy performed.
Period of service to date of death: Period of service to date of death:
September 1i, 1958, to September 13, January 17, 1963, to July 4, 1965.
1959.
Facts: Serviceman died on September Facts: Serviceman died aboard U.S.S.
13, 1959, in F ores, as a result of encepha- -- at sea, apparently in water off
lifts (inflammation of the brain). Vietnam, as the result of encephalitis,.
Period of service to date of death: Period of service ca date of death:
June 13, 1956, to July 2, 1958. January 30, 1963, to May 23, 1965.
Facts: Serviceman while on duty in Facts: Serviceman died at Chu Lai,
Germany was on authorized leave and Vietnam, as result of accidental drown-
drowned while swimming in --- ing. On May 23, 1955, the serviceman
Lake, - Germany. and three other marines received per-
Period o' service to date of death:
January 27, 1956 to December 31, 1959.
Facts: Serviceman died December 31,
1959, in a military aircraft accident at
Keflavik Airport, Iceland. He was a
navigator radar intercept officer.
Period cf service to date of death:
October 8 1957, to February 22, 1958.
Facts: Serviceman was copilot in
helicopter, which was one of a formation
of seven helicopters on route on orders
to Fort Lewis, Wash., from Fort Riley,
Kans. Daring flight adverse weather
conditions necessitated a "turn back"
order. Four of the seven aircraft went
out of control. Two helicopters crashed
into a hit side and burned. Pilots and
crews of both helicopters were killed
instantly.
mission to go to the beach to swim for
recreation. While swimming be sud-
denly disappeared. His body was ro-
covered. No negligence on anyone's
part is shown.
Period of service to date of death:
An gust 29 1961, to November 21, 1964.
Facts: 4erviceman's death was duo
to helicopter crash when helicopter on
which he was crew chief crashed into sea
approximately 2 miles from the aircraft
carrier U.S.S'. Princeton. Aircraft ap-
parently operating off shores of Vietnam.
Period of service to date of death:
June 20, 1963, to June 6, 1965.
Facts: Serviceman died June 6, 1965,
near Chu Lai, Republic of Vietnam,
from the results of injuries sustained
when helicopter in which he was copilot
collided with another helicopter shortly
after taking off from U.S.S. Iwo Jima
and crashed into spa.
 Approved For ReWea8se Ibff3If I FM & ~7 0446R000500210005-9
(The following tables were furnished by the Department
Defense:)
Summary of total deaths from Jan. 1, 1962, through June 30, 1966
tal deaths:
To
Calendar year 1962--------- -_--____.._
Calendar year 1963________
Calendar Year 1904__________________________
Jan.l to June 30,1866_--------_____________
Orand total ------------------ ------------
cation of deaths in Percentage.
Lo
O vorsens__________________________________
United States ----------- ................ (P?eifle)---------------------------------
(Llmope)______________________________
______________________________
(Other) ?11505 in percentage
:
C
Natural deaths (lucindes disease) ------------
?ccidcnts________________________
Aircraft ----------------
Vehicular accidents ident___ _____
Other Vehicular drownin
Totnlaccidental deaths_._______._______
tlerdes ------------ ____________ _________
St
oscaction __.__________________________
Miseullanll?ncous____________ ___________________
Army
Navy
Marines
Air Force
Total
1,638
1,069
247
1,385
4,369
1, 613
1
691
1,103
130
1
347
327
1,384
1,348
4,447
4,496
,
1
,330
,
517
441
662
2,966
6,278
3,809
1,412
4,759
16,258
70
68
69.9
------- _--__
__--------
30
32
30.1
_----_____
--_______
(20)
--------- -
____----._
,
_--______
----------
(8
______
____________
___________
________
2)
__-_-----
---- --------
___ -
_
25.4
14 .4
13.0
27.7
______
15.4
25
8
20.9
31.1
______-
1
.
28
1
------- ---
5.5
.
-----_ __--
------------
--- - - -- ---
53.1
69.3
68.8
52.0
----_____
8.2
1
0
4.6
8
8.6
-
_____-_20_ __
____----------
------
.
12
2
.
10
9
8.6
a 20.3
.
.
deaths
Fiscal year:
1958------------ --------- .--------------------------------- _-------------- .___--______ 4,781
1959_______________________________________________________ 4,354
1960_________________________ 4,015
1062________________________________________________ _________________--__________- 3,889
1003_------------------------ ------------------------------------------------------------------ 44,264
,447
1964______.___. ------------- 4,362
1965_.
1965 estimate ---- _------- ----------------------------------- ..-------------------------- 4,400
Total, 0 years________________________________________________________________________________ 34,412
Total, 1961-65____----- _____------------------------------------------------------------------ 21,362
"HOT SPOT" DEATHS, FISCAL YEARS 1861-65
Only drowning deaths.
a Includes suicides, hostile action, and other accidental deaths.
Total in-service deaths, fiscal years 1958 _65, and "hot spot" deaths, fiscal years
Southeast Asia ____--------- ______________________--__-_---_______-____--_
Dominican Repnblic________________________________________________________
Panama___________________________________________________________________
Cuba_______________________________________________________________________
South Korea _____________________-_____----__-__-_--__-__--__-_-_--_________
Accident,
disease, etc.
 Approved For Release 2003/I 1 MlSCIAaDPWB00446'RD OflOOO549 ARMED FORCES
Approved For Release 2003/11/04: CIA-~ DP67B00
S-OPFM
a I ro
Za 2
aao7uo QS ~N M
9IIH]]UM
_
9-a I boo I
o-a NNnN I~
 Mr. EVERETT. We will now be, happy to hear from. our esteemed
colleague, Congressman Roberts.
STATEMENT OF HON. RAY ROBERTS, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF TEXAS
Mr. ROBERTS. Mr. Chairman and distinguished members of the
committee. It gives me great pleasure to appear before you today
to speak in favor of H.R. 10399. This bill is very similar to S. 2127
which has already passed the Senate.
This bill is designed to afford our servicemen in Vietnam. and. else-
where in Asia who fight and die for their country and for the cause
of freedom the peace of mind of knowing that their loved ones back
home will be provided some measure of security in. the event of their
death.
The bill provides that the $10,000 stall be reduced by the amount
of U.S. Government life insurance, national service life insurance, or
commercial life insurance held by the insured and. in force at the time
of his death.
The insured may designate the beneficiary from among the classes
named in subsection (a) of section 652, and may be to the surviving
spouse, children, parents, or brothers and sisters of the insured, the
payment shall be to the first eligible beneficiary among the classes
and in the order so given. The money shall be paid in a lump sum.
When requested, waiver of premium. will be granted on any policy
of national service life insurancce or U.S. Government life insurance
for periods during which such serviceman is in a combat zone and for
120 days thereafter. Any such waiver shall render the insurance
nonparticipating while the* waiver is in effect.
This proposed program is very similar to the program of service-
men's indemnity which was authorized in 1951 by Public Law 23,
82d Congress. There is an urgent need for more adequate insurance
protection for our soldiers serving in southesat Asia under conditions
of war.
The existing VA programs simply do not adequately serve the needs
of our servicemen, nor is the void being filled by private commercial
insurance companies. With the extension of the hostilities in Viet-
nam, more and more companies will not write insurance on a service-
man already in a combat zone or who is alerted to move to one, or
they will write such insurance only with a war exclusion clause.
Because of the many unknown. factors involved, any estimate of
the cost must be based on a number of assumptions. If we assume,
for example, that the U.S. Armed Forces in. combat zones are main-
tained at about 150,000, and that the mortality rate is 3 per 1,000,
this will result in an annual cost of $12 million (1,200 by $10,000).
This is, however, a most variable estimate.
I cannot state too strongly my own personal conviction as to the
justness and necessity of this legislation. The fighting in southeast
Asia is not going to cease tomorrow. The Communists daily make
known their plans for the eventual domination of that area-if not the
entire world.
Already more than 625 American boys have given their lives fighting
for the idea of self-government in South Vietnam. We must not fail
to demonstrate to all our belief that freedom shall be won.
53-412-G3-5
 Approved For Release\2003/11/04: CIA-RDP67B00446R000500210005-9',
2820 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
,?he passage of this bill will once again show our fighting mein that
the Nation has not forgotten them. We inust give them the knowl-
edge that in the event of their death, their families will be provided at
least this small measure of security.
I sincerely hope that upon close study this committee will give this
bill s, favorable report.
Mr. EvERE,rv. Thank you, Mr. Roberts for a fine statement in
sup ort of your bill H.R. 10399. The committee will be glad to have
the renefit of your remarks.
Mr. ROBERTS. Thank you, Mr. Chairman.
Mr. EVERETT. We will now be happy to hear from Congressman
Carter.
Would you mind filing your statement for the record and kind of
hitting the highlights of it? I don't want to rush you. If you can
tell us the highlights of your proposal we will certainly be happy to
hear you at this time.
STATEMENT OF RON. TIM LEE CARTER, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF KENTUCKY
Mr. CARTER. Thank you, Mr. Chairman and members of the
commi ,teo. I appreciate very much the opportunity you have given
me to appear before your committee this morning to testify in support
of my bill, II.R. 9725, to provide special indemnity insurance in the
amount of $10,000 for members of our Armed Forces serving in
combat zones.
My till would provide that any person on active duty with the
Armed Forces in a combat zone would be automatically insured by
the United States without cost to such person against death in the
principa'. amount of $10,000. It would also provide that any such
person would be insured if lie died as the direct result of an injury or
disease i.acuned while serving in a combat zone 2 years prior to his
death.
The irdomnity would be payable in 120 equal monthly install-
ments with interest at the rate of 2h14 percent per annum. This is the
same kind of indemnity insurance we provided servicemen of the
Korean conflict.
I introduced this measure specifically to provide protection to the
dependents of members of our Armed Forces engaged in operations
in Vietnam, in southeast Asia, and in the Dominican Republic.
These servicemen, and some servicewomen, have engaged in fighting,
defending our country against aggression which the Congress, has by
resolutions, declared necessary to our national security.
Relatively few in number, compared to our population or to the
total number of men in their age category, they are bearing the burden
for all of us, So, to them, we owe assurance of some protection to
their dependents, an assurance we have provided for those who fought
in other was.
Therefore, I feel that it is fitting and proper that we do as much
for the families of our present day fighting forces, and I urge the
committee to give speedy approval to this legislation.
Again, Mr. Chairman, let me thank you for the privilege accorded
me to testifi> before your committee this morning in support of my
bill. I appreciate very much your kindness and courtesy. I would
 Approved For Release rsru`f'1i1Q~em RNN 19684T4tikd dbii 16669-92821
like to leave my statement with the cleric to be made a part of the
hearings on this legislation.
Mr. EVERETT. Congressman Carter, what would you think about
having a group insurance policy the same as we have on the civil
service employees now for all Members of the armed services? Your
bill, as I understand it is just for the combat areas, is that right?
Mr. CARTER. Yes, sir, that is true.
Mr. EVERETT. What if it roan was killed jumping out of a para-
chute at Fort Campbell, or something like that? Would lie be covered
under your bill?
Mr. CARTER. No, sir, he would not but I think ho should be.
Mr. EVERETT. What about the man who is killed in it boat accident,
say going over to the combat zone, or going to a combat zone in an
airplane that explodes or something like that? Would he be covered
under your bill?
Mr. CARTER. Not under this but I think he should be. There is
a bill which has been introduced to that effect. In fact, I think the
Senate bill includes part of that, not all of it.
Mr. EVERETT. Doctor, we are certainly happy to have you. Mr.
Secrest, do you have any questions?
Mr. SEcREST. No questions.
Mr. EVERETT. Mr. Ellsworth?
Mr. ELLSWORTH. No, sir. I think it is outstanding for the doctor
to come up and make this excellent suggestion.
Mr. EVERETT. Mr. Fino, we will be glad to hear from you now.
STATEMENT OF HON. PAUL A. FINO, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF NZW YORK
Mr. FTNO. Thank you, Mr. Chairman, and my colleagues on the
Veterans' Affairs Committee.
Mr. EVERETT. I might say Mr. Fine is an outstanding member of
this committee. We are certainly happy to have you participate in
the hearings this morning.
Mr. FiNO. It is a pleasure to be on this side of the rostrum..
Mr. Chairman and my colleagues, I appreciate and welcome this
opportunity to testify hore this morning in support of m bill H.R.
4379, which provides free insurance protection for members of the
Armed Forces serving outside the United States.
I have long considered it unfair that servicemen no longer receive
$10,000 in free insurance. I have long felt that the nature of the
cold war has been such that we could not properly say that the con-
ditions of military service are peacetime.
For some time, the frequency of our "peacekeeping" missions
throughout the world and the constant threat to our troops stationed
overseas have made the lack of free insurance for our overseas service-
men quite unjustifiable.
Today, in the light of the situation in Vietnam, it is absurd to say
that we have not returned to wartime conditions. It is absurd to say
that we do not owe the men fighting in Vietnam the free insurance
we would give to wartime soldiers. As far as I am concerned, the
Vietnamese crisis has made this legislation a "must." I cannot
conceive of this committee denying our combat troops in Vietnam the
Approved For Re~~s~~ /' [1 &Ilc@ F?I UP 619~F1`0d 00005-9
 Approved For Release200J~32204r2 DGA+ROP6o'1BftQ446MO N2AW0, ED FORCES
I strongly urge my bill, II.R. 4379, be favorably reported at the
earliest possible date, so that our servicemen in Vietnam may have
the benefit of this insurance coverage. This bill provides, of course,
for insurace coverage for all servicemen overseas, not just those in
Vietnam, but obviously its primary purpose and effect would be to
make insurance available to those actually in the war zone in southeast
Asia.
Mr. EVERETT. Mr. Fine, it does not cover a training accident at
Fort Benning or Fort Campbell or Fort Hocd?
Mr. FIND. It only covers those servicemen that are outside the
country.
Mr. EVERETT. The continental United States?
Mr. FrNo. That is right.
Mr. EvERE^T, A plane carrying a group over to Vietnam which
crashed would be covered?
Mr. Fixo. Once it is outside the continental United States.
I urge my colleagues on this committee to report this bill favorably
with all speed, so that our servicemen in the war area will have not
only the moral3 boost of knowing that we on the home front care, but
so that they will also have the knowledge that this insurance exists
to aid their families just in case something happens. It seems a small
enough thing for its to do.
I just want to make mention at this point that in 1956I appointed
a young boy in my district to West Point. Ile was graduated in
1960. He was assigned all over the country and he was ixr Germany.
Last month lie was called in Vietnam. The family has nothing. They
spoke to me a)out this insurance. Of course, the loss of their son
was the most ti agic thing. Yet, they have nothing to sort of comfort
them in this moment of sorrow.
Mr. EVEnET?. Mr. Fine, does lie have a family?
Mr. Fixo. He wasn't married. Ile has a father, mother, and
younger sister, a 26-year-old boy.
So again, my thanks to this committee for allowing me', this oppor-
tunity to be heard on this bill.
Mr. EVERET'i. Thank you. We are certainly happy to have you,
Mr. Fino.
Mr. Secrest?
Mr. SECREST. I want to say there has been no more valuable mem-
ber of this committee and no one who on all veterans' legislation has
been more ardent in support of veterans than Congressman Fine.
Mr. EVERETT. Mr. Ellsworth?
Mr. ELrswonTi. That is right. Of course, everybody knows that
Congressman Finn is one of the most forthright, effective, and per-
suasive Members of this body.
You would net have any great objection, would you, to' expanding
and extending the coverage of your bill so that it would cover, for
example, perhal:s, let us say, a group of soldiers that takes off on a
nonstop flight u, one of these transcontinental jets from Fort Riley,
Kans., bound fir the war zone and just before they get out of the
continental limits they have some kind of horrible accident?
Under your bill I understand they would not be covered should they
be killed.
Mr. FIND. T. would say under the technical an s`ict construction
Approved For Release, 20b*t11*4vj OI A~R DPS-IB0044~ROAQ5Q 0q think: a liberal
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2823
construction would indicate that they are in service on their way to
Vietnam and they should be covered. I would support such an
amendment.
Mr. ELLSwonrTI. You would support the committee making that
clear?
Mr. FIND. I certainly would.
Mr. SECREST. This committee has given considerable thought and
study, but has arrived at no definite conclusion, to providing some sort
of insurance that would cover everyone in the armed services today.
We are thinking in forms possibly of covering those in. combat zones
with a strict Government indemnity of $10,000 or whatever figure,
and the others with something similar to the civil service insurance
where the serviceman, himself (night contribute part and the Govern-
ment part, but everyone, would he included.
There are,' of course, people going to Vietnam and coining back
all the time. There are people who have stayed over there 2 years
and come back and be killed the first day in an automobile accident
down the road. So these are things we are thinking of in terms of
getting a general bill to cover everyone. No matter where they are,
they are still covered.
Mr. FIND. I see.
Mr. EVERETT. Thank you, Mr. Fino. We will now hear front Con-
gressman Daniels. Mr. banieis, go right ahead.
STATEMENT OF HON. DOMINICK V. DANIELS, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. DANIELS. Mr. Chairman, I. am very happy that you have
invited me to come before you to speak in support of my bill, H.R.
6161, which would. provide. free insurance protection for members of
the Armed Forces serving outside of the United States, and in addi-
tion would provide wartime rates of compensation for veterans
disabled as a result of injury or disease incurred as a result of overseas
service.
When I introduced this bill, H.R. 6161, on March 11, 1965, 1 had
given much thought to the possibility of greater U.S. involvement in
the Vietnamese crisis. Since that time, what was then a possibility
has now occurred. Americans have taken their place alongside our
South Vietnamese allies. No longer is our rol.e merely that of advisers
to the South Vietnamese Army.
Mr. Chairman, I commend you and the members of this great com-
mittee for your promptness and dispatch in taking action to protect
our fighting men and their families from what we know too well to
be the inevitable result of armed conflict. In all military actions,
there are casualties, and it is up to the Congress to carry out the
policy described by Abraham Lincoln in his second inaugural address
who said that the U.S. Government has an obligation to care for
"him who shall have borne the battle and for his widow and children."
This committee has always done its duty for the veterans of all
wars and I know that you shall continue your struggle to aid the
cause of the veteran,
Mr. Chairman, in conclusion, I have seen pictures of the "new
breed" in South Vietnam and those young men, some very young,
are carrying on the traditions of Bunker Hill, Gettysburg, San Juan
Hill, Vimy Ridge, Guadalcanal and Heartbreak Ridge.
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2824 INDEMNITY OR INSURANCE FOR TIIE ARMfl FORCES
When General MacArthur addressed the joint session of the Con-
gress n 1901, he said, "I have just left your fighting sons in Korea
and Iican bell you that they are splendid in every way."
Now, Mr, Chairman, we have it now generation of young Americans
and they too are splendid in every way. It is up to us m the Congress
to insure tham that they can go forward to battle with the forces of
international communism safe in the knowledge that their loved ones
will receive at least a minimum of financial security atnd. that if dis-
abled they will receive something more than peacetime compensation
for their wotnds or illness. Mr. Chairman, we owe these fine young
Americans at least this much.
Mr. EVERiTT, Thank you, 1/fr. Daniels. Are there any other
Members of Congress in the audience? Now we will hear from
Mr. Rood, representing the American Life Convention, and the Life
Insurance Association of America and Life Insurers Conference.
Mr. Rood, we are sorry Mr. Adair could not be here today. I
think he has explained to you the reason for his being absent from
the meeting today, has lie not?
STATEMENT OF HENRY F. ROOD ON BEHALF OF THE AMERICAN
LIFE CONVENTION, THE LIFE INSURANCE ASSOCIATION OF
AMERICA, AND THE LIFE INSURERS CONFERENCE; ACCOM-
PANIED BY EDWARD A. LEW, ACTUARY AND STATISTICIAN,
METROPOLITAN LIFE INSURANCE CO., NEW YORK CITY
Mr. RooD. Yes, he has.
Mr. EVERET'r. Mr. Rood, we want to move ahead. We are not
trying to rush you but if you would just file your statement and kind
of hit the highlights of it we would appreciate it.
Mr. Roon. hrst, lot me say, Mr. Ed Lew, of the Metropolitan
Life Insurance Co., is with me. We are speaking on behalf of the
three associations, the Life Insurance Conference, the Life Insurance
Association of America, and the American Life Convention which
represent about 94 percent of the life insurance in force in the United
States.
We very much appreciate this opportunity to appear before you.
Your committee has (lone an outstanding job in handling these
benefits and I want to compliment you on your statesmanship, par-
ticularly in the handling of Public Law 881, which as you know,
provides very substantial benefits to the survivors of servicemen.
We received some figures which indicate that Public Law 881,
the average commuted value at death, taking into account, interest,
mortality, and remarriage factors- is in excess of $24,000,including
those who do noi, leave any qualified survivors, For most enlisted
men, this is a value running from $20,000 to $30,000, and for widows
of officers, it runs as high as $73,000.
Looking at this a different way, if we take a widow, ago 25, of a
sergeant, with two children, aged I and 3, who lives out her expectation
,of life, this is without any commutation factors, we find that the
Veterans' Administration under current legislation would pity her an
amount of about $100,000 and this would be augmented by social
security of perhaptr $58,000, making a total of about $158,000. We
think this is a very substantial benefit and certainly far more than the
average civilian in a pity class similar to a sergeant would carry.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 0 Y F FOR THE ARMED FORCES 2825
Approved For Release 200T/~i EA-~)6$17M68446R000500210005-9
One of the questions that is currently being raised because of the
international situation are whether a serviceman can secure life in-
surance from a private company.
Mr. EVERETT. What is the situation today, Mr. Rood?
Mr. Roon. The situation is this: we have surveyed the member
companies of our organization and about 10 percent of them indicate
they would still issue life insurance to people who have been alerted to
combat duty.
Mr. EvERETT. In an excessive amount or normal amount?
Mr. RooD. In normal amounts. One c.impany said they would go
up to $40,000 on officers and $10,000 on enlisted men. But there is
insurance available. Some of these are the very largo companies.
Three of the four largest companies will continue to insure servicemen
who are alerted. Every company we know of will insure servicemen
not alerted for combat duty and that insurance would stay in force
even though they are sent to Vietnam.
So, in general, a man who is in service can buy insurance if he has
not been alerted. To issue insurance for a man alerted for duty in
Vietnam is a little bit like issuing insurance to a man on his way to the
hospital. I think you understand the reasons why many of the com-
panies feel they cannot do this. It would not be fair to their other
policyholders to underwrite a substantial amount of that risk.
Another question which has been raised is the point that the last
speaker mentioned, namely, some of the parents do not receive benefits
because of the dependency test.
The second point is that perhaps the beneficiary qualifications are
too restricted in that there may be dependent brothers or sisters who
do not receive benefits under Public Law 881.
Looking at the presently pending bills, we feel that there are several
points which should be considered. We think that any now program
should meet the needs of the servicemen and their survivors. It
should provide equitable treatment for all servicemen and provide
a stable and permanent solution.
We believe that the group plan proposed under II.R. 10873 meets
these tests, whereas the gratuitous indemnity approach of S. 2127
does not.
In our opinion a gratuitous indemnity program is objectionable for
several reasons: First, although it does provide protection for those
who may find it difficult to obtain private insurance because of combat
duty, it is inflexible and unrelated to the needs of the survivors.
Second, it draws a sharp distinction between those in a combat zone
and those not. Such a distinction is unfair.
Third, such a program is not permanent in nature. It comes into
operation only whenever it is concluded that we are in combat.
Finally, as already evidenced by S. 2127, such a program seems
inevitably to load to conversion to Government insurance upon
separation even though the serviceman is in good health and can
readily obtain private insurance. Such a result, we believe, is wholly
unjustified.
It appeared from the questions you raised with the previous witness
that you are concerned with the question of the roan who is killed in
this country. I think the statistics of the Defense Department
indd~ii'~c~1a~tneL that there have been about 500 servicemen killed in aviation W A.
For Release"~1`003il l/T' h bpi -RDP67B00446R0015 0y500210 05t9 ink those men
 Approved For Release8Z&031/' ' /bWN fA [fog~bW#6ft6d~6 bE'=Vcr;s
should be protected just as much as the 400 men who have been
killed to date this y3ar in Vietnam. We think the relative numbers
are nearly the same.
The group insurance approach, on the other hand, meets the above-
mentioned tests. First, it would satisfy the needs of servicemen who
may have difficulty t obtaining private insurance because of combat
assignment and provide flexibility as to amount of coverage.
Also, it would make available benefits to parents who are classed
as: dependents under Public Law 881 and permit servicemen to desig-
nate beneficiaries nct eligible under that act, such as brothers and
sisters.
Second, it would provide equitable treatment for all servicemen,
with insurance available to all but with the Government paying the
cost of extra hazards of active duty in the uniformed service.
Third, it would be a permanent program applicable regardless of the
existence or absence of combat situations.
Finally, we might point out that this group plan would make
available to members of the uniformed services insurance benefits
comparable to those which have long been available to Federal
civilian employees ae well as to employees of other large employers.
We want to assure the committee that, in our opinion, a plan of this
type would be workable. Although we have not surveyed ourmom-
bership with respect to participation, a number of companies have
already informed as they would be willing to cooperate in such a
program..
I might say it is it sufficient number so that we could take care of
the coverage. It semis reasonable to expect that the participation
here would be somewhat in the order of that under FEGLI where
some 270 life insurance companies have it share in the program.
Before closing, I would like to mention several matters which are
rather technical in nature. In general, we think H.R. 10873 is very
well drafted and would require little change. There are three points,
however, which we ccnsider important for your consideration.
First, the new section 766(c) is open to the construction that any
life; insurance compar_y may elect be to a reinsurer. It would' seem
th>t in the interest o:' sound operation and administrative feasibility
tho' statute should provide for the establishment of some reasonable
standards for qualification and extent of participation.
Second, the new suction 768 provides that upon separation! from
active duty the serv_ceinan may replace his group insurance: with
private insurance obtained, without medical examination from an)' one
of the companies participating in the program. This conversion
feature might be expanded to include other companies electing to
register for that purpose.
Mr. EVERETT. What do you mean by that? In other words, a
nian who has this policy and the policy is with a certain company, can
elect any company he wants to convert this policy to?
Mi. Room. The companies that will probably sign up to cover the
group insurance we expect will he the companies that specialise in
group insurance. There are, some very good companies that do not
write group insurance. They might want to take it part of this
conversion program. We think if they want to, they should be
perrhitted to do so.
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR TEIE ARMED FORCES 2827
Mr. EVERETT. That would leave it up to the individual. In other
words, if he has a policy with it certain company and if ho wanted to
get it policy, say with National Life in Tennessee, or Life of Georgia
in Georgia, he could convert to that company.
Mr. ROOD. That is right. Even though the company did not par-
ticipate in the group program, he could convert to that company if
it chose to grant such it prlvileuo.
Third, the provisions of the ill as to payment of premiums under
the group policy need careful examination. The new section 769
dealing with contributions traceable to extra hazards should be
integrated easefully with those of section 771.
Furthermore, section 769 should clearly spell out that monthly
contributions thereunder with respect to extra hazards are determined
as approximations and are subject to retroactive adjustment upon
the periodic examination of excess mortality.
We think some of the smaller companies that want to get in the
plan aught not want to wait until the end of the year for adjustments
to the extra amount which the Government might want to pay for
service-connected death. We think it should be clarified so that
there is no question that this will be handled monthly for the benefit
of those smaller companies.
Thank you for this opportunity to express our views. The staffs of
the associations, as well as the personnel of member companies, will
be pleased to give this committee and its staff any additional infor-
mation or assistance you may desire.
Mr. EVERETT. Thank you. That is a fine statement.
One question I want to ask you. Just using the figure of $10,000,
costing $2.50 a month, if we should see fit to raise that to $20,000,
would it be $5 or would it be $4 or in proportion would the premium
be doubled, or would the rate be cheaper on $20,000 per thousand
dollars?
Mr. ROOD. No, sir. That rate contemplates a very small margin
for expenses and it would be my opinion that it would be proportional.
It would be double if you doubled the amount.
I might say in connection with the amount of insurance that an
obvious question which I am sure has arisen in your committee would
be the question whether if $10,000 was the right amount in World
Wars I and II, it should not be greater today in view of the inflationary
increases in the cost of living.
You will remember that in World War I there was no other coverage
except the Government insurance. In World War 11, generally,
there were not other benefits except that social security was available
for those who had adequate coverage. Today with Public Law S81
and with the social security benefits payable to all servicemen's
dependents, I think you have a very different situation. You have
very substantial amounts of coverage provided that were not available
in the last two World War situations.
Mr. EVERETT. Does your experience in group policies indicate that
if we should make the maximum $20,000 rather than $10,000, that the
serviceman would tend to drop it and not take any? What do you
think about that? What has been your experience in the group
policies you have written in the past?
Mr. Roon. In normal group insurance the amounts of insurance
are usually graded to the income of the individual. So that a man in
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2828 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
a higher salary bracket would get $20,000, a man in a lower salary
bracket might get $2,000 or $3,000. Since they are related to income,
the chpnces of conversion are about the same for the larger amounts
as smaller amounts. They might be greater because the men in the
large income brackets coald better afford to convert.
I should think if you had $20,000 for all, some men in the lower
grades would not bp able to afford that large amount.
Mr! EVFRETT. Of sou _se, I realize under the bill we have introduced
in this committee, that I, as chairman of the subcommittee, have
introduced, makes it mandatory to put it in writing if they an not
want insurance.
Do you think a lot of servicemen would back out and sign up that
they did not want insure nee if you had the $20,000 rather than $10,000?
Mr. RooD. If they thought they had to take $20,000 or nothing,
I think many of them would. But given the opportunity to take a
lower amount, I think navy would take $10,000 rather than $20,000.
Some men who were orphans and had no dependents would not take
any insurance because they would feel they had no need for it.
Mr. +'VFanTT. Thark you, sir. We appreciate your being with us.
Mr. Secrest.
Mr. SECREST. No q'iestions.
Mr. EVERETT. Mr. Ellsworth?
Mr. ELLSWORTR. I want to say, Mr. Rood, how much we appreciate
your management and leadership and that of the organizations you
represent in coining up and testifying as you have before the com-
mittee this morning.
I think, Mr. Chairman, the organizations he speaks for have made
an: outstanding contribution to this problem which we have before us.
Mr. EVERETT. I want to concur in what you have said. As you
know, at the meetinf;s we have had all along the line in the past 5 or
6 weeks they have b aen most cooperative and helpful.
Mr. SaCREST. I would like to ask one question. If under agroup
policy you insure 2 million at $10,000 each, is the rate cheaper than
if you insured I million at $10,000?
LVlr. Roon. No, sir, the rate would be the same.
Mr. SECREST. No matter how many is in the group, the rate is the
same?
Mr. ROOD. In ncrmal practice we require a certain percentage to
be covered in order to avoid selection. I would say in a group of this
size the rate would be the same and we would not be concerned, about
the percentage that was covered.
Mr. Ev.FREnT. Thank you, Mr. Rood. We certainly appreciate
again the work you have done on this matter for us.
Mr. Roof). Thaik you, sir.
(Statement refoired to follows:)
STATEMENT ON 1I.R, 10873, S. 2127, AND RELATED PILLS BY AMERICAN LIFE
CONVENTION, LIFE INSURANCE AssoCIATmN OF AMERICA, AND LIFE .INSUIIb11S
CONFERENCE, PEE3ENTED BY HENRY F. ROOD
My name is Henry F. Rood. I ain president of the Lincoln National Life
Insurance Co., Fort Wayne, Ind. I appear today on behalf of the American Life
Convention, the Life Insurance Association of America, and the Life Insurers
Conference, three associations with an aggregate membership of 380 life insurance
companies which have in force over 94 percent of the legal reserve life insurance,
3ne1uding 95 percent of the group life insurance, written in the United States.
 Approved For Rele314~bdN~}4P~4~0$~f0058~9
Appearing with me is Mr. Edward A. Low, actuary and statistician of the Metro-
politan Life Insurance Co., Now York City.
We appreciate this opportunity to express our views on II. R. 10873 and S.
Con ve proposals. We understand the concern of the
2127, and related legislati
p
gress for the security children, parents, and other deendents of
e,4 wives, timely for
servicemen who die in the service e,4 their country. Wo agree that it is
Congress to review what may be necessary for this purpose. We have studied the
proposed group insurance mechanism provided in Ii. R. 10873, 'and believe it
represents an appropriate and workable approach. On the other hand, we, think
that the proposal for gratuitous indemnity in 8. 2127 is neither appropriate or
desirable.
HISTORY OF MILITARY SURVIVOR BENEFITS PROGRAMS
Since 1917 the Federal Government has made some provision for the protec-
tion and security of the survivors of servicemen. We need riot review with this
committee the details of U.S. Government life insurance, national service life
insurance, the gratuitous indemnity approach of 1951, or the dependency and
indemnity compensation benefits provided since 1957 under Public Law 881. As
you well know, however, Public Law 881 was developed after long and careful
study, and in our opinion it was well directed toward the basic problem. In
essence, that statute merged the previously existing programs of dependency
compensation. and gratuitous indemnity, emphasizing dependency compensation
related to need. Also, that statute provides rather substantial benefits. A recent
study indicates that under Public Law 881 the average commuted value at death
(taking into account interest, mortality, and remarriage) is $24,064, including
those who do not leave qualified survivors. For the widows of most enlisted
men, the commuted values are of the magnitude, of $20,000 to $30,000, and for
widows of officers they range as high as $73,000. These figures do not include
substantial allowances payable under the social security system, which in some
cases may have the effect of doubling the figures above.
QUESTIONS CURRENTLY BEING RAISED
As a result of recent international developments, however, several questions
are currently being raised concerning the adequacy of available military survivor
benefits. A related question frequently asked is the extent to which private life
insurance is available to members of the uniformed services. I would like to
outline the situation in that regard before going on to a discussion of the pending
bills.
Members of the uniformed services not assigned to combat areas can today
readily obtain insurance without it war exclusion clause from private life insur-
ance companies. This coverage will continue in force after the individual moves
to a combat zone. Recently, however, because of the conditions in Vietnam, a
majority of the life, insurance companies have concluded that they will no longer
write insurance on a serviceman already in a combat zone or alerted to move to
one, or will write such insurance only with a war exclusion clause.
We assume that the reasons for it company to discontinue writing are. fully
understood. The hazards confronting some military personnel are very great
but difficult to measure, so that appropriate extra premiums cannot be deter-
mined. It may be, unfair to other policyholders to assume such very great risks
at regular premiums. The seriousness of this problem will of course vary with
the size of the company and the number of combat risks applying for insurance.
It is clear, however, that there are sound and equitable reasons for it decision to
decline applications of personnel already committed to a combat zone or to
include a war clause in such instances.
It is notable, however, that the practices of the companies are not uniform.
The best information we have, based on a recent survey of our member com-
panies, indicates that about 10 percent of them, including some of the largest, are
still writing life insurance policies without it war exclusion clause on servicemen
alerted for combat duty.
Questions are also presently being raised concerning the adequacy of the benefit
structure of Public Law 881. One point sometimes mentioned is that under
the eligibility tests of that act some parents receive, no benefits whatever because
they are classed as nondependent. A second point is that the present classes
of beneficiaries under that net may be, too restricted, with the result that a number
of servicemen die without any benefits flowing to individuals who may reasonably
have looked to them for assistance-for example, minor brothers and sisters.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/1' 4W CfAiW ob41$ R000Soan00e9UtMED FORCES
THE PENDING BILLS
If Cmngrc ss decides to provide some additional protection for servicemen-
whether because of concerti about the availability of private life insurance to
those in a combat zone or because of questions about the adequacy of the present
benefit structure we would urge that certain principles by recognized. Any
such new program should meet the needs of the servicemen and their survivors,
provide equitable treatment for all servicemen, and provide a stable and permanent
solution. We believe that the group insurance plan of hLR. 10873 meets these
tests, whereas the gratuitous indemnity approach of S. 2127 does not.
In our opinion the gratuitous indemnity program is objectionable for several
reasons. First, although it does provide protection for those who may find it
difficult to obtain private insurance because of combat duty, it is inflexible and
unrelated to the needs of survivors. Second, it draws a sharp distinction between
those in a combat zone and those not. Such a distinction iss unfair. Third.,
such a program is not permanent in nature, but comes into operation whenever
it is concluded that we are in combat. Finally, as already evidenced by S. 2127,
such a program seems inevitably to load to conversion to Government insurance
upon separation, even though the serviceman is in good health and can readily
obtain private insurance. Such a result is, we believe, wholly unjustified.
The grout insurance approach, on the other hand, meets the above-mentioned
tests. First it would satisfy the needs of servicemen who may have difficulty
in obtaining private insurance because of combat assignment, and provide flexi-
bility as to amounts of coverage. Also, it would make available benefits to
parents who are classed as nondependent under Public Law 881, and permit
servicemen ti designate beneficiaries not eligible under that act, such as brothers
and sisters. Second, it would provide equitable treatment for all servicemen,
with. insuranuc available to all, but with the Government paying the costs of the
extra hazards of active duty in the uniformed services. Third, it would be a
permanent program, applicable regardless of the existence or absence of combat
situations. Finally, we might point out that this group plan would make available
to members of the uniformed services insurance benefits comparable to those
which have long been available to Federal civilian employees, as well as to
employees of large employers.
We want ;o assure the committee that in our opinion a group plan of this
type would t e workable. Although we have not surveyed our membership with
respect to participation, a number of companies have already informed us that
they would be willing to cooperate in such a program. It seems reasonable to
ex~ect that the participation here would be somewhat in the order of that under
F]LGLI, where some 270 life insurance companies have a share in the program.
Before doling, I would like to mention several matters which are rather tech-
nical in natu?o. In general, we think that II.R. 10873 is very well drafted and
would require little change. There are three points, however, ,which we consider
important for your consideration.
First, the r:ew section 766(c) is open to the construction that any life insurance
company may elect to be a roinsurer. It would seem that to the interests of
sound operat:on and administrative feasibility the statute should provide for the
establishmen of some reasonable standards for qualification and extent of
participation.
Second, new section 768 provides that upon separation from active duty the
serviceman rray replace his group insurance with private insurance obtained
without medical examination from anyone of the companies participating in the
program. Tais conversion feature might lie expanded to include other companies
electing to resister for that purpose.
Third, the provisions of the bill as to payment of premiums tinder the group
policy need careful examination. The new section 769 dealing with contributions
traceable to extra hazards should be integrated carefully with those of section 771.
Furthermore, section 769 should clearly spell out that monthly contributions
thereunder with respect to extra hazards are determined as %p proximations and
are subject t) retroactive adjustment upon the periodic examination of excess
mortality.
Thank you for this opportunity to express our views. The staffs of the asso-
ciations, as cell as the personnel of member companies, will be pleased to give
this committee and its staff any additional information or assistance you may
desire.
 Approved For ReleaW? f1Y1 l ztW P69bU4696MI N605&31,
Mr. EVERETT. Mr. Hansen is in the audience. Come forward
Mr. Hansen, we will be happy to hear from you.
As I have said, Mr. Hansen, we are not trying to cut you off in
time but if you have a statement we will be happy to have you file
it and hit the highlights of your statement in order to conserve time.
Every time you read a paper you do not know whether we will be
here until Halloween or Columbus Day or whether we will be here
until Thanksgiving. So we do want to move ahead on this matter.
Mr. HANSEN. I will treat this matter with dispatch because I
am in just as big a hurry as you are.
Mr. EVEnETT. Thank you, sir.
STATEMENT OF HON. JOHN R. HANSEN, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF IOWA
Mr. HANSEN. I want to thank you for the privilege of appearing
before your committee on this matter this morning.
First, I want to ask your permission to have made as a part of the
record a statement which I mailed to the chairman of the full commit-
tee, the Honorable Olin Teague, which in the main encompassed a
typical message from it constituent outlining a family problem.
Mr. EVEnETT. Without objection, that will be made a part of the
record at this point.
(Document referred to follows:)
HOUSE OF IIEPEESENTATIVES,
Washington, D.C., August 30, 1965.
Hon. OLIN E. TEAGUE
Chairman, Veterans' Affairs Committee,
Cannon House Office Building, Washington, D.C.
DEAR CHAIRMAN TEAGUE: In accordance with your request that I send over to
your committee a statement on H.R. 10630, which deals wiuhaspecial indemnity
for the survivors of servicemen who are killed or die as a result of injuries suffered
in a combat some, I am sending the enclosed statement.
If this is not to be considered by your full committee in its hearings this week,
I hope you will refer it to the proper subcommittee for consideration.
Thank you very much for your assistance.
Sincerely,
JOAN R. HANSEN,
Member of Congress.
STATEMENT OF LION. JOHN It. HANSEN, A REPRESENTATIVE IN CONGRESS FROM
THE STATE OF IOWA
I appreciate very much the willingness of Chairman Teague to permit me to
testify on H.R. 10630. I introduced this measure which provides for special
indemnity insurance for the survivors of servicemen who are killed or who die
as a result of injuries suffered in a combat zone.
While I am aware that the whole matter of insurance coverage was given.
a long study by the committee and it was concluded that a compensation program
would be more feasible than an insurance program, I still fool that proper
consideration should be given to the peculiar problem that our young men in
combat now face.
I have been informed that some companies have included a military service
exclusion in their policies and according to the office of the Iowa insurance
commissioner, the number who are planning to add such an exclusion is growing
at an increasing rate. What this means in an individual situation is well
demonstrated in the attached letter from a friend of mine who has outlined what
it means to his son.
It is apparent that our growing involvement in. world affairs is going to include
more frequent requests for assistance to nations that are threatened by a
ommunist takeover.
Approved For~2elease 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/41M : 8jAE gb7ENU44jMWdt( UZ1bbd5A?MED FORCES
If our servicemen are to serve at their peak performance, they cannot be
hampered with a nagging concern for their families' financial security in case of
their death. I feel that with the hazardous duties given these men and the fact
that some insurance companies have an exclusion clause in their policies, it is
imperative that we should do everything possible to remove a heavy mental
strain now bong imposed on these men,
At the presant time Nye are moving toward the commitment of 100,000 troops
in Vietnam. These men are being called upon to place their lives on the line in
the fight for Ireedom. I do not think it is too much to ask us to assure these
men. that in the event of their death, the families which they leave behind will at
least be provided with a small amount of security.
It may be t nit the members of this committee will find a bettor solution to this
problem than my bill proposes, such as requiring insurance companies to remove
their exclusion clause from their policies. Whatever is done, I am deeply con-
cerned that these young men will not be further penalized because they are giving
a period of their lives to the service of their country.
lion. JOHN R. IIANSEN,
Member of Congress,
Longworlh Budding,
Washington, D.C.
DEAn CON(RESSMAN IIANSEN: We are concerned about the life insurance of
our only child a son, age 20, Kenneth U. Glass 11, who is now a member of the
U.S. Marine (corps.
I have beer. advised by the Marine Corps enlistment officer that servicemen
no longer have the opportunity to buy coverage which I believe was at one time
known as G;. insurance.
Our son is remarried, and at this stage in life lie is nearing that transition
period when a, a child lie soon will cease to boa dependent-the tables are turning
with the parents becoming closer to being the dependents of the new adult.
For the rcc(rd we want you to know that we sincerely appreciate the interest
you have shown as a Member of Congress in this matter. This shows us that
you have the 'icon interest of all the people at heart, as you sock ways to obtain
passage of tort eetive legislation designed to servo the best interest of our citizenry
and our Government.
Last night, f, closely reviewed our son's life insurance policies to determine the
exclusions which now apply because of his enlistment in the Marines. I am
hopeful that tic following facts will be of value to the committee taking a now
look at the matter of insurance for members of the Armed Forces. My findings
are:
1. A $10,00) policy written by the American Casualty Co., of Reading, Pa.,
states, "coverage is excluded by war or act of war, or accident while the insured
person is in the military, naval or air service."
2. A $10,000 policy written by the American Health & Life Insurance Co., of
Baltimore, Md. They term their policy the "Ammerican College Plan," which is a
term policy co tvertible to a whole life policy (after 5 years). This policy carries
a brochure ststing "the insured has armed services protection since no GI in-
surance is available." The catch is this. The term policy is subject to cancolla-
tion, and the3 require the completion of an annual questionnaire. Since the
policy is up to renewal on September 6, and the fact has been reported that the
insured is a mcnher of the Marine Corps, I question if the renewal will bo accepted.
3. A $500 policy taken as an infant with the Prudential Insurance Co. of
America, carries an exclusion while the insured is a member of the military, naval,
or air forces of any country at war, declared or undeclared.
4. A $1,000 policy with the rrudontial Insurance Co. of America, is a 20-year
pay life policy (now paid up) and it apparently contains no war risk exclusion.
This policy was taken out in 1947, shortly after the close of World War II.
Congressman Hansen, it is easy to see that our insurance coverage is shrinking
because of our son's interest in serving and defending our country.
And while we all recognize that no amount of insurance is ever sufficient to
compensate fm the loss of life under any circumstances we believe that parents
and/or future dependents are entitled to have coverage for one serving the Armed
Forces, either it home or abroad.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Releae OO31TT/O$:' MIBoO' $ fff bb5-;833
Your cooperation and assistance in pressing for legislation which will provide
insurance coverage of American sons and daughters serving our country is appre-
ciated, not only by us, but by tens of thousands of moms, dads, and wives of
service.ersonnel.
Jlncerely, KENNETH E. GLASS,
West Des Moines, Iowa.
Mr. IIANSEN. Following that, I would like to ask permission to
revise and extend my remarks that are being rondo this morning.
(Which, in essence, adds to what the letter from the constituent
covers.)
Mr. EVERETT. Without objection, it is so ordered.
Mr. HANSEN. A friend of mine who is in the laisurance Department
in the State of Iowa has outlined for me a trend which is taking place
on an over-increasing tempo. Insurance companies are filing or attach-
ing a combat rider to the existing policies which they have with their
insureds.
This points up my reason for having an interest in the Senate-
passed bill No. 2127 and a comparable bill which I introduced several
weeks ago, II.R. 10630.
Mr. EvERETT. What are the provisions of your bill?
Mr. HANSEN. This bill is merely an indemnity provision which does
not call for any insurance contract at all. It is it direct indemnity
payment in the event of death through combat, in combat, or within
2 years following combat as a result of injuries received in combat.
Mr. EVERETT. As it service-connected case.
Mr. HANSEN. That is right.
Mr. EvERETT. What about a training accident in Fort Riley or
Fort Leavenworth or Fort Benning?
Mr. HANSEN. That is not provided for in this measure.
Mr. EVERETT. Have you had a chance to look over the bill that the
committee has introduced?
Mr. HANSEN. No, I have not. Basically, what this measure is
intended to do is to take up where life insurance, old line life insurance,
regular contract policies, leave oft. A fellow who is in Fort Bruning,
for instance, is not in the combat zone. So the rider that is applied
to his policy, as I understand the riders that are being written, would
not be applicable.
So there would be no need for the indemnity insurance or payment
to be made in a case of that kind on the part of the U.S. Government.
That will conclude my statement.
(Statement referred to follows:)
STATEMENT OF IION. JOHN R. IIANSEN, A REPRESENTATIVE IN CoNCRESS FROM
THE STATE OF IOWA
Mr. IHANsEN. Chairman Everett and members of the subcommittee, I am
pleased to have this opportunity to present my views and testify on behalf of
11.11. 10630, which I introduced, and similar bills concerning servicemen's insurance
coverage.
I have previously sent it statement to Congressman Teague regarding my views
in this matter. Today I wish to emphasize some of the points made in my com-
munication and to bring now testimony to your attention.
While I am aware that the, whole matter of insurance coverage was given a long
study by the committee and it was concluded that a compensation program would
be more feasible than an insurance program, I still feel that proper consideration
should be given to the peculiar problem that our young men in combat now face.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003ft44 :1SM RiDP6IBQD4A> 005Mt ?T ED FORCES
This bill would provide special, cost-free, indemnity life insurance for members
of the Armed D orgies serving in areas designated as combat zones by the President.
Our growing involvement in world affairs, and especially in southeast Asia at
the present time, is requiring a parallel growth and commitment of U.S. service-
men. If these servicemen are to serve their country at their best, we must insure
them peace of mind regarding the financial security of their family in the event
of death, One of the basic ingredients of financial security is the vehicle of
insurance. I em sure if we were to examine the portfoli s of servicemen who
have planned fir their survivors financial security we would find the main basis
to be life insurance. The vehicle of life insurance readily allows a person to
create an estate of considerable size prior to his actually accumulating this estate.
It allows a per Ion to plan for life but also gives his survivors protection should
I he not live to earn this estate.
With the buildup in Vietnam, insurance companies have been reviewing their
war and military exclusion clauses. The serviceman bound for Vietnam or with
imminent assignment to that area finds it extremely difficult to rocnre insurance
against hazards that he will face there. It is understandable that the companies
do not care to underwrite the uncertainty that our young Americans will face
in southeast Asia.
It is even mo,c understandable that they are declining to underwrite the higher
mortality exper enee of a Marine serving in Chu Lai than that mortality experience
of the stateside civilian.
The effect of the war and military clause is well demonstrated in the letter I
received from a friend of mine regarding his son's insurance. I am also submitting
with this testimony a copy of a letter from Mr. David I). MacDonald, A.S.A.,
actuary of the insurance Department of Iowa. His letter reflects an increasing
trend for insurance companies to attach the war risk rider to their existing con-
tracts.
Basically, as f see this situation, our commitment and involvement in Vietnam
particularly has necessarily resulted in an increase in American servicemen serving
in that area. 'Their transfer and imminent transfer to these areas are precluding
them from planning and obtaining a very basic and important means of planning
for their survivor's security. I believe H.R. 10630 will adequately insure this
important Ricans to the serviceman and merely picks up where the private
segment of insurance leaves off.
INSU11ANCE DEPARTMENT Or IOWA,
Re military and War risk exclusion clauses. Des Moines, Septaenber 2, 1965.
Hon. JOHN it 3ANSEN,
Representative, Seventh District of Iowa,
Longworth Building, Washington, D.C.
DEAR Conan98SMAN IIANSEN: Ken Glass has contacted me regarding your
interest in the current activities of life insurance companies in connection with
military and war risk exclusion clauses. He indicated that you would appreciate
information per,aining to the domestic and foreign companies licensed to do
business in Iowa.
As of August 31, 1965, the following is a breakdown on companies licensed in
Iowa, and those having approved military and war risk exclusion clauses:
Domestlc------------- _
______________________________________
-------------------------------------
Total__..___.-_________________________
Numhor
having
clause
5
87
Percent
having
claw;o
18.5
32.8
31.5
To relate morn current experience, 34 companies have had elduses approved
since January 1, 1963. Presently three companies have filed clauses which are
awaiting review or approval. It should be noted, however, that, a majority of
the clauses filed since January 1, 1963, are revisions of previously approved
forms. These revisions are primarily in the area of a redefinition of home area
Approved For Release; 2001 M'A tl'EWftt1o 16DUtd021cod0'9 States, and to collect
 INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2835
the fact that the industry is presently operating under a new mortality table;
namely, the 1958 C80 mortality table.
It is also interesting to note that companies filing clauses do not intend to
currently use them; rather, it is their desire to have them on file fn the event
that future world conditions warrant their use,
As you may know, a military and war risk exclusion clause generally provides
that if death occurs as a result of the hazards of war and the military (as defined
in the clause), then the benefit payable is equal to the greater of the premiums
paid or the reserve of the policy. (For informational purposes, I am enclosing
a copy of an exclusion clause Clod by one particular company. It should be
noted that the form is that of out, company and is not indicative of the format
and language used by all companies who have. If clause on life.)
While complete exclusion of risk is the most extreme position, companies are
now generally using the approach of issuing only a limited amount of insurance
(mostly $5,000 to $10,000) to those persons in the military, or those who are
facing an impending draft situation. Since this approach encompasses under-
writing rules rather than contractual language in a policy, it would be somewhat
difficult to give explicit information regarding all companies without having the
benefit of a survey conducted through the use of a questionnaire sent to all
insurance companies.
If you have any questions or desire any further information, please let inc know.
Very truly yours,
D&vro 1). MACDONALD, A.S.A., Actuary.
RIDER Monrrrrrvc CoNraner Dun TO IfAZABDS of Wa8
This rider is made a part of the contract to which it is attached and if the basic
contract to which it is attached or any provision attached to and made ,% pert of the
contract contains a conversion option, this rider will be made a part of any
contract issued as a result of the exercise of such option.
"Home area" as used in this rider means the 50 States of the United States, the
District of Columbia, Panama Canal Zone, Virgin Islands, Puerto Rico, and
Canada.
Death benefit.-No risk is assumed under this contract if the insured's death
occurs:
1. While the insured is serving in the armed forces of any country or inter-
national organisation, if (a) death is the direct result of war, whether war is
declared or not, or any act of war or of international armed conflict; and
(b) death occurs while the insured is outside the home area, or within 6
months after return to the home area or termination of such service, which-
ever is first; or
2. White the insured is serving in the armed forces of any country or intor-
na'tional organization, if death results from travel or flight in, or descent
from, any species of aircraft, and, during such travel, flight, or descent, the
insured shall have aeronautical training or duties in connection with such
travel, flight, or descent; or
3. While the insured, within 2 years from date of issue of this contract, is
engaged outside the home area in a civilian noncombatant occupation requir-
ing association with the. armed forces of any country or international organi-
zation, if such occupation causes exposure to perils of war, whether war is
declared or not, or any act of war or of international armed conflict, and if
death is the direct result of such war, act of war, or of armed conflict, and
death occurs outside the home area or within 6 months after the insured's
return to the home area.
However, upon receipt of duo proof of the death of the insured under the con-
ditions stated in paragraph I or 2 or 3, above, the company will pay to the
beneficiary, in lieu of the amounts provided in this contract, the reserve on the
amount of insurance provided by this contract at the date of death, less any
indebtedness to the company on or secured by this contract; provided, however,
if this contract shall have been in force. for not more than 2 years from date of
issue, the company will pay a sum equal to the amount of gross premiums thereto-
fore paid, less any undobtednoss to the company on or secured by this contract,
if such sum shall be greater than such reserve.
Premium waiver-
1. The "provision for premium waiver in event of total disability," when
made a part of this contract, is amended by adding the following now section
immediately after the section entitled "Benefits":
 Exclusion.-No premium will be waived or refunded under this provision
if total disability results, either directly or indirectly, from injury or disease
incurred while serving in the armed forces of any country or international
organizatior either at war, whether war is declared or not, or engaged in
any act of war or of international armed conflict.
2. "The provision for premium waiver in event of death or total disability
of the applicant," when made a part of this contract, is amended by adding
the following new section immediately after the section entitled "Benefits":
Exclusiot.,-No premium will be waived or refunded under this provision
if total disability or death results, either directly or indirectly, from injury
or disease incurred while serving in the armed forces of any country or inter..
national organization either at war, whether war is declared or not, or en-
gaged in any act of war or of international armed conflict.
This rider is made a part of this contract at its date of issue.
Tom TRAVELERS INSURANCE CO.,
R. F. Swswe,
Secretary, Life Department.
Mr. EVEr,ETT. Thank you a lot, Mr. Hansen.
Mr. Secrest?
Mr. SECB.EST. No questions.
Mr. Evn3ETm. Mr. Brown?
Mr. Ellsworth?
Mr. ELL ;WORTH. We certainly appreciate your contribution today.
We will certainly give it every consideration when we get into execu-
tive session.
Mr. HA cSEN. Thank you.
Mr. Ev METT. We have Congressman Weltner from Georgia. We
will appreciate it if you will file your statement for the record and you
hit the high points.
STATEMENT OF HON. CHARLES L. WELTNER, A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF GEORGIA
Mr. WELTNER. Thank you, Mr. Chairman. I will file a very
brief statement for the record.
Mr. EVEREVTT. Without objection, it will be filed at this point in
the record.
(Statement referred to follows:)
STA'nrmssT OF LION. CHARLES LoNesTREET WELTNER, A. REPRESENTATIVE IN
CoNorEss From Tnr STATs or GnouniA
Mr. Chairman, I appreciate the opportunity to appear here today on behalf
of If. It. 10286, which I introduced on August 4. This Mill would amend title
38 of the United States Code to provide special indemnity insurance for members
of the Armed Forces serving in combat zones.
The bill would be retroactive to January 1, 1962. Since then, approximately
600 American fighting men have died in Vietnam. Our participation in this
war is Icing expanded, and troop requirements presently tire 125,000 men. Con-
gress eerller this session appropriated an additional $700 million to support the
war, the draft has doubled, and studies are being made to determine whether
Iteservs units should be reactivated.
It is virtually impossible for a serviceman headed for Vietnam to purchase
insurance which will provide for his family in case of his death. The coverage
by pri"ate companies is inadequate and prohibitive in cost.
At ;he present time, under the dependency and indemnity compensation
program, a widow of a serviceman can receive $120 a month plus 12 percent of
her htsband's basic pay. Parents can qualify under this program if they meet
dcpenieaey requirements. One parent living alone with an annual income of
less tl.an $750 could receive $83 a month; with an annualincome of $1,000 or lose,
$63 a month; with an income of $1,250 or less, $50; with an annual income of
$1,50) or less, $33.50 a month; with an annual income less than $1,750, $17.00
a me nth.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11QEj2RFq7A`rA9W1A?r9roRcEs 2837
A parent, earning more than $1,750 a year-even if he or she is the sole survivor
of the serviceman-will receive no insurance.
These benefits are, payable whether the serviceman dies of pneumonia at a
stateside installation or on the battlefield in Vietnam. My bill would provide
extra and deserved benefits for death on the battlefield'.
I believe that it is the responsibility of the Federal Government to provide an
insurance program for these servicemen, as it did for servicemen in World War I,
World War II, and the Korean war.
It has always been the policy of the Federal Government in time of war to
provide special, cost-free, life insurance for American serviceman. This is right,
and it is the least that we can do for the men who risk their lives for us and for the
preservation of freedom around the world.
I urge that this committee favorably consider If.IR. 10286, and hope that it
can be passed during this session of Congress.
Mr. WELTNER. I appear in support of the measure under consider-
ation by this committee.
Some weeks prior to the passage of the Senate bill, I introduced in
the House, a bill styled H.R. 10286, which would provide $10,000
indemnity compensation for the beneficiaries of the serviceman who
lost his life in a combat zone.
I am certainly familiar with some of the problems in designating
the term combat zone. However, I feel that that can be done. It has
been done in the past. Under the present situation a serviceman who
lost his life in support of his country leaves no estate unless he comes
within the provisions of dependency under existing statutes.
Now it seems to me that we should provide for this war in which
this country is engaged the same protection for the serviceman who
lost his life in a combat zone that we have provided in previous
engagements.
.1 appear in support of H.R. 10286. I think it is time for Congress
to act on this measure and I urge this committee's favorable con-
sideration.
Mr. EVERETT. Thank you, sir.
Now, does your bill set up the old national service life insurance
program or does it pay the widow out of the Treasury?
Mr. WELTNER. My bill, Mr. Chairman, pays the widow or the
beneficiary or the next of kin from the Treasury over a period of 20
years at 2j~ percent interest.
It is not an NSLI plan. The bill specifically provides that if there
is any NSLI insurance in effect, the indemnity providel under this
bill would be the difference between the NSLI payment and the total
of $10,000.
Mr. EVERETT. Would a man who was killel in a training accident
in Fort Benning in your State be covered under your bill?
Mr. WELTNER. No, sir. He would only be covered by loss of life
in a combat zone.
Mr, EVERETT.
Mr. WELTNER.
Mr. EVERETT.
insurance for all
companies under
system today?
Mr, WELTNER.
deserves careful
proposition.
Designated by the President?
Yes, sir.
What is your thinking along the general theme of
servicemen wherever they might be, with private
a group plan such as we have in the civil service
I think that would certainly be an area that
consideration. I would tend to support that
 Approved For Releasse 200Wf>~I.6IA hb0Wttft44~Y01~~0~P~FD00BES
However, it seems to me that there is some difference in the responsi-
bility of the people in this country to the survivors of the serviceman
who lost his life in a combat zone.
Inder the present circumstances where the Nation is not engaged
in an all-out war, it seems to me that we owe some special considera-
tion to the families and survivors of those servicemen.
Mr. EVERETT. Thank you. We are certainly happy to have you.
You have made an outstanding contribution.
Mr. Secrest?
Mr. SEmtEST. I just, want to commend you for your bill ands also
for your testimony.
Mr. EVERETT. Mr. 3rown?
Mr. BROWN. No questions.
Mr. EVERETT. Mr. Ellsworth?
Mr. ELLSWORTU. I certainly want to join the chairman and the
other members of the subcommittee in commending Congressman
Weltner for his really outstanding contribution. He has been active
in this field for months, I know.
We certainly appreciate, Congressman Weltner, your coming up and
helping us out this morning with your testimony.
Mr. WEI:TNER. Thank you, sir. Thank you, Mr. Chairman.
Mr. EVERETT. Mr. Dunaway, we are happy to have you with its
today. We understand you were scheduled for tomorrow but you will
have to be out of town. We are certainly happy to accommodate you.
You have been here th-oughout the whole hearing. You have hoard
the advice I have tried to give everyone else to be as short as possible
and to hit the highlights. If you can do that, I will appreciate it.
STATEMENT OF CAR:;YLE M. DUNAWAY, GENERAL COUNSEL,
THE NATIONAL A3SOCIATION OF LIFE UNDERWRITERS
Mr. D UNAWAY. Thank you, sir.
Mr. EVERETT. Whoa do you represent, first, so that the record
might show?
Mr. DUNAWAY. I will read that right now.
My name is Carlyle M. Dunaway, and I am general counsel of the
National Association o' Life Underwriters. My organization is a
trade, association with an aggregate membership of over 93,000 indi-
viduals, principally life insurance agents, general agents, and managerrs.
Mr4 EVERETT. The companies do not belong to your organization?
Mrj DUNAWAY. No, Air; we represent life insurance agents and
general agents and managers. We do have some company officials
who are associate members but they are in a very small minority.
Mr.. EVERETT. Go ahead.
Mr. DUNAWAY. My purpose in appearing before your subcommit-
toe today is to give you my association's views regarding certain
proposals that you have under consideration to amend-or, more,
specifically, to add to-he existing system of servicemen's survivor
benefits.
I would like, in parti,ular, to direct my remarks to the Senate.
passedi servicemen's and,mnity bill, S. 2127, and the servicemen's
group ;life insurance bill, H.R. 10873.
S. 2,127 would provide: each serviceman on active duty with free
Approved For Release ~3t fP&'."d - 7'6b 4 IM56O11 against
 Approved For Release 2003/11 ~E 1T~T t 6 ~~~ ~~2 ~5~ 1 e8 RJ FORCES 2839
death occurring in a "combat" zone or as a direct result of an injury
or a disease incurred while serving in such a zone and not more than
2 years prior to death. This death benefit would be payable in 120
equal monthly installments, with interest at the rate of 2j percent
per year.
The serviceman could choose the beneficiary or beneficiaries of the
indemnity within the following four classes: spouse, children, parents,
and brothers and sisters. Thus, he would not be limited in his choice
to beneficiaries who were actual dependents.
As I have already indicated, the entire cost of the indemnity benefit
would be borne by the Federal Government.
S. 2127 also provides that, generally speaking, any serviceman who
hill had the indemnity coverage while serving in a combat zone would
have the right to bay lip to $10,000 of national service life insurance,
without medical examination, within 120 days after his separation
from active duty.
in short, S. 2127 would in essence resurrect a limited version of the
$10,000 gratuitous indemnity program which was provided under
Public Law 23, 82d Congress, and which was later eliminated by
Public Law 887., 84th Congress-the Servicemen's and Veterans'
Survivor Benefits Act of 1956.
On the other hand, H.R. 10873 would create a group life insurance
program. which would be underwritten by one or more private carriers
and which would provide coverage for all members of the Armed
Forces, rather than just for those serving in combat zones.
Under this proposed group plan, as we understand it, each service-
man would automatically be covered for $10,000 of insurance unless
lie elected in writing- either to reject the insurance or to take a smaller
amount. He would pay for the entire cost of the insurance except
that portion of the cost attributable to the extra hazard of military
service.
His contributions would be set at a fixed amount, regardless of his
age, and would be deducted each month from his basic pay. The
Federal Government would contribute to the plan those amounts
determined by the Administrator of Veterans' affairs to be sufficient
to meet that part of the insurance cost attributable to the extra
hazard of military service.
The serviceman would be completely free to designate the bene-
ficiaries of the insurance. However, if he did not make such it
designation., or if the designated beneficiaries did not survive him, the
insurance proceeds would be paid to other beneficiaries in the order
of preference specified in the bill.
Finally, the serviceman would have the right, within it certain
period of time following his separation from active duty, to buy an
individual insurance policy from any one of the carriers participating
in the group program. Presumably, such it policy would be issued
without it medical examination and in an amount not to exceed the
amount of the terminated group coverage.
In making our appraisal of the foregoing measures, we have at-
tempted to determine, first, whether or not a problem exists that
necessitates or warrants action by the Federal Government at this
time, and second, if such it problem does exist, the most appropriate
means of solving it.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For ReI4849 211aD9 f s: @i34?T~g3i~B ~00~k6 ~f1 ~1$f;
In this process we have carefully considered the history and purpose
of Public Law 881, 84th Congress, which I will now briefly review.
As your subcommittee will recall, Public Law 881 was enacted in
1956 largely in the form in which it had originally been developed
by the House Select Committee on Survivor Benefits after many
months of exhaustive study and numerous public hearings in 1954
and 1955.
Among the prime objectives which the select committee sought to
achieve, and which were reflected in Public Law 881, as finally enacted,
were (1) the substantial liberalization of benefits payable by the
Veterans' Administration to the surviving dependents of deceased
servicemen at as small an additional cost to the taxpayers as possible,
(2) the concomitant elimination, by and large, of th.e payment of
Government benefits to nondependent survivors, and (3) the removal
of any distinction between the amount of survivor benefits paid on
account of in-service deaths occurring in peacetime and those occurring
in wartime.
Regarding the last-rientioned objective, the termination of the
$10,000 gratuitous indemnity program, and the adequacy of the
benefits provided in Public Law 881 (then designated as H.$. 7089),
the select committee made the following statement (H. Rept. 993,
84th Cong., pt. I, p. 26)
Special note should be taken that the committee has labeled future Veterans'
Administration payments as "dependency and indemnity compensation." ]'his
has particular significance, for although the gratuitous indemnity is terminated
under this bill 'the committee is of the opinion that the increased Veterans' Adniin-
istration payments do ref cot what was formerly both compensation and in-
demnity.
In testimony before the committee some witnesses have stated that in the event
of another national emergency or war, where men entering the Armed Forces
could not obtain additional survivor benefits via commercial insurance except
with a war clause provision, it would be necessary for the Federal Government to
provide some insurance prrtection under a Government-sponsored and Govern-
ment-underwritten program.
Under the package benefits-i.e., Veterans' Administration dependency' and
indemnity compensation plus social security-contained in its bill, the committee
feels that the coverage provided is adequate for both peacetime and wartime
conditions. The committee urges that, following enactment of the proposed
legislation, the Congress, in the future, not consider adding insurance or any
other supplementary survivor benefits beyond those provided in I3.1t. 7039.
The philosophy thu; expressed by the select committee was, ob-
viously embraced by Congress-and, particularly, by the House of
Representatives--for while H.R. 7089, as amended by the Senate
Finance Committee aid passed by the Senate, included a provision
that would have revived the $10,000 gratuitous indemnity in case of
war or national emergencies involving hostilities, that provision was
deleted in conference.
Even at the levels Initially set on January 1, 1,957, the effective
date of Public Law 881 the VA dependency and indemnity compensa-
tion (DIC) benefits and the social security survivor benefits provided
thereunder were generally conceded to be quite generous. And both
types of these benefits have since been rather substantially increased.
Therefore, in our opinion, there can be no serious question regarding
the ndequacy of the levels of benefits provided to eligible survivors
of deceased servicemer.
The problem, if there is a problem, seems to stem principally from
Approved For Rele 'faOO31tht/OtviCI*aDff67B8044@Rf MOM106t%a*ders to go
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2841
to, it combat zone such as South Vietnam, are finding it increasingly
difficult to buy privato life insurance, or to buy such insurance without
war exclusion clauses.
In these circumstances, it is argued, many such servicemen are
being deprived of the opportunity to supplement the Public Law 881
survivor benefits or-perhaps more irnportant--to provide any sur-
vivor benefits at all for certain classes of individuals (notably, non-
dependent parents) who are not eligible to qualify for Public Law
881 benefits.
For example, in its report of August 16, 1965, accompanying S. 2127,
the Senate Finance Committee had this to say (S. Rept. 619, 89th
Cong., 1st sess., p. 3):
It was readily apparent to the committee, therefore, that thousands of young
men who are being called to service as a result of the current planned buildup
of our forces, have great difficulty and, in many cases, are unable to secure
adequate insurance protection for their families.
Thus, the unavailability of private insurance coverage makes it obligatory for
our Federal Government to provide all servicemen in combat areas with insurance
protection as proposed in this bill.
At the August 11 hearing held by the Senate Finance Committee
on S. 2127, we opposed enactment of the bill for two main reasons.
First, we took the stand that reinstatement of the proposed $10,000
gratuitious indemnity on top of the present DIG benefits would
materially vitiate the carefully developed plan of the House Select
Committee on Survivor Benefits and the intent of Congress in enacting
Public Law 881, which I have earlier mentioned, and tend to add sub-
stantially to the cost of the VA's overall survivor benefits program.
Second, we contended that the proposed indemnity program is
unnecessary for the reason that although servicemen are admittedly
now finding it quite difficult to buy private life insurance without
war exclusion clauses once they are in, or have been ordered to, it
combat zone, they still have ample, opportunity to buy insurance
policies containing on such clauses at least until the very time they
are alerted to go to a combat zone.
In that connection, I would like to stress what Congressman
Hanson said a while ago, that we see in those servicemen the source
of the real problem that Congress is faced with today.
It is our feeling that but for the fact that these men who are ordered
to combat zones, or who are in combat zones, are unable to buy
private life insurance without war exclusion clauses, there would he
no pressure on Congress to do anything at this time.
With respect to the question that you addressed to several witnesses,
Mr. Everett, as to whether or not the indemnity bill would cover death
in training camps and so on, of course the answer is no, it would not.
But there again, those men are still able to buy all the private insur-
ance they want without war exclusion clauses, so they don't pose the
problem.
Mr. EVERETT. Well, will they?
Mr. DIINAWAY. I hope that if our 93,000 members gat on them,
they will. I don't think it is because of any lack of aggressiveness
on the part of our agents that some servicemen have not bought
life insurance. I imagine that a lot of the servicemen who have been
killed in Vietnam had ample opportunity at one time or another to
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2842 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
buy insurance but that for one reason or another, they decided to put
it of to another day, which, as any life insurance agent will tell you
is a very common obstacle to the sale of life insurance.
Mr. EVERETT. I thick a. lot of people buy insurance on account of
the aggressiveness of the insurance salesman. They would not
have it otherwise when they needed it. There are ft lot of policies
I would not have bought back yonder if it had not been for the
aggressiveness of the salesman at that time.
Mr. DTNAWAY. There is an old adage that life insurance is not
bought, it is sold.
We have since reviewed one position on S. 2127. In the process,
we have concluded that any problem which may now exist with
respect to servicemen's survivor benefits and which may warrant
action by the Federal Government involves only servicemen in the
relatively limited category referred to above, who cannot now buy
private life insurance without war exclusion clauses.
We have also concluded that if Congress feels impelled to take. care
of this problem, the indemnity approach provided in S. 2127 would
appear to peoeide the most desirable and equitable solution, and
that we would have io further objection to S. 2127, provided that it
was amended in one important respect.
The amendment referred to would be one that would permit a
serviceman, upon separation from active duty, to buy national
service life insurance only if he had incurred a service-connected
disability that rend3red him commercially uninsurable at standard.
rates,
Mr. EvERErT. Yen mean he is service connected and comes under
the law that we pawed last year, or the year before last?
Mr. DUNAwAY. No, sir. That is the distinction I want to make
here, Under the law now in existence, a discharged serviceman may
buy NSLI if he has a service-connected disability Which, although
?ero in degree for the purpose of compensation, is in a category
which would entitle him to compensation if it were 10 percent or
lucre in degree.
; In other words,3here are cases that I have heard of where, lot us
say, a serviceman has an appendectomy while in service. It is a
perfectly normal appendectomy but he comes out of the service with
a scar.
As I understand the situation, that man can buy NSLT upon
determination that he did have this slight disability. The same
thing is true of another case of which I heard where a serviceman
suffered a cut over one eye which required several stitches. This man,
we were told, would be entitled to buy NSLI under existing law. We
think that such a man ought to have a service-connected disability
which impairs his insurability at standard rates in order to qualify for
NSLT.
I don't mean that the disability should render him completely
commercially uninsurable but simply uninsurable at standard rates.
Mr. EVERETT. Yes. Go ahead.
Mr. DUNAWAY. We are very much opposed to H.R. 10873, the
servicemen's group life insurance bill, for several reasons.
In the first place, by making $10,000 of group life insurance coverage
available to every member of the Armed Forces, this bill would
needlessly provide for the vast majority of servicemen who, on their
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR TIIE ARMED FORCES 2843
own, can already buy all of the life insurance that they want or need
without war exclusion clauses.
Second, while it is true that each serviceman would automatically
be covered under the proposed group program unless lie elected either
not to be covered or to be covered for less than the $10,000 maximum,
the fact is that he would have the right to make such an election.
In our opinion, this might tend to produce a situation, similar to
that experienced in the case of the World War II NSLI program, in
which many combat servicemen who needed the insurance coverage
most might wind up with much less than the full $10,000 of coverage
or, even worse, with. no coverage at all.
Mr. SECREST. From that statement you either figure they all
ought to be covered or none, we ought to cover all of them if we are
to cover any to the maximum.
Your statement infers if you take a little piece of it, it is no good.
Mr. DUNAWAY. If you are talking about covering m.andatorily
all of the members of the Armed Forces under an indemnity program,
for example, we would be opposed to that at this time.
But as to the proposed group program, first of all, we think that
it is too broad. It represents a shotgun approach to it problem which
requires a rifle approach. However, we merely point out, the election
feature as being it possible weakness in the proposed group insurance
approach and one which might lead to the type of situation referred
to in my statement.
In that connection, during World War II, 1 believe it was shown
that something like 10 percent of the servicemen killed had no NSLI
at all while something like 44 percent of those insured had less than
the full $10,000 of coverage. This was one of the factors that con-
tributed greatly to the abandonment of the NSLI program originally.
Finally, H.R. 10573 provides in effect that the Federal Govern-
ment would bear that portion of the cost of the group life insurance
prod am traceable to the extra hazard of military service.
Since this is the case, we submit that it would be much simpler and
perhaps less expensive for the Government funds to be paid directly
under the type of iudernnity program proposed in S. 2127 rather than
under a comprehensive and complex insurance program of the sort
contemplated by H.R. 1.0873.
On behalf of my association, I would like to express deep apprecia-
tion for this opportunity to appear before your subcommittee. If
you feel that we can be of further assistance to you in your considera-
tion of S. 2127 or H.R. 10873, we trust that you. will contact its at any
time,
Mr. EVERETT. Thank you, sir.
I know that you are opposed to H.R. 10873, but given the choice
between H.R. 10873 and reopening national service life insurance as
it was in World War IT, which choice would. you take?
Mr. DUNAWAY. You present me with it Ilobson's choice, Mr.
Chairman. I think that we would in that case undoubtedly have to
go for the group life insurance program.
Mr. Evnt ETT. Thank you sir. We certainly apprenate the con-
tribution you have made.
Mr. Ellsworth?
Mr. ELLS WORTH. Thank you, Mr. Chairman. I have no questions.
Mr. EvLRETT. Mr. Socrest?
 Approved For Release 2003111/04: CIA-RDP67B00446R000500210005-9
Mr. SECnEST. This has -nothing to do with this bill, but 39 years:
ago I was an insurance agent. My old district manager would always:
say you contact 10, you will sell 1. Have you upped the percentage?
Mr. DUNAwAY. I can't answer that queston, sir. I am only a
lawyer. I only go arouna with a lot of life insurance agents. So I
really could not answer thrt question. All I know is this: The agents
still wear their shoe soles out and keep their knuckles raw knocking
on doors trying to persuade the people of the country to buy more and
more insurance.
Mr.!SECREST. When. I worked as an agent on life insurance we got
50 percent of the first premium. Have you upped that for the agents
any in the last 39 years?
Mr, DUNAWAY. I think that the classical commission schedule pro-
vides for a 55-percent first year commission with 9 annual 5 percent
renewal commissions. That is the classical pattern, although it varies.
As'you say, the first-year commission could be 50 percent with
maybe a slightly greater percentage of annual renewal commissions
than, the 5 percent that I mentioned. By and large, the commission
arrapgement of which ?rou speak is pretty much the same one that is
in existence today. Cf course, there are some companies that pay
more than that. They are companies, by and large, that don't do
business under tho veer stringent strictures of the New York insurance
laws. But, generally speaking, there has not been too much of a
change in commission schedules over the years.
Mr. EVERETT. Mr. Brown?
Mr. BROWN. No questions.
Mr. EVERETT. I might add that I certainly want to congratulate
your association. I think that life insurance salesmen are better
equipped and better qualified today to do a job in selling insurance
than they were several years ago.
They have seminars for there and they are better educated.
Let me say we are certainly happy to have you. We certainly
will be calling on you as we progress in deciding what will be the best
for the servicemen is this Nation today.
Mr. Corcoran.
STATEMENT OF THOMAS CORCORAN ON BEHALF OF MARSH &
McLENNAN
Mr. CORCORAN. My name is Thomas Corcoran. I am it lawyer
in Washington, D.C., at 1511 K Street NW. I represent Marsh &
'McLennan who are probably one of the most knowledgeable brokers
in the insurance business.
Mr. Chairman, I will get you out of here long before Halloween.
Mr. EvEUPTT. Thank you, sir. If you will the your statement.
Mr. CORco AP:. I am not even going to file a statement, After
the testimony o' Mr. Rood, we really don't need to speak at all
because Mr. Rood has spoken very eloquently for the possibility
of a group insur tnce plan, H.R. 10873, which we only wanted to say
to you out of eur long experience, we think is completely feasible
just as it was in the FEGLI situation.
We do urge on the committee that no matter what is said, the
rates will be s. much cheaper and the coverage will be so much
simpler in a gaup situation that we really think the armed services
 Approved For Release 200~IA~QP3Ct1R~~~~4rR580~Ea 2845
should be given a chance to work out their insurance on a group
basis as the civil servant was given a chance to work it out in the
FEGLI bill.
We think the group plan can be worked out. We very much
commend the testimony of Mr. Rood whom we think has spoken for
us most eloquently.
Mr. EvEnETT. Thank you, sir.
Mr. Secrest?
Mr. SECnES'r. I want to say in 1933, 1934. 1935, 1936, 1937, along
through there, I voted for some legislation that allegedly you had
a hand in drawing.
Mr. COnconAN. No, sir; I was just a miserable little consultant.
Mr. SncRFST. I was going to say it must have been pretty good
legislation because I am still here. The Supreme Court knocked two
or three out in a hurry.
Mr. CORCORAN. No none of those I helped out on. They knocked
out some of the others. But the ones you voted for and I helped on
were never knocked out.
The group insurance business has so many possibilities today of
cutting rates almost in half that we really think the majority of the
committee should take that group possibility into consideration as
Mr. Rood said. A group plan can be worked out, sir. Out of our
long experience, Marsh McClennan knows it can.
And may you got out before Halloween..
Mr. EVERETT. Mr. Patterson, are there any other witnesses?
COUNSEL. The VA, Department of Defense and veterans organiza-
tions tomorrow, Mr. Chairman.
Mr. EVERETT. Thank you for being so nice to in. We will see you
tomorrow morning at 10 o'clock. The meeting is adjourned.
(Whereupon, at 10:50 a.m. the subcommittee recessed, to reconvene
at 10 a.m., Thursday, September 9, 1965.)
 PROVISION OF INDEMNITY OR INSURANCE FOR INDI-
VIDUALS SERVING IN THE ARMED FORCES
THURSDAY, SEPTEMBER 9, 1965
HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE OF THE
COMMITTEE ON VETERANS' AFFAIRS.
Washington, D.C.
The subcommittee met at 10 a.m., vursuant to recess, in room 356,
Cannon Building, Iron. Robert A. Everett (chairman of the sub-
committee) presiding.
Mr. EvERETT. The committee will come to order.
We are meeting this morning to continue, and I hope conclude,
hearings on H.R. 10873 on the subject of insurance and other measures
related thereto.
Our first witness this morning is our colleague, the Honorable
Sidney R. Yates, of Illinois.
Mr. Yates, we are certainly happy to have you before the com-
mittee, and you may proceed in your own way.
STATEMENT OF HON. SIDNEY It. YATES, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF ILLINOIS
Mr. YATES. Mr. Chairman, I thank the committee for this oppor-
tunity to present briefly my views in support of special indemnity
insurance for members of the Armed Forces serving in combat zones.
I have introduced a bill to provide for such insurance in the amount
of $10.000. My bill, II.R. 10301, is similar to the bill passed by the
Senate. I am inclined to favor the amendment agreed to in the
Senate which defines an equitable formula for distribution of payments
to survivors.
The semantics of conflict in these difficult times should not detract
from our consideration of this bill. The United States is not involved
in a declared war, yet we are at war, and the protection for our service-
men that we now consider should be no less than the protection we
have tendered to the men who have in the past been summoned to
risk their lives on the far frontiers of freedom.
The fortunes of war preclude any security of life and limb for those
in combat areas. But, we can offer these follow citizens the security
afforded by an insurance policy which assures them that in the event
of their death their loved ones whl have a measure of protection.
This assurance to servicemen that their parents, wives, and children
will be looked after is the least a grateful nation can offer.
I do not consider the cost of this program excessive in view of the
total expenditures of the war effort and especially in view of the total
Approved For Release 0031 felt(04ItGt~A~F02b6f~i11 spend
2847
 Approved For,Release /1Tf @41/ ftbFW1& 618$0 32 (%-6oxCt:s
$10 billion or more a year on the war in Vietnam. Our defense budget
approaches $50 billion per year. To date, more than 600 Americans
have (lied in Vietnam. The Administrator of Veterans' Affairs has
assumed a mortality rate of 1,200 deaths per year in Vietnam. At
this rate, the total incurred yearly cost of the proposed indemnity
program would be $13,377,600, including the interest factor. If we
are to look for savings of $13 million, I believe there are many other
areas of the budget in which we could look rather than in the area
of compensating tie survivors of those who have given their lives in
fighting this war.
At the present time, the benefits that accrue to survivors of the
more than 600 Americans who have died in Vietnam are no greater
than the benefits that accrue to survivors of other military personnel
who die while on active duty from any cause. The protection offered
personnel in combat zones is madequate to the dangers to which they
are exposed. The Department of Defense recognizes this hazard of
combat in pay increments but not in death benefits.
The fact that the proposed indemnity program is terminal in no
way detracts from its value. The bill does not jeopardize the benefit
structure now in effect. The present compensation program for
service-connected disabilities would remain in effect, and dependency
and indemnity compensation funds would still be payable to qualified
survivors of men now serving in Vietnam, where death results from
it service-connected disease or injury. The new indemnity program
supplements these worthy programs.
I assume that the committee will give some attention to the possible
role of private ins trance companies in underwriting combat personnel.
I cannot imagine too many 18-year-olds with sufficient resources to
pay premiums for private policies, assuming these policies were
available. I was interested to note that the Senate Committee on
Finance had. difficulty in finding even a handful of private carriers
willing to insure personnel en route to or already on the scene in
Vietnam. The Administrator of Veterans' Affairs found only three
insurance companies willing to insure such personnel Clearly, if it is
not economically feasible for private firms to pursue this work, it is
the province of Congress to extend this protection, since there is no
one else to do it.
I would hope that the need for this legislation would diminish. I
hope, and I believe all Americans hope, that the American involvement
in Vietnam will not be prolonged. But whether it is Vietnam, or
Santo Domingo, ;.t is clear that American forces will be called upon to
serve in places of danger and some of our men will die on distant
shores. We cannot place too high a premium on the lives of the
individuals who are called to this service.
By offering them this protection, we are able to share their burden
if only in a small way, and to lot them know that we recognize and are
grateful for the service they render for us.
Mr. EVERETT. Thank you, Mr. Yates.
Are there any questions?
If not, thank von again, Mr. Yates.
Mr. YATES. 'thank you, Mr. Chairman.
Mr. EVERETT. The subcommittee will now hear from Congressman
Matsunaga of Hawaii. Go right ahead, Mr. Matsunaga.
Approved For Release( 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2849
STATEMENT OF SPARK M. MATSUNAGA, MEMBER OF CONGRESS
FROM HAWAII
Mr. MATSUNAGA. Mr. Chairman and members of the subcommit-
tee, I thank you for this opportunity of appeasing before you and.
expressing my views with respect to R.R. 9748, a bill to amend title 38,
United States Code, to provide warbime rates of disability cornpensa-
tion for veterans disabled from injury or disease incurred or aggravated
by overseas service and free insurance protection for members of the
Armed Forces serving overseas, which, along with other identical or
similar bills, is now under consideration by this subcommittee.
Even before our present deep involvement in Vietnam, there appears
to have been a widespread recognition on the part of Members of
Congress and others of the need to provide our men in the military
service, especially those who serve overseas, with free insurance pro-
tection. Such recognition of this need., as this subcommittee is fully
aware, has been evidenced by the large number of bills on the subject
which were introduced in the 88th Congress, and by the multitude of
bills which are now the subject of these hearings.
The need for at least minimal insurance protection for each of our
servicemen who face increased risk of death, injury, or disease while
serving this Nation's interests abroad has become acute in recent
months. With the commitment of more and more U.S. forces in
Vietnam, our life insurance companies are looking with less and less
favor upon servicemen as policyholders.
Just how far the sorvicenian has fallen in favor as a prospective
policyholder of lire insurance companies was the subject of a recent
survey conducted by one of the leading newspapers in Hawaii. Major
company representatives of some of the leading insurance compameo
of America were contacted. The question asked was whether com-
mercial life insurance was available to servicemen who m,ay be sent
to Vietnam and whether there had been a recent change in company
policy in insuring military personnel. Typical of the responses
received were the following:
We will not sell to a moan going to Vietnam.
We just got the word of a change in policy. Should we know that a man is
going to Vietnam, we won't sell to him.
We have a war clause in our contracts and have had (one) for some time.
We had the same (clause) during World War It and the Korean war.
Mr. Chairman, it is my understanding that if a man is killed today
in combat, his survivors will receive a lump-sum social security pay-
ment of $255, and dependency and indemnity compensation will be
paid to the widow and/or parents, if dependents, of $120. To this
amount the Veterans' Administration adds 12 percent of the basic
pay of the deceased serviceman.. So this is a sliding scale payment
based on rank. Unless there is life insurance which is payable, there-
fore, the sums received are wholly inadequate to provide for the
needs of the family of the deceased serviceman.
My bill, H.R. 9748, is identical to the Daniels bill U.R. 6161,
and provides automatic insurance to each member of the tkrmed Forces
while he is on active duty outside the United States. The insurance
is in the amount of $10,000, and would be provided by the United
States without cost to the member. The $10,000, however, would
be reduced by the amount of U.S. Government life insurance or
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2850 INDEMNIFY OR INSURANCE FOR THE ARMED FORCE
national service life insurance held by the insured and in force at
the time of his death.
In addition, E.R. 9748 would amend section 336 of title 38, United
States Code, to provide wartime rates of disability compensation
for veterans disabled from injury or disease incurred or aggravated
by overseas service.
Mr. Chairman and members of the subcommittee, for the men of
our Armed Forces who serve our Nation's interests overseas, for their
parents, their wives, and children, I strongly urge that II.R. 9748 or
a bill with substantially the same provisions, be reported favorably
by this subcommittee.
Thank you s cry much.
Mr. EVEIRETT. We are pleased to have as our next vvit~ness this
morning our distinguished Administrator of Veterans' Affairs, the
Honorable William J. Driver.
Mr. Driver, we are certainly happy to have you, and you may
proceed.
STATEMENT OF HON. WILLIAM J. DRIVER, ADMINISTRATOR OF
VETERANS AFFAIRS; ACCOMPANIED BY ROBERT C. FABLE,
JR., GENERAL COUNSEL; D. C. KNAPP, ASSISTANT GENERAL
COUNSEL; AND A. W. STRATTON, CHIEF BENEFITS DIRECTOR
Mr. DRIVER. Thank you very much., Mr. Chairman.
I have sov,aral VA people here.
Mr. FVERErr. Will you introduce them, please, for the committee
and for the benefit of those in the audience?
Mr. D,uIv7-It. 13ere at the table with me are the General Counsel,
Mr, Fable; and his assistant, Mn Knapp; and the Chief Benefits
Director, M:-. Stratton.
Mr. F v ia.ETT. We are certainly happy to have all of you. And
since your statement is a short one, I think it would be better to read
it because 0is goes to the meat of the coconut here, f think, exactly
your position on this bill.
Mn Dan En. Thank you, Mr, Chairman.
I am pleased to present the views of the Veterans' Administration
on S. 2127, S9th Congress, a bill to establish a program of free "special
indemnity insurance" for members of the Armed Forces serving in a
combat zone, and on TT.R. 10873, a bill to establish a program of
group life insurance to be provided by private insurance companies
for members of the uniformed services who are on active duty.
S. 2127 proposes to provide a maximum amount of $10,000 auto-
matic free "special indemnity insurance" (reduced by the amount of
national service life or U.S. Government life insurance in force at
the time of death) for death while on active duty with the Armed
Forces in a combat zone (as that term is defined in the bill) on and
after January 1, 1962, or as a direct result of an injury or disease
incurred in a combat zone not more than 2 years prior to death.
The iniaued would have the right to designate the beneficiaries of
the special indemnity insurance, but only within the classes named:
spouse, children, parents, brothers, or sisters of the insured. The
benefit would be payable to the surviving beneficiaries over a 10-year
period. The bill provides for apportionment of the benefits payable
with respect to certain beneficiaries under prescribed criteria.
Approved For Re~ease 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR TUUE ARMED FORCES 2851
Mr. EvERErr. Mr. Driver, why do you limit that to just spouse,
children, parents, brothers, and sisters?
Mr. DRrvmt. This is described in. the Senate bill, Mr. Chairman.
Mr. EVERETT. I see.
Mr. DRrvER. I am merely referring to what this bill would provide
for,
Mr. EVERETT. You are talking about the Senate bill?
Mr. DRIVER. Yes, sir. We are in no way adding to the proviyious
of the bill in this description.
Mr. EV LETT. Good. Go right ahead.
Mr. DRIVER. The bill would also authorize for persons insured
under U.S. Government Life or national service life insurance, a
waiver of all premiums on term insurance and that portion of the
premium representing the pure insuranco charges oil ponnanent plan
insurance during the period they were covered by the special indemnity
insurance. Such insureds would have to continue their insnrauca in
force by payment of premiums and a tply fora refund after teururiaLion
of their combat zone duty. Finally, the bill would authorize the
issuance of postservice insurance to persons entitled to indemnity
protection, tinder certain conditions.
'S'he general purpose of II.R. 10873 is to authorize the Administrator
of Vegeraus' Affairs to purchase, from one or more, cotvrnorcial life
insurance companies a group life iusurturco policy or policies which
world automatically insure each member of the uniforrtted services
on active duty in the amount of $10,000 unless such member declined
to be so insured or to be insured in an amount lee's than $10,000.
A premium--which would be uniform for all servicemen--would be
deducted from his pay. The Government would con tribute an amount
to cover the excess mortality cost of such insurance traceable to the
extra hazard of service.
The group life insurance granted under the bill would cease 120
days after separation from active ditty. While the group insurance
was in force the insured could-upon application, payment or the
required p,ronuturts, and without inedical examination--convert to a
permanent plan of insurance then written by one of the participating
commercial companies selected by the insured.
The group insurance would be payable to the designated beneficiary
or beneficiaries selected by the insured. In the absence of a desig-
nated beneficiary, the insurance would be payable to the surviving
spouse; children; parents; duly appointed executor or administrator
of the Insured's estate; or to other next of kilt under the laws of the
domicile of the insured at the time of his death.
The bill specifies certain criteria governing the selection, by the
Administrator, of the primary commercial insurer and would require
that company to reinsure portions of the total amount of insurance
with such other life insurance companies as may elect to participate
in the program.
Recently in the course of our consideration of the general field of
veterans benefits and particularly the aspects with which S. 2127
and II.R. 1O873 are concerned-certain factors have become in-
ereasingly apparent. First, although it is true that commercial
insurance is available without restriction to servicemen who are
performing essentially peacetime ditties, it is argued that those upon
who have, been altered for, or who are serving in, a combat, zone are
5a-112- a?--7
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 not readily able to obtain-at standard rates and without war exch.
sion clauses--commercial insurance coverage.
Second, many of our young servicemen do not have it wife or chil-
dren. In the event of their death, the program of dependency and
indemnity cnnpensation established by the Survivor Benefits Act
authorizes benefits for their parents only if they meet a spe rafted
"needs" test and for two parents living together no dependency or
indemnity cunpensation benefits are payable if their annual income
exceeds $2,4)0. It is extremely difficult to devise a change within the
framework of the existing program which would provide benefits for
nondependent parents within the basic needs concept that has been
incorporatec in it. Third, there are servicemen who are survived by
individuals such as brothers or sisters who are not afforded any
benefits under the dependency and indemnity compensation program,
but to when the serviceman may well foot lie owes some survivorship
protection.
The groin life insurance proposal, II.lt. 10873, provides a feasible
solution to these prob.lemns. It would authorize $10,000 insurance
coverage for all men in service; it would make benefits available in
those cases where only nondependent parents survive it man killed in
service; and it would permit servicemen to designate oth.er beneficiaries
now ineligible under the survivor benefits law. Under S. 212'7, the
indeurluity nIl; t}te entire cost would be borne by the Government.
Thus, a firther gratuity would be superimposed on the existing
gratuitous survivor benefits program which, including full social
security co'rorage, was carefully evolved by the House of Representa-
tives select committee about 1.0 years ago.
On the other hand, II.IL. 10873, by requiring premium payments
which, in the absence of it very extensive escalation of the military
situation, will make the program close to self-supporting. Accordingly
this approach will make available in every case a reasonable amount of
insurance )rotection, the unavailability of which the sponsors of S.
2127 assert is the basic justification for the indeminity approach.
In the light of the foregoing consideration, I am unable to recom-
mend favorable action on S. 2127, but sin pleased to inform the com-
mittee the,t the Veterans' Administration supports the principle of
group life insurance as proposed inH.R. 10873. Iunderstand that
certain technical and other perfecting amendments to the bill are
indicated. In this connection, my staff will be available to the com-
mittoe at any time to assist in working out such amendments,
Mr. EvauErT. We certainly thank you, Mr. Driver, and I certainly
appreciate the fact that you as Administrator of the Veterans' Ad-
ministratim have endorsed this principle in this committee bill that
we have fitroduced.
Any questions, Mr. Secrost?
Mr.SEJaEST. I appreciate, also, your comment with respect to
that bill and I want, also, to commend you in the. highest terms of
which I am capable for your administrative action in restoring the
size of th3 burial flag for deceased veterans.
Mr. D,uvEu. Thank you, Mr. Secrost.
Mr. EVEREnT. Mr. Brown?
Mr. Teague?
Nix. TEAGUE of California. No questions Mr. Chairman.
Mr. EvihETT. Mr. Meadows.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Relea a t11104 INCIA RDP67B00446R000500210005 9853
STAFF DIRECTOR, Mr. Driver, in the administration of this pro-
grain, do you visualize undue problems or undue difficulty in setting
up an organization to develop an administrative program such as this
group program?
Mr. DRIVER. Within the VA?
STAFF DIRECTOR. Yes.
Mr. DRIVER. No; we don't anticipate any difficulty.
STAFF DIRECTOR. Than]( you.
Mr. EVERETT. Mr. Driver, don't., you think a better approach
is to let private enterprise participate in this rather than to get into
all of the ramifications of the old national service life insurance?
Mr. DRIVER. We do, Mi. Chairman. I think this is a very
imaginative and worthwhile approach to this problem.
Mr. EVERETT. Thank you, sir.
Mr. Patterson, do you have any questions?
COUNSEL. No, Mr. Chairman; I do not.
Mr. EVERETT. We certainly thank you and thank your staff for
the work you have already done on this bill, and we will certainly
be calling on you as we got to perfecting amendments before the
subcommittee meets in executive session.
Mr. DRIVER, Thank you, sir,
Mr. EVERETT. General Berg.
General, we are certainly happy to have you this morning, and the
Colonel.
STATEMENT OF BRIG. GEN. WILLIAM W. BERG, DEPARTMENT OF
DEFENSE, ACCOMPANIED BY COL, HERBERT B. ALLEN, U.S.
ARMY
General BERG. Colonel Allen, sir.
Mr. EvERETT. Thank you, sir. General, you may proceed.
General BERG. Mr. Chairman and members of this coinmittop, f am
William W. Berg, brigadier general, U.S. Air Force, Deputy Assistant
Secretary of Defense for Manpower (Military Personnel Policy). I
appreciate the opportunity to express the views of the Department of
Defense on S. 2127 and 11.11. 10873.
Since these bills affect laws administered solely by the Veterans'
Administration, the Department of Defense defers to the views of
that agency as to the technical merits of these bills. Because, however,
these bills affect benefits for our military members and their depend-
ents, I believe it is necessary to comment on the Senate bill and
certain features of H.R. 10873.
We are gratified at the concern of the Congress for the wives,
children, parents, and other dependents of servicemen who die in the
service of their country. We have carefully reviewed S. 2127 as
passed by the Senate and believe that the concept of the gratuitous
indemnification as contained in the bill does not, in our opinion, meet
current insurance needs of the members of the uniformed services.
On the other hand, the Dopartmo?t of Defense strongly supports
the principles contained in II.R. 10873 because, with some minor
revisions, it contributes to the accomplishments of several objectives
favored by the Department.
First, the bill provides an irrrm.ediate, low-cost, group insurance
Approved Forl1kW&aLLYSlil6'4alldfK-Nb Y 964 a 00b%bra216bOs5 9 ru-
 r
Approved For Release 2003/ B* : G~1 7~$Ot 4~~1~ 5d 1 a 5 ~tMr v FORCES
ing to the Federal Government. In so doing, it moots a basic re-
quirement to cover those young members whose nondependent sur-
vivors would not qualify for payments under dependency and
indemnity ;awe.
Second, the bill effects an added inducement to a service career.
Third, the bill provides yet another element of it sound financial
plan for members and their survivors in event of their death.
The program that would be established by this bill would be
administered by the Veterans' Administration and has been corn-
mented on by that agency. The Department of Defense strongly
supports th~3 concept of group life insurance for servicemen which is
embodied in II.R. 1.0873. The Department considers that the bill
would contr.bute importantly to the morale of members of the Armed
Forces by runedying certain limit gaps in the covert~ge of the Veteran
Survivoralup Act and would also be extremely helpful in connection
with the recant difficulty that members of the Armed Forces assigned
to Vietnam would enccunter in obtaining private insurance.
As I stated, 11.11. 10873 contains a number of technical provisions
which will be of primary concern to the Veterans' Administration
but some of which are of interest to this Department. However,
there has not been sufficient time for its to make a detailed study
of all these provisions. We would therefore propose to defer coin
meriting on :hem and plan to work with members of the committee
staff in the next few days concerning suggestions which we believe
would irnprcve the bill.
I would lice to repeat again: the Department of Defense strongly
supports the group life insurance concept embodied in II.B. 10873 and
urges early enactment of legislation embodying such a concept.
I appreciate this opportunity to appear before thelconrmittee to
express the views of the Department of Defense. I will be pleased
to attempt to answer questions on this subject.
Mr. EvEnnpT. Thank you, General. That is certainly a fine state-
ment. How long will it take your group and your staff to got together
to study the perfecting amendments we ought to have for this bill?
General BERG. We are ready now, sir.
Mr. EvERETT. You are?
General BERG. Yes, sir.
Mr. EvEUUTr. General, do you anticipate much cost to the Depart-
ment of Defense in administering the withholding on this?
General BERG. No, sir; we do not.
Mr. EVERETT. We certainly thank you for your statement.
Mr. Secrest?
Mr. SECREBT. Would you object if this were compulsory for all
members of the awned services?
General BERG. Compulsory?
Mr. SECREST. Compulsory rather than to have somebody go in
today and ou; tomorrow, and in for part of it, and up and down the
scale as was lone, certainly, under U.S. Government life insurance
and NSLI.
General BEaG. I think ,you would run into some problems in that,
Mr. Secrest, in making it compulsory for people, particularly when
they had to p iy for it themselves. We had this problem, you know,
with insurance dining World War 11. Even then a man could not be
Approved For Release 20oy[4`j%g t~lti~'* i a,,d bd&~Mttyo l66b6"-g correctly, I think
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY 011 INSURANCE FOR T11E ARMED FORCES 2855
under the group life insurance that the Federal Civil Service has today
you do not have to be a part of it, but you do have to indicate that it
has been made available to you and you do not wish it.
Mr. EvERETT. In writing, as I understand. it.
General BERG. That is correct.
Mr. 'L'EAGUE of California. Would the gentleman yield?
Mr. SECREST. Yes.
Mr. TEAGUE of California. What would you think of some sort of
compromise on this principle? For instance, having it initially com-
pulsory, say for 90 days, so that all servicemen would be covered, and
then a requirement that they rile some sort of a form indicating they
don't want it, if they want out after 90 days?
General BERG. As I understand it, sir, that is just another form
of the provision as it is now written certifying that you don't want it.
You would merely cover them for the first 90 days under that.
Mr. EvERETT. Go right ahead, Mr. Secrest.
Mr. SECREST. I was thinking personally of many hardship cases
where it veteran did not 'take insurance or took only a small amount,
and then after he died the family Caine in, wanted insu.rauce and
couldn't get it because he hadn't signed up for it. I was just wonder-
ing about thedesirability of, as cheap as it is, everyone taking it.
Then, no matter where you go in the world, you are insured.
Mr. EvjR.ETT. Mr. Brown?
Mr. BROwN. No questions, Mr. Chapman.
Mr. EVERETT. Mr. Meadows?
STAFF DIRECTOR. General, the bill colder consideration., of course,
has a $10,000 maximum figure. Does the Department of Defense
have any views on both the question of whether it should be $10,000
or more, and also whether we should retain this provision in. the bill
that permits increments of $500 and up? Do you have views on both
those questions?
General BERG. The only comment I could make on that, Mr.
Meadows, is I have been working on the so-called. Federal Staff
Retirement Committee that the President established last February
to review the survivor annuity programs of all Federal employees,
and we have discussed a proposal before that committee to essen-
tially adopt a progiam of group life insurance for military people
which is patterned after the current civil service program. And
under that program, the amount of insurance that you are limited
to. is equal in thousand dollar increptonts to the salary that you draw.
And under that concept, our people could go as higli as $20,000.
The relative pros and cons, whether it should be $10,000, or whether
it should be higher, we don't have an official position on.
STAFF DIRECTOR. That is all.
Mr. EVERETT. Mr. Patterson?
COUNSEL.:i have no questions, Mr. Chairman.
Mr. SECREST. I would like to ask just one more question.
Mr. EvERETT. Yes, sir.
Mr. SECREST. As I recall, years ago certainly, compulsory con-
tributions were required from members of the Armed Forces to
maintain the Soldiers home. Has that been discarded, or do you
still have that?
General BERG. It is still in effect today.
Mr. SECREST. That is compulsory. You have no election there.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2856 INDEMNITY OIL INSURANCE FOR THE ARMED FORCES
General BERG. That is correct,
Mr. SECREST. Very few out of all the millions that serve ever go to
the Soldiers' home.
General BERG That is correct. You. are absolutely right. That
contribution is 1) cents a month.
Mr. SECnEST. For those that go, it is a very substantial and wonder-
ful place out there.
General Bmw. That's right.
Mr. SECIiEST. That is all.
Mr. EVERETT. Thank you, General. We certainly appreciate your
contribution,
COUNSEL. Mr. Chairman, we have a further statement from Mr.
Dunaway of th j National Association of Life Underwriters that he
would like to have included in the record with some additional infor-
mation.
Mr. EVERETT. Without objection, it will be entered at this point
in the record.
(The statement referred to follows:)
rule NATIONAL AssocIATION or LIFE UNDERWRITERS,
Washington, D.C., September 8, 1965.
Re servicemen's indemnity bill, S, 2127, and servicemen's group life insurance bill,
H. R. 10873.
1-Ion. Ronunr A. EvnRETT,
Chairman, House'7eterans' Affairs Subcommittee on Insurance,
Cannon House Of)-.ce Building, Washington, D.C.
DEAR MR. Eva alit: For such assistance as it may be to your Subc om.mittee on
Insurance in its consideration of the above-captioned bills, I are enclosing here-
with my letter of August 27, 1965, to Senator Harry F. Byrd, chairman of the
Senate Finance Committee, in which I listed certain life insurance companies
that were then (end presumably still are) issuing policies without, war exclusion
to servicemen either in or alerted to we to a combat zone.
Since my original letter to Senator Byrd, we have been advised by the American
Life Convention t.nd the Life Insurance Association of America that the following
three additional companies are also issuing policies without war exclusion clauses
to the types of servicemen referred to above:
1. The Equitable Life Assurance Society of the United States, 1285 Avenue of
the Americas, New York, N.Y.
2. Girard Life Insurance Co. of America, Post Office Box 5297, Dallas, Tax.
3. Reliance Str.ndard Life Insurance Co., Four Penn Center Plaza, Philadelphia,
Pa.
We would also like to take this opportunity to make one additional comment
regarding S. 212that concerns the scope of the indemnity coverage that would
be provided ther under.
At the September 8 hearing held by your subcommittee, there seemed to be a
certain amount of criticism directed at S. 2127 because of the fact that it would
provide for the payment of the indemnity benefit only to the beneficiaries of
servicemen who died on active duty while in a combat zone or as a direct result
of an injury or c. disease incurred while serving in such a zone, and that the bill
would do nothing for the survivors of servicemen who, for example, died while
on route to or from such a zone.
It seems to us that this criticism, if considered important, couid easily be taken
care of by a simple amendment to S. 2127 that would extend the indemnity pro-
tection to servicemen while en route to or from a combat one, and perhaps also
to those who have been ordered or alerted to go to such a zone. With such a
broadening amendment, S. 2127 would, in our opinion, adequately provide for
all servicemen who, solely because of their particular status, are, finding it difficult.
to buy private life insurance without war exclusion clauses. And as I tried. to
point out at your September 8 hearing, it is principally the plight of the servicemen
in this relative][} limited category that apparently has generated the problem that
Congress Is now being importuned to solve.
 INDEMNITY OR INSURANCE FOR THE ARMED FORCES 28557
If you are agreeable, we would very much appreciate having this letter and the
enclosure included in the record of the hearings held by your subcommittee on the
bills referred to above.
Sincerely years,
CARLYLE M. DUNAWAY,
General Counsel.
Re servicemen's indemnity bill S. 2127,
Ron. HARRY F. BYRD,
Chairman, Senate Finance Committee,
New Senate Office Building,
Washington, D.C.
DEAR SENATOR BYRn: During the course of the August I I hearing held by the
Senate Finance Committee on the above-captioned bill, Senator Norman E.
Talmadge asked our association to provide a list of the life insurance companies
that will issue policies without war exclusion clauses to servicemen already in a
combat zone or alerted to move to such a zone.
After the hearing, we found that, unfortunately, it would not be possible to
coo ile the requested information in time for inclusion in the record of the hearing
on S. 2127, which was closed on August 1G, We advised the Senate Finance
Committee office of this fact and were then asked to furnish the information as
soon as possible.
We also determined that it would not be possible-certainly not within it reason-
ably short time span-to canvass all of the 1,500-plus legal reserve life insurance
companies doing business in the United States for the desired information. Ifow-
ever; we concluded that a highly meaningful amount of the information could be
gathered by canvassing the member companies of the American Life Convention
and the Life Insurance Association of America, which are the two major life
insurance company trade associations in this country. In this connection, we
wish to point out that the 330 ALC-LIAA member companies have in force over
93 ppercent of the legal reserve life insurance written in the United States.
The ALC and the I IAA very kindly cooperated with us on this project by Bond-
ing an appropriate questionnaire to their member companies on August 16. As
of today, approximately two-thirds of these companies have replied to the ques-
tionnaire, indicating their present practices regarding the use of war exclusion
clauses.
According to their replies, 23 of the companies will issue life insurance policies
without either a war exclusion clause or an extra premium for war hazard to
servicemen who are in a combat zone or who have been alerted to move to one.
The names and addresses of these companies are as follows:
1. American National Insurance Co., Moody Avenue at Market Street, Galves-
ton, Tex.
2. Bankers Mutual Life Insurance Co., 500 West South Street, Freeport, Ill.
3. Boston Mutual Life Insurance Co., 156 Stuart Street, Boston, Mass.
4. The College Life Insurance Co. of America, College Square at Central Court
South, Post Office Box 72, Indianapolis Ind
5. Country Life Insurance Co., Post office 1'3ox 575, Bloomington, Ill,
6. Farm bureau Life Insurance Co. of Michigan, 4000 North Grand River
Avenue, Lansing, Mich.
7. Federal Life Insurance Co. (Mutual), 6100 North Cicero Avenue, Chicago, Ill.
8. Grange Mutual Life Co., Post Office Box 48, Nampa, Idaho.
9. The 11BA Life Insurance Co., First Street at Willetta, Post Office Box 1272,
Phoenix, Ariz.
10. Life Insurance Co. of Georgia, 573 West Peachtree Street NE., Post Office
Box 6207, Atlanta, Ga.
11. Metropolitan Life Insurance Co., I Madison Avenue, New York, N.Y.
12, The Mutual Life Insurance Co., of New York, 1740 Broadway, New York,
N, Y.
13. National Guardian Life Insurance Co., Post OfficeBox 1t91, Madison, Wis.
14. North Central Life Insurance Co., North Central Lifo Building, Minnesota
and Fourth Streets, St. Paul, Minn.
15. Northern National Life Insurance Co., 219 North Seventh Street, Bismarck,
N. Dak.
 I I
Approved For Release 2003111/04: CIA-RDP67B00446R000500210005-9
2858 INDEMNITY OR INSIIRANCP, FOIL THE ARMED FORCES
16, The Old Line Life Insurance Co. of America, 707 North I IthStreet, Mil-
waukee, Wis.
17. Pacific Fidelity Life Insurance Co., 1.150 South Olive Street; Los Angeles,
Calif.
i' 18. Pacific Nationti Life Assurance Co., 215 Market Street, San Francisco, Calif.
19. Pioneer American Insurance Co., 6401 Camp Bowie Boulevard, Fort Worth,
Tex.
20. Rio Grande NEtional Life Insurance Co., 251 . North Field Street, Dallas, Tor..
21. United dervie,g Life Insurance Co., 1701 Pennsylvania Avenue NW.,
Washington, D.C. (officers only).
22. Universal Life & Accident Insurance Co., Post Office Box 779, Dallas, 'fox.
23. The Wisconsir- Life. Insurance Co? Post Office Box 5099, Madison, Wis.
Art additional five companies will issue such policies to servicemen who have
been alerted to gc to a combat zone but not to those already in such a zone.
The names and addresses of those companies are as follows:
1. American N:utual Life Insurance Co., Liberty Building, Sixth and Grand
Avenues, Des Moines, Iowa.
2. The First Pyramid Life Insurance Co. of America, Pyramid Life Building,
Little Rock, Ark. (officers only).
3. Gibraltar life Insurance Co. of America, Post Office Box 599, Dallas, Tex.
4. New York Life Insurance Co., 51 Madison Avenue, Now York, N.Y.
5. The Traveers Insurance Co., One Tower Square, Ifartford, Conn.
Most of these 28 companies impose, maximum limits on the amount of coverage
they will issue L) servicemen in the circumstances under discussion. These limits
vary considerably from company to company, but in only thred companies are
they as low AS 65,000. la all of the others, the limits are at least $10,000.
We trust that this information satisfactorily complies with Senator Talmadge's
re< uest. If anything further is needed, please do not hesitate ton contact us..
We are scatting copies of this letter to all members of the Senate Finance
Committee.
Sincerely yours,
CAItLYLE, M. DUNAW&Y,
General Counsel.
Mr. EvEJuE'rT. Our next witness will be Mr. Corcoran of the
American Legion. Go right ahead, Mr. Corcoran.
STATEMEb;T OF JOHN J. CORCORAN, AMERICAN LEGION; ACCOM-
PAN ED BY ROBERT F. MURPHY, ASSISTANT DIRECTOR, NA-
TIONAL LEGISLATIVE COMMISSION; AND CHARLES E. MAT-
TINGLY, CHIEF, INSURANCE ACTIVITIES
Mr. MIIUrnv. Mr. Chairman, my name is Robert F. Murphy, the
assistant 3irector of our National Legislative Commission.
Mr. EvTRl:TT. Good. We are certainly happy to have you.
Mr. Munrur. 'ITis morning we have with its our chief of our
insurance activities, Mr. Charles Mattingly, and our principal wit-
ness, Mr. John Corcoran, Director of the National Rehabilitation
Comnusuion of the American Legion.
Mr. Fv1.RETT. Thank You. We are certainly happy to have all
three of you, and if you will file your statement for the record and hit
the high points, we will certainly appreciate it.
Mr. ColtcouAN. Mr. Chairman, if T read the statement, it will take
about 12 to 14 minutes. Do you still prefer that T file it?
Mr. Evrnrrr,r. Do you have it summarized there?
Mr. CORCORAN. Yes.
Mr. EVEUETT. I would just rather have the statement filed and
let's just summarize the high points of it, if you don't mind.
Mr. COUCORA.N. All right, sir.
(M". Co rcorail's statement follows:)
 STATEMENT BY JOHN J. Concou.9N, DmLcIon, NATIONAL Rn,rABILITATION
COMMISSION, TIIE AMiatICaw LeGION, SEPTEMBEn 9, 1965
Mr. Chairman and members of the subcommittee, the American Legion appre-
ciates this opportunity to present its views on proposals now before this dis-
tinguished subcommittee to restore insurability to certain members of our Armed
Forces.
On September 2, 1065, the 20th anniversary of the cessation of hostilities of
World War II, I was privileged to appear before the full House Committee on
Veterans' Affairs to present the views of the American Legion, as established. by
our national convention held last month, on the so-called cold war GI bill.
This experience was a special source of pride to me, as a representative of the
American Legion, because the American Legion was the chief architect of the
original Of bill of rights, a law singled out by so many of our Nation's leaders as
the most constructive legislation ever enacted by the Congress for veterans.
The American Legion believed in 1944, as now, that the sacrifices of our Armed
Forces personnel, in defending the principles of freedom and democracy, entitle
there to special consideration by a grateful. Nation. At the present time, Basin-
bore of the Armed Forces are being subjected to special disciplines and depriva-
tions. They have been assigned obligations and duties as hazardous as those
experienced by servicemen of other wars. For this reason, the American Legion
believes that the members of our Armed Forces are entitled to additional benefits
comparable to those offered veterans and their dependents of other wars. The
offering of insurance protection to restore lost insurability to these servicemen is a
proper. consideration in any move to place benefits on a comparable basis. Our
position in this matter is contained in resolution No. 125, approved August 26,
1965, by our national convention. With your permission, Mr. Chairman, I
would like to submit a copy of resolution No. 125 for the record.
As I mentioned to the full committee in my statement of September 2, 1065,
Resolution No. 125 directs us to seek "comparable" benefits for all persons who
Served after August 5, 1964. The word "comparable" was chosen deliberately
because it was recognized that the possibility exists that we should not seek iden-
tcal,benefits. Several proposals dealing with the question of offering insurance
to servicemen are now under study by my staff for recommendation to our national
executive committee, which meets October 6-7, 1965. Until our national execu-
tive committee approves a specific instruction concerning the type of insurance.
that we support, my remarks must necessarily remain general in nature.
The opportunity for servicemen to obtain adequate insurance protection at
reasonable cost from commercial sources, without restriction as to the hazards of
war, is rapidly drying up. In, fact, many companies have already placed war
restriction clauses in contracts offered to these men. We have learned that other
companies will do this if applications in any volume are received from servicemen
alerted for overseas duty. With the expansion of activities in Vietnam, and
other areas, we assume that insurance protection from commercial sources will
soon be unobtainable. Under these circumstances, Mr. Chairman, the American
Legion believes that it is only simple justice for the Government to fill this void.
With certain changes and modifications, we find much to recommend support
of the proposals contained in S. 2127 and I1.1. 10873, and other bills, of similar
nature introduced for this purpose. In addition to the free indemnity and group
life insurance approaches, I also believe the offering of contractual insurance is
worthy of study by this subcommittee..
Traditionally, the American Legion has favored contractual insurance is best.
In addition to offering adequate insurance prote.etion on an optional basis, at
reasonable cost to the serviceman, it fosters a sense of responsibility and thrift.
It also offers greater flexibility in naming the beneficiaries, and determining the
manner in which the proceeds will be, paid. We recognize, however, that con-
tractual insurance for persons in the active service may. have some drawbacks.
For example, in World War IT, for one reason or another, about 1 out of 10
persons who died was not insured. In addition, of those deaths covered by some
insurance, only about 56 percent carried the maximum amount allowable. We
believe that many of those younger servicemen, in the lower enlisted grades,
simply failed to appreciate the value of insurance and, perhaps, were less able to
authorize allotments from their meager service pay to cover the cost of p-omiums.
The proposal to offer a free indemnity type of coverage against death for
dependents of servicemen is also worthy of careful consideration. It would auto-
matically provide maximum insurance protection for the families and dependents
of all servicemen on an equal basis. Since all o'f.the proposals under considera-
58-412-65--8
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2860 INDEMNITY )R INSURANCE FOR THE ARMED FORCES
tion would require the Government to pay the cost of liabilities attributable to
the extra hazards of war, it is believed that the free indemnity approach would
result in little addition'il cost to the Government, as compared to offering regular
contractual or group He insurance. This was certainly the case in World War
II, as about 80 percent of all inservice deaths were found to be attributable to
the extra hazards of war,
r The proposal to provide a group type of life insurance for members of the
Armed Forces is new. As I understand it, participation in the program would
be discretionary, as wnr1d the amount of insurance to be carried up to a maximum
of $10,000. This ap-nroaeh could be the means of providing low cost protection
for servicemen. IIo sever, it also presents some of the inadequacies of regular
contractual insurance. I fear that many younger servicemen, in the lower pay
grades, with the least means of adequately providing for their dependents in the
event of death, would be the most prone not to participate, or carry the maximum
amount allowable, I also note that, under this proposal, liabilities traceable to
the extra hazards 6f war will be borne by the Government. Assuming that
hostilities in Vietnam accelerate to any appreciable degree, the cost of this in-
eurance to the Government would probably he about the same as the cost of
free indemnity program.
The American Legion is opposed to any proposal that would call for the in-
surance offered to be underwritten by commercial sources, or in any way separated
from the Veterans' Administration. Our established policy is contained in
Resolution 28 of our May 1963 national executive committee meeting. That
resolution expresses the conviction that an insurance program conducted by the
Veterans' Admini titration is the most efficient and economical kind, and is the one
that offers the gr;atest service to insureds.
Beyond that, eve believe it is the basic, fundamental, and traditional responsi-
bility of the Fedarai Government to provide an insurance program for the survi-
vors of servieen.en dying under the circumstances existing in the world toda .
In this connecti-m, I would like to invite your attention to the statement by Mr.
Ralph R. Loupe bury, chairman of the Joint National Service Life Insurance Com-
mittee of the American Life Convention of Chicago, and the:. Life Insurance
Association of America of New York, Associations of Legal Reserve Life Insurance
Companies, cortained in the transcript of hearings conducted January 25, 1951
on similar pro}osate to cover Korean conflict veterans. Mr. Lounsbury stateci
in part follows:
We wish tti make it abundantly clear that the life insurance companies fully
recognize the need for a Government program which will provide a measure of
pprotection to the dependents of servicemen while on active duty in the Armed
Forces of our country in time of war, or who lose their normal insurability while
in such servine. The life insurance companies commonly issue complete coverage
on servieema:n during peacetime and even in wartime are in position to offer
insurance on a part of the risk; that is, the normal hazards as distinguished from
the abnormal hazards of service in time of war. When the prospects of abnormal
hazards of w ar become too great, the private companies cannot issue new insurance
to include these hazards without charging premium rates which are so high that
few servicemen could afford to buy the protection. It is obvious that when the
Government undertakes to insure these hazardous risks at rates based on normal
hazards, the excess mortality cost is borne by the taxpayers, as we believe it should
be, To th n extent that the Government insures the normal hazards, the Govern-
ment furnishes coverage which is readily available from private insurers. We
recognize, however, that during the period of active service while the Nation is
at war or in a national emergency, it is not practical to limit the Government
coverage to death resulting from only the abnormal hazards."
The American Legion believes that our worldwide commitments have assumed
the proportions of a national emergency and that our servicemen are being required
to perform duties in extremely hazardous and warlike circumstances. We feel,
therefore, that the Government should support, by congressional appropriations,
any insr ranee program offered these servicemen.
What part would the commercial life insurance companies play under the group
proposal? They would establish an administrative office and underwite the risks.
The service department would keep the records and deduct the premiums. The
Veterans' Administration would administer the total program. The Federal
Government would bear the cost of deaths due to the extra hazards of service.
Nothing rmains, really, for the commercial companies to.'do except realize a profit
from the premiums charged. We don't criticize the commercial insurance eom-
paniee for seeking a profit; that's what they are in business for. We simply main-
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2861
twin that indemnifying the. lives of our servicemen and providing a degree of pro-
tection to their parents, widows, and orphans is not a business transaction; it is
the responsibility of the Government.
Regardless of the approach this subcommittee chooses to recommend as the
vehicle to provide some type of insurance protection for these servicemen, I believe
certain general provisions should be included. To mention a few:
1. There should be no service area restriction as to the persons covered. Con-
sistent with long-standing policy of the American Legion, we feel that, with respect
to any insurance coverage made available by the Government, all persons who
served after August 5, 1964, or the date selected by the Congress, should be
treated equally, regardless of place of service.
2. Gratuitous insurance benefits should be paid, without a dependency test
or restriction as to any other benefit, to widows, children, parent, or parents,
in the order named, surviving servicemen who die while performing active duty
between August 5, 1964, or the date selected by Congress, and the date insurance
coverage under the now proposal becomes available.
3. Provisions should be made for waiver of that portion of any premium
representing the cost of the pure risk on any contractual USGLI or NLSI carried
by the serviceman on the basis of prior service, similar to the provision contained
in section 622 of the Servicemen's Indemnity Act of 1951 (38 U.S.C. 724).
4. Some type of contractual insurance should be made available, without
regard to condition of health, upon application made in writing to the Veterans'
Administration within 120 days after separation from the active service.
Mr. Chairman, the American Legion appreciates the opportunity to offer
these suggestions, subject to the limitation of our national convention instruction
concerning insurance coverage for insorvice personnel. After our national
executive committee has had an opportunity to consider the proposals presently
under study, we will be in a position to specifically inform the subcommittee of
the official position of the American Legion in this regard.
Thank you.
FORTY-SEVENTH ANNUAL NATIONAL CONVENTION OF THE AMERICAN LEeroN,
PORTLAND, OREO., AvousT 24-26, 1965
Resolution: No. 125 (California).
Committee: Rehabilitation.
Subject: Sponsor and support legislation to provide for cold war veterans a
benefits program comparable to that available to other war veterans.
Whereas, the United States is now and has been for some time engaged in
actions in various areas of the world to keep peace and preserve the freedom of
friendly nations against aggression; and
Whereas American fighting men have been and are increasingly being subjected
to wartime conditions, are suffering casualties and are dying in defense of freedom
loving people everywhere; and
Whereas the conditions to which our servicemen are being subjected are similar
to those whieh existed when certain rights and benefits were granted to those
who served in World War II and Korea; and
Whereas the war veterans program is comprehensive, justified, and a proven
program supported by the American Legion and the general public; and
Whereas on August 5, 1964, in Tonkin Bay off the coast of Vietnam aggressive
acts of war were taken against U.S. warships which retaliated and since that
time our country has engaged in conflict with hostile forces both in Vietnam and
elsewhere: Now therefore, be it
Resolved, by the American Legion in national convention assembled in Portland,
Oreg., August 24-26, 1965, That the American Legion recognizes the sacrifices of
our Armed Forces personnel who are defending the principles of freedom and
democracy and that it shall sponsor and support a benefits program comparable
to that available to other war veterans for those veterans who have served since
August 5, 1964, or such other date as may be selected by the national convention.
Approved.
Mr. CORtCORAN. First of all, we appreciate the opportunity to
appear before the committee and to express the views of the American
Legion on the proposals that are pending before you. We are not
in a position at this time, regrotably, to specifically support or oppose
any of the three different types of approaches suggested, or implied,
or inherent in the bills before you.
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
2862 INDEMNITY OR INSURANCE FOR THE ARMED FORCES
This is so, because we appear before you between a national con-
vention and a national executive committee meting, and the latter
body has been given the responsibility by the former body to decide
specifically what benefits )ught to be extended to the inservice
personnel.
Lot me tell you some the basic considerations that underlie our
pposition. ; Let me begin by saying that our position is that while we
do not oppose a group life insurance coverage plan.; we tend to favor
an indemnity approach which would make at discharge some type of
contractual insurance available.
Let rne,give you about sic or seven points that, as I say, I think.
form the foundation for the American Legion position. First of all,
the Legion, after careful study, has concluded that the size, and the
scope, and the nature of the military operations being engaged in by
the United States in Vietnam and in other areas, and our military
And other cormnitunents throughout the world, constitute an emergency
situation and have the effect of creating a substantial number of
"war" veterans.
Secondly, we have con.cludcd that, therefore, additional war period
benefits ought to be extendec to the persons who are serving in our
Armed Forces now.
Next--and this is as a .resuh of a long-established Legion position-
we feel thafwhatovet benefits are extended ought to be extended to all
people who serve, because every man in service goes where Uncle
tells him. Be doesn't select his place of service.
Mr. EVERETT. Under this b 11, lie would be included, wouldn't he?
Mr. CORCORAN. There is nc objection on that point to your bill,
or to the group life.
Mr. EvE,RhTT. Yes, sir, Go right ahead.
Mr. CORC?RAN. Next, we fe11 that one of the benefits that ought
to be extended is an insurance-type benefit. We foal that in the
light of the circumstances that I have described above-namely, the
emergency situation, the military situation, the fact that we are
creating war veterans-it is theresponsibility of the Federal Govern-
ment to provide the insurance.
. Mr. EvnRIlTT. In other wordu, you think the Federal Government
ought to pay for it all out of tie Treasury, rather than to have the
contributions; right?
Mr. Co1tco tAN. The committee could decide, of course, to take
the contractual type of insurane, in which case the insured would
pay the premiums on the risks; that's true. So we take no specific
position on that, although we fond toward the indemnity, in which
case the Government. would pay all. But in World War II, Mr.
Chairman, 89 percent of the prose jds paid were found to ho attributable
to the extra hazards of military service. So we are not talking about
a great deal, if the situation. is similar to World War II.
We quote an insurance industry expert who says that once you find
yourself in an,ennergency situation or a warlike situation, it. is not
practicable to separate the risks that are due to extra hazards. He
points out that really basically the risks duo not to extra hazards ought
to be borne by the commercial companies; but he says once you find
yourself,in a warlike situation, they just can't do it. So he said:
We concede that it is all sight for the Federal Government to take over the whole
obligation.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
4
 INDEMNITY OR INSURANCE FOR THE ARMED C C 99,,8R63
Approved For Release 2003/11/04: CIA-RDP67B00446R00050Rb'Y1&05_;
We feel that the Federal Government is in the best position to pro-
vide the service and that insurance by the Federal Government would
bomost beneficial to the insureds. And we think that they deserve the
best. We see no reason to involve the commercial companies.
Under the plan contained in. the bill you introduced, Mr. Everett,
we see very little part that the commercial companies would play,
as we understand the bill. The service department would keep the
records. They would take the allotments. The Veterans' Admin-
istration would administer the total program. Commercial com-
panies would have an office, which might be a small one. It appears
that the principal part that the commercial companies would play
would be to realize a profit. We don't object to that. That is
what the companies are in business for. But we maintain that
indemnifying the lives of servicemen in service under the present
conditions and providing some protection to their survivors is not a
business world transaction.
That concludes our testimony, Mr. Chairman.
Mr. EVERETT. Thank you, sir.
Mr. Secrest?
Mr. SECREST. As I gather it, you are 100 percent for the Federal
Government paying any soldier or any serviceman who may be killed
in action or as a result of extrahazardous duty anyplace in the world.
You are for that much definitely?
Mr. CORCORAN. Yes, sir.
Mr. SECREST. As to some serviceman who may be in the Pentagon
for 2 years, who lives here in Washington, you object to his contribu-
tion toward his own insurance?
Mr. CORCORAN. Resolution 125 asks that all servicemen be covered.
Mr. SECREST. Is that the part you haven't studied yet?
Mr. CORCORAN. It isn't so much a question of not having studied
it. I think the question you have really asked is: Corcoran, under
these circumstances are you for contractual or for indemnity? And
unfortunately the NEC, the first week of next month, is going to
give me the answer and instruction on that. So I don't have an
official position at this time.
Mr. SECREST. I notice here that you say:
I fear many younger servicemen in the lower paid grades would be most prone
not to participate, so that would indicate that it should be compulsory if you are
going to protect that group.
Mr. CORCORAN. As we also point out that was the experience in
World War II. One out of ton didn't have any insurance. Out of
all the insurance paid, the average payment was between $8,000 and
$9,000 rather than the $10,000. And if you install the group-type
plan, this may be your experience again. And who will fail to take
it out? The i'ellow who can least afford it and probably the man who
has the greatest obligation to leave something to his survivors.
Mr. SECREST. That would be true, if we went from $500 in incre-
ments, but if we had, say, $5,000 compulsory for everyone and $5,000
more elective, or if we had the whole $10,000 compulsory, there would
be no partial payments or cases where no payment is made, as occurred
under the World War II program.
Mr. CORCORAN. Agreed.
Mr. EVERETT. Mr. Brown?
Mr. BROWN. No questions.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 FOR THE ARMED FORCES
Approved For Release; 2003/1 : 500210005-9
Mr. EVESETT. Mr. Teague?
Mr. TEA13uE of California. No questions.
Mr. EvE 3Err. Thank you. We are certainly happy to have you.
Mr. Meadows, do you have any questions?
STAFF DIRECTOR. Just one point, Mr. Chairman.
Mr. Corcoran, you were quoting an insurance expert and you talked
about the difficulty that he believed would be encountered in de-
termining the scope of the extrahazardous.
Mr. ConconAN. Yes, sir.
STAFF D utECTOR. It is true that we got through World War II
and the Korean conflict and were able to make that determination,
is it not?
Mr. ConcoRAN. Actually, Mr. Meadows, the point that I made
was not the one you just described, and I didn't snake myself clear.
What Mr. Lounsbury said was that there is no great difficulty in
determining which deaths are due to extra hazards and which are
not; however, when you are in a wartime situation, the most feasible
way to progress, rather than going to the administrative problem of
straightening them out, is to just let the Federal Government take
over the whole obligation.
STAFF 11 JEECTOR. You weren't making the point that we probably
would got ;o a situation where we couldn't determine the extrahazard-
ous versus the nonextrahazardous?
Mr. ConcoRAN. No; I didn't make, that point.
Mr. EvnmETT. Mr. Patterson, do you have anything?
COUNSEL. No, sir.
Mr. EviRETT. Thank you. We certainly appreciate all the con-
tributions you and the members of your staff have made to our
committee.
Mr. Co reonAN. Thank you, sir.
Mr. EV&RETT. Mr. Stover, Veterans of Foreign Wars.
We are happy to have you.
And, Mr. Jones, we are happy to have you also.
If you will file your statement and just summarize it for us, we
will cortanly appreciate it.
STATEMENT OF FRANCIS W. STOVER, VETERANS OF FOREIGN
WARS, ACCOMPANIED BY NORMAN D. JONES, NATIONAL
REHABILITATION DIRECTOR
Mr. Sr )V ER, Mr. Chairman, members of the subcommittee, the
Veterans of Foreign Wars has long held- that campaign and expedi-
tionary service for which campaign medals are authorized should be
elevated to wartime status for the purpose of veterans' benefits. And
in line with this position, Ave strongly supported S. 2127 when it was
considered at a hearing before the Senate Finance
realized rt that time that this bill didn't cover all possible cases and
maybe wis not the full solution to this matter.
Subsequent to that hearing, our organization mot in Chicago, Ill.,
at convention, and our position has been broad-
ened flnational wartime to include wartirno benefits for all who are serving in the Armed
Forces. And in considering the legislation under consideration here
today, our organization reached the conclusion that if it was at all
h la be made retroactive to cover
Approved For Release 2003/111`:ibPA'-1~~0~'~G~Se0tls5~~210005-9
 INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2865
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
those extrahazardous deaths which have occured since the end of the
Korean conflict. I don't know what the problems or cost might be,
but there have been many deaths like those who were inducted to
serve and their airplane crashed on the way to training camp, or sub-
marines have gone down like the Thresher, and a lot of other deaths
under warlike conditions.
Mr. SECREST. I believe we had testimony yesterday that those
deaths of that type, such as where a parachute fails to open, and
various other things, amounted to about 500 a month, which is the
casualty rate in Vietnam so far.
Mr. STOVER. We have also taken note of your bill, Mr. Chairman,
and believe this could be the solution. The main purpose, as I
understand, of the Government getting into the life insurance program
is that the life insurance industry isn't providing insurance. We all
know many policies have war clauses which go into effect whenever
it serviceman is serving in a combat zone or under warlike conditions.
If the insurance industry and the veteran and the Government can
join together to provide adequate insurance at a very low or minimal
cost, it seems that we may have the solution which will be satisfactory
to all concerned. I know that 25 cents a thousand has boon men-
tioned, and certainly this sounds like a very, very reasonable cost to
a serviceman whose basic pay, I might point out, is considerably
more than it was during World War II, at which time, as I recollect,
5-year level premium term insurance was about. 65 cents a thousand
for a serviceman around 21 years of age.
I might also point out that the $10,000 figure was set for the national
service life insurance program on October 8, 1940, and we don't have
to go into the record to know that $10,000 in 1940 bought a lot more
goods, and possessions, and homes, and everything else than it will
in 1965.
Mr. EVERETT. Would you recommend $20,000 rather than the
$10,000?
Mr. STOVER. Yes, sir; we certainly would. Because if Congress
is going to mive the wartime protection that we gave to our servicemen
in World War IT, certainly it ought to be a comparable amount under
today's scale of prices and cost of living.
Mr. EVERETT. You know, the first quality of a man elected to
Congress is: Can lie be elected? And so, do you think this would
overload the wagon so we couldn't pull it, to make it $20,000 rather
than $10,000? .
Mr. STOVER. I think it should be available if the serviceman wants
it and is willing to pay for it.
Mr. EVERETT, Well, don't you think we would get into adminis-
trative difficulty in putting him in the position whore ho. could buy
anything he wanted? I mean, it's possible this would just keep us
? in confusion all the time.
Mr. STOVER. 1 wouldn't advocate anything that would have that
result; but the cost of living in the last 25 years, I believe it is sub-
stantially correct to state, has doubled since before World War II.
But this is not our position and it is mentioned only as a possibility
to be considered.
Mr. Jones, would you care to make any comments?
Mr. JONES. Not on that point.
 Approved For Release 20039 b4 PffAl~dk%64 a 882 05 En 'FORCES
Mr. STovE t. This summarizes my statement here, Mr. Chairman.
Mr. Jones wculd like to make a comment.
Mr. EVERITT. Any questions, Mr. Teague?
Mr. Secrest?
Mr. SECRMT. I just want to get it clear. You do not object to
this type of legislation?
Mr. Srovu:t. No, sir; we do not object. In fact, as a general.
principle I believe our Chicago resolution, No. 244, is authority to
support it.
Mr. EVEUFTT. Mr. Brown?
Mr. Buowra. No questions.
Mr. EVLUnTT. I take it from your statement that ?you feel that
private enteiprise should participate in this program rather than
putting the Government back in We life insurance business.
Mr. STOVER. Yes; that is our view so long as the VA administers
the program. The private insurance industry is one of the biggest
and richest industries in America and they certainly have profited
tremendously durin the last 25 years. It seems to inc they have
an obligation to fill this gap which has occurred in our insurance
system for active duty servicemen and should be called upon to help
out and maka a contribution.
Mr. EvEunTT. Mr. Teague?
Mr. TEAG1rE of California. No questions.
Mr. EVEUnTT. Mr. Jones, we will be glad to hear from you.
Mr. JONES. Just two or three little points. I heard the discussion
previously this morning about whether this should be compulsory.
That might have some problems. I think the provision in your bill
which says they would have to decline it, would be adequate, provided
they could be reinterviewed at the time of departure for overseas, if
insurance is provided for them here in the States, or at the time in the
combat area:,, or periodically.
Mr. EVEUETT. Wait just a minute right there. On that point,
what about a man in a training accident at Fort Berming, or Fort
Riley, or Fort Ord, or somewhere like that? If you say, "Well, there
is no use taking it out until you are going over there to be shot at,"
that man would be without insurance if he was killed in a training
accident in. the continental United States, wouldn't he?
Mr. JONES. Of course, if it weren't compulsory you always take the
chance that s. few men would not be covered with insurance at the time.
We had that in World War II. In my particular part of the Army,
we had to i tterview our soldiers at intervals as to NSLI, and had
almost a hundred percent coverage. But if this provision remains
as it is, then I would hope that the Department of Defense would
direct periodic reinterviews, either periodically or at other appro-
priate tames. or both; at least that much additional protection, if it
isn't going to be compulsory.
I think they would probably do it without statutory direction.
The other thing I would like to comment on is this. Our inclination
to support 3 our bill, Mr. Chairman, is based, I think, on two main
points. It vrould probably mean that there would be no restriction on
designation of beneficiaries as to individuals in contrast to corporate
beneficiaries and we think would make it more likely that you inigh.t
enact legislation to provide insurance, or make it available to men
Approved For Release 20031101M0'$ s PA=~t~ ~$f4~I 6V0V6fffi0005-9
 Those two things we strongly favor.
Mr. EvEiuirr. You mean to have the beneficiary anyone he wanted
to name?
Mr. JONES. Yes, as long as it is an individual, not a corporation.
Mr. SECREST. As I understand it, under this bill he can leave it to
his college, if he has no relatives, or build a monument.
Mr. Jo14Es. We are particularly concerned with individuals as
beneficiaries, not so much corporate beneficiaries.
Mr. EVERETT. Under the Talmadge bill he could not name any
beneficiary he wished; is that right?
Mr. STOVE H. That is tight. It was limited as to beneficiaries.
Mr. EVERETT. Yes. Take an example of a boy whose mother and
father were both dead and he was raised by an uncle, or aurit, or
someone like that. I know several instances down in my section of
the country where that happened. Go right ahead, Mr. Secrest.
Mr. JONES. That's all I had, Mr. Chairman. Thank you.
Mr. SECREST. I have nothing further.
Mr. EVLRETT. Mr. Brown?
Mr. BnowN. No questions.
Mr. EVERFTT. Mr. Teague?
Mr. TEAGUE of California. No questions.
Mr. EVERETT. We certainly appreciate the contribution that you
have made to this committee. I assure you we will certainly give it
every consideration in executive meeting.
Mr. Patterson, or Mr. Meadows?
Mr. SECREST. I might like to clarify just one thing. You expressed
no objection if it is compulsory?
Mr. STOVER. If the insurance is as proposed under Mr. Everett's
bill.
Mr. SECREST. Everyone in the armed services shall take this insur-
ance at 20 or 25 cents a month per thousand?
Mr. STOVER. We have nothing in our mandates that I know of that
we would oppose that.
(Mr. Stover's statement follows:)
STATEMENT Or FRANCIS W. STOVER, DIRECTOR, NATIONAL LEGISLATIVE SERVICE,
VETERANS Or FonnION WARS OF TILE UNITED STATES
Mr. Chairman and members of the subcommittee, thank you for this opportunity
to present the views of the 1,300,000 members of the Veterans of Foreign Wars of
the United States with respect to this most important legislation which will
benefit active duty personnel who are doing the fighting and dying in combat
zones all over the world.
My name is Francis W. Stover and my title is national legislative director.
Earlier this year the VFW supported S. 2127, when this bill was before the
Senate, which was in line with a resolution approved by our national convention
in 1964 at Cleveland, Ohio, The VFW has always strongly supported legislation
that veterans who served in combat zones for which a campaign badge or medal is
authorized should have that service elevated to wartime status for the purpose of
veterans benefits,
Since the Senate consideration of S. 2127, our position has expanded to support
full wartime veterans' benefits for all members of our armed services who serve
on active duty. Resolution No. 264, which was unanimously approved by the
delegates to the national convention of the Veterans of Foreign Wars of the
United States, which was held in Chicago, Ill., August 13 to 20, 1965, reads as
follows:
"Be it resolved, by the 66th National Convention of the Veterans of Foreign
Wars of the United States, that we f ully support full wartime veterans' rights and
 Approved For Release 2003/1
I1
q1&ENW1#7-OROTRStJFtAPLEOFi 1'iSZNT FIRMED FORCES
benefits fcr all members of our armed services who serve on active duty in our
protracted struggle against Communist aggression."
The Veterans of Foreign Wars favors full insurance protection for all members of
our Armed Forces who are serving on active duty. Legislation should not be
limited to present and future service but cover retroactive deaths since the end of
the Koreas war while on active duty. The VFW, therefore, recommends that
the delimii.hig date of January 31, 1955, be established for the purpose of deter-
dependency indemnity coverage for single men with nondependent parents.
Under the present law a parent, to be eligible for dependency and indemnity
eompeusat on, must meet a strict means lost before payment is made because of
the death of their child.
One of it e glaring defects of the Survivors Dependency and Indemnity Act was
its omissioa of any benefits to survivors of veterans beyond the immediate
dependents or next of kin. Thus, brothers and sisters and nondependent parents
are not eligible or entitled to any survivors' benefits under this net.
Where there is a survivor within the permitted class who is entitled to depend-
ency and indemnity payments is one thing. An intolerable situation and a harsh
result oceans for those who do not come within the limited class of beneficiaries
under this act.
With the death toll mounting in Vietnam, there will be more and more eases
where, a young man has been killed and leaves no beneficiaries who are eligible in
the present or foreseeable future for dependency and indemnity compensation
payments.
Insurance for the single serviceman is estremely urgent--especially where
private insurance is unobtainable. Rather than amend the. dependency and
indemnity componsation program, this insurance should be in addition. to any
benefits available under this highly successful program, which has been in opera-
tion since January 1, 1957. It should be available to all and, not limited to the
limited class of beneficiaries under the dependency and indemnity compensation
program.
The Veterans of Foreign Wars has also had brought to its attention a growing
number of complaints that commercial life insurance is either, not obtainable or
extremely dhfoult to obtain when the serviceman finds that lid is scheduled to be
shipped to a combat zone. The, primary purpose of Government life insurance
or indemnity insurance is to fill the void caused by the unavailability of commercial
insurance. ;his was the theory of USGLI when Congress authorized Government
life insurance for servicemen of World War I and NSLI in 1940.
The VFW Sas noted 11,11, 10873, introduced by the distinguished chairman of
this subcommittee. ll.R. 10873 may be the alternative to free indemnity insur-
anee and has the support of the VFW as a substitute to S. 2127 and similar bills.
1I.R. 108Th would provide special insurance similar to group life insurance by
the payment of a small premium by the serviceman. Such insurance would pro-
vide in some manner benefits to the fathers and mothers who have given their son
but who are ratable to qualify under the Survivors Dependency and Indemnity
Act. The so -viceman could continue this insurance after discharge, a most
desirable feature.
It should be pointed out that $10,000 is not the same p7rotection its was provided
on October 8, ] 940, when the NSLI Act went into effect; $20,000 is a more equitable
amount and reflects the increased cost of livingg~ in the past 25 years.
The basic underlying reason then for the Government to grant this insurance
is because insurance is unavailable to those citizens who are risking their livcre.
daily in areas similar or identical to wartime situations. If it is the policy of this
Government to draft young men, then it follows there is an obligfption on the part
of his Governrlent to pay or indemnify someone when that young man loses his
life in carrying out the commitments of this Government,
The Veterans of Foreign Wars endorses legislation to providd adequate insur-
ance coverage 'or cold war servicemen as provided in our Cariozo mandate II.14.
244 attached. II.R. 10873 appears to tic a very satisfactory: solution for all
concerned-tlk serviceman, the Government, and the private life insurance
industry. We insist on the VA administering the program-any insurance
program for veterans.
Thank you fcr this opportunity to present the views of the Veterans of Foreign,
Wars with respect to this most ugrently needed and meritorious legislation.
It will be deeply appreciated if copies of our 66th national convention Resolutions
Nos. 5, 244, and 264 are made a part of my remarks and a part of the hearing
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 INDEMNITY OR INSURANCE FOR TIIE ARMED FORCES 2869
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
record. It is those resolutions endorsed by the delegates representing 1,300,000
members that authorize our support for this insurance protection for cold-war
veterans.
RESOLUTION No. 5. VETERANS GOVERNMENT INSURANCE PROGRAM
Be it resolved, by the 66th National Convention of the Veterans of Foreign Wars
of the United States, That we seek approval of the. following recommendations by
administrative changes or legislation, as applicable:
1. Reopen national service life insurance program to those, veterans who served
in the Armed Forces during the period of October 8, 1940, and December 31,
1956, inclusive.
2. Authorization of waiver of service-connected disabilities for the purpose of
reinstating "II", 111111111 "J", or "JR policies (the service-connected disability
permitted veterans to obtain the insurance initially).
3. Authorization to waive service-connected disabilities to permit granting of
the total disability income provisions on national service life insurance policies.
4. Amendment to section 712, title 38, United States Code, to change the 1-year
limit in which to file claim for waiver of premiums for total disability to 3 years.
5. Authorize the Board of Veterans' Appeals to review all decisions affecting
rights under the Government insurance program.
6. Authorize $10,000 gratuitous insurance to members of the Armed Forces
who are required to engage in combat or extrahazardous duty.
7. Authorize granting of insurance under Public Law 88-664 to eligible persons
on active duty.
Adopted at the 66th National Convention of the Veterans of Foreign Wars
of the United States held at Chicago, Ill., August 13 through August 20, 1965.
RESOLUTION No. 244. To REENACT INSURANCE PROTECTION GRANTED UNDER.
TIIE SERVICEMEN'S INDEMNITY ACT OF 1951 (PUBLIC LAW 23, 82D CONG.)
Whereas under date of November 8, 1961, 77 recruits inducted into the U.S..
Army were killed in an airplane crash, near Richmond, Va.; during April 1963,
129 Servicemen died on the U.S.S. Thresher; and
Whereas under current laws they were not protected by Government insurances
and
Whereas national service Igo insurance coverage was available to all eligible
servicemen through April 24, 1951. After that date persons entering the service
were automatically extended protection Under the Servicemen's Indemnity Act of
1951 (Public Law 23, 82d Cong.) lit the event of the serviceman's death while
in the active service or within 120 days following his release from service, pay-
ments of up to $92 per month for 10 years were paid to a widow or child, or
parents or brothers or sisters of the deceased. Due to the spread out payments,
on which interest at 2% percent a year was paid, the total amount )aid was up
to $11,148. The Servicemen's and Veterans Survivor Benefits Act (Public Ig'w
881, 84th Cong.) repealed the Servicemen's Indemnity Act of 1951 effective
January 1, 1957, thereby terminating the automatic indemnity provided for per-
sons in the active service and after June 27, 1050,.and prior to January 1, 1957.
To replace the servicemon's indemnity (so-zalled $10,000 "free iiisdrance") the
act provided a new form of death compensation designated in the law as
"dependency and indemnity compensatior," and extended coverage under the
social security system to military personnel on a contributory basis. Dependency
and indemnity compensation, became payable by the Veterans' Administration
to widows, children, and dependent parents of persons who died from service-
connected causes generally on or after January 1, 1957, Servicemen who were
released from service had 120 days or through December 31, 1966, if discharged
within 120 days of that data to apply for national service life insurance under
Public Law 23, 82d Congress; and
Whereas Public Law 88-604 does not afford protection for persons in service
and hostile countries: Now, therefore, be it
Resolved by the 66th National Convention of the Veterans of Foreign Wars of the
United States, That we Book legislation to reenact a genuine insurance protection
program to ever retroactively all inservice deaths of those who are uninsured.
Adopted at the 66th National Convention of the Veterans of Foreign Wars of
the United States held at Chicago, Ill., August 13 through August 20, 1965.
 Approved For ReleaseZD03/JqW T IAf~ 2 b/ 66E4F6 06 06 $O o cEs
REBOLU'TION No. 264, WARTIME BENEFITS
Whereas the President of the United States has solemnly proclaimed "this is
war"; and
Whereas our Armed Forces are being greatly increased in size, which has
reppUted in a large increase in the draft; and
Whereas our troops in South Vietnam are suffering death and wounds and ex-
posure to the other hazards of war; and
Whereas U.S. fighting men have been (lying in Santo Domingo; and
Whereas our fighting men in the United States and throughout the world are
manning the ramparts of freedom against Communist aggression which is based
upon a global strategy; and I
Whereas the war against Communist aggression must continue to be' fought
on,a worldwide basis wita our Armed Forces ready for combat wherever they may
beastationcd throughout the world; and
Whereas our servicemen who are so engaged in the defense of the United States
.and the free world are lot hesitating to make the supreme sacrifice because the
United States is net technically at war with the forces of aggression; and 1
Whereas it is unfair to deprive our fighting men of wartime benefits in the war
they are now fighting msroly because of the absence of a technical declaration of
war: Now, therefore, be it
Resolved by the 66th National Convention of the I eterans of Foreign Wars of the
United States, That we fully support full wartime veterans' rights and benefits
for all members of our a'med services who serve on active duty in our protracted
.struggle against Communist aggression.
Adopted at the 66th National Convention of the Veterans of Foreign Wars
of the United States hold at Chicago, Ill., August 13 through August 20, 1965.
Mr. EVERETT. Without objection, I will place in the record a copy
.of -a statement of our colleague, the Honorable Charles S. Joelson, of
New Jersey, relating: to this matter.
(The statement of Mr. Joelson follows:)
HOUSE OF REPRESENTATIVESI,
Washington, D.C., September 8, '1965.
II6n. OLIN E. TEAGUE,
-Chairman, Veterans' Aft airs Committee,
-Cdnnon House Office Building.
DEAR MR. CHAIRMAN: I enclose a statement which I would appreciate, having
included in the record o1' the hearings on bills to provide life insurance protection
for members of the armed services.
Sincerely,
CHARLES S. JOLmsor
Illember of Congress.
A STATEMENT IN SUPPORT OF II.R. 10272 AND H.U. 12073, To PROVIRe LIFE
INSURANCE PROTECTIJN FOR CERTAIN MEMBERS OF TILE ARMED SERVICES
Mr. Chairman and members of the committee, I thank you for this opportunity
to appear before you ar d discuss my two bills, H.R. 12072 and II.R. 10273. I
"introduced these two bills, because they will help correct a serious inequity
affecting some members of our Armed Forces. The Armed Forces personnel who
would be affected by these bills are performing a dedicated and remarkable service
for their country, but chile so doing, they have become ineligible for normal
insurance coverage that is available for the average American. It is an obligation
and a responsibility of )ur Federal Government to rectify this inequity. I am
sure that the American people support any action that would alleviate this
injustice.
My hill, TI.R. 10272, proposes to amend title 38 of the United States Code so
as!to provide a program- of insurance for members of the Armed Forces who are
unable to obtain commercial insurance at standard rates, because of their being
assigned to duty in a combat zone or performing extrahazardous duty. This
bill would authorize such members of the Armed Forces to acquire Government
insurance on the same standard terms as those of the national service life. insurance.
The provisions of this bill would be applicable only to those members of the
Armed Forces that are enable to obtain commercial life insurance at a standard
rate. We are not brining the Government into competition with commercial
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2871
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
insurance companies by authorizing this special insurance. In fact, in many
cases, commercial companies will not write insurance for these personnel covering
all contingencies; and oven in those cases that they will write policies, the pre-
miums are much higher than standard rates. Thus, what this amendment proposes
to do is to provide insurance for those members of the Armed Forces who are
performing duties in the service of our country that render them ineligible for
standard commercial insurance coverage
Second, my bill, If.R. 10273, proposes to amend title 38 of the United States
Code to provide a program of death indemnification for persons serving in combat
zones, The amendment defines "combat zones" to mean any area determined
by the President to be an area in which units of the Armed Forces of the United
States are engaged in combat operations on or after the date of enactment of this
amendment. The countries of Laos, Cambodia, and Vietnam are specifically
included within the definition of a combat zone until the President should doter-
mine that such countries are no longer combat zones.
The proposed amendment would automatically insure each member of the,
Armed Forces on active duty in a combat zone against death, while on active
duty in a combat zone and for 120 days thereafter. Insurance would be without
cost to the members of the Armed Forces on such duty. The insurance provided
by this amendment would be in the amount of $10,000, reduced by the amount
of U.S. Government life insurance, national service life insurance, and commercial
life insurance held by the insured and in force at the time of his death. Therefore,
this amendment proposes to provide up to $10,000 of Government insurance to
the beneficiaries of those members of the Armed Forces killed while on duty in
combat zones.
Furthermore, in those cases where members of the Armed Forces in a combat
zone have national service life insurance or U.S.,Government life insurance, this
amendment provides for a waiver of premium on these insurance policies for the
period of combat duty and 120 days thereafter; that is, all premiums on the na-
tional service life 5-year level premium term insurance would be waived and the
portion of premiums on all other forms of insurance which represents the, pure
insurance risk would be waived.
I fool sure that my concern for members of the Armed Forces of the United
States assigned to duty in it combat zone is shared by all patriotic Americans.
We must not add to the worries of our personnel assigned to combat duty, the
additional worry of the economic security of their families in the event of death.
To help relieve them of this worry is the least we can do.
Today, we have soldiers, sailors, marines, and airmen fighting in the jungles
of Vietnam. These individuals arc gallantly making sacrifices for their country
as generations have before them'. We ask members of our Armed Forces to
fight for the cause of freedom anywhere in the world. And those fighting today
are entitled to no less security than we provided the men who fought in World
War II or in Korea.
Almost daily we hear of additional Americans- who have paid the supreme
sacrifice in an effort to uphold our beliefs in freedom and democratic government.
And, although the fighting in Vietnam is not a declared war, it is nonetheless
bloody and accompanied by death. We have an increasing number of American
servicemen who are daily risking their lives in this struggle in southeast Asia.
We ask so much of them, and they respond. Certainly they are entitled to ask
of us that we make sure their loved ones are provided with some economic so-
curity in the. event of their death.
Senate bill 2127 which has passed the U.S. Senate seeks to establish a special
indemnity insurance for personnel serving in combat zones and addresses much
the same problems as my bill; II.R. 10273. In the Senate Report No. 619 ex-
plaining S. 2127, the following statement is made relative to the availability of
commercial insurance:
w "Representatives of the American Life Convention and Life Insurance Asso-
oiation of America submitted very significant testimony at the hearings on this
bill. They admitted that because of the conditions in Vietnam a number of life
insurance. companies have concluded that they will no longer write insurance on
a serviceman already in a combat zone or alerted to move to one. Other com-
panies have taken the position that they will write such insurance only with a war
exclusion clause. Out. of 330 companies who are members of the insurance asso-
ciations represented by the witnesses, the committee was able to learn of only
two, or three at the most, which are continuing to write policies without it war
exclusion Clause if the soldier is alerted, on his way to, or in a combat zone. Even
in these cases there is generally a maximum placed on the amount of insurance
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 App ovef] Foy'We?eas"e i&bdit 64 F8YArffbP*ft4 4 0500210005-9
they will issue and, further, it appears that such companies will continue to write
such insurance only as long as they receive relatively few applications for it. It
was readily apparent to the committee, therefo-e, that thousands of young men
who are being called to service as it result of the current planned buildup of our
forces have great difficulty, and in many ease, are unable to secure adequate
insurance protection for their families."
I think the above information amply illustrates the necessity for the Congress
of the United States to take action to relieve ;his hardship and injustice. No
matter whether we term this a "cold war" or it "hot war," the loss of life has the
same injurious effect on families directly concerned. Today, we are enjoying a
prosperity unparalleled in the history of mankin1. Frankly, we must admit that
a great deal of this prosperity is attributable to those who have sacrificed their
lives for the cause of freedom. These sacrifices are as groat today as ever before.
And, our country's future;is largely dependent upon the sacrifices of its citizens
today.
I feel confident that the American people are enxious to provide this indemnity
protection for the families of those who are killed in combat, and also to provide
an equitable insurance protection for those win, are involved in extrahazardous
duties, and who cannot obtain commercial inst runce at standard rates. I sin-
cerely believe that favorable congressional action on these proposed amendments
would bolster the morale of our Armed Forces psrsonnel.
Mr. EVERETT. The subcommittee has received a statement from
Mr. Charles L. Huber!of Disabled American Veterans, which will be
placed in the record atthis point if there is no objection.
STATEMENT OF CnARLES. L. HUBER, NATIONAL DIRECTOR OF LEOIsLATION,
DISABLED AMERICAN V1:TERANs
Mr. Chairman and members of the committee, the Disabled American Veterans
deeply appreciates the opportunity given as to i,ppear before you to express our
views in connection with the insurance bills under consideration.
At the outset, we wish to reemphasize that the membership of the Disabled
American Veterans is comprised of veterans who nerved honorably during a period
of war and who were wounded, injured, or othe;-wise disabled by reason of such
service. Included in the term "during a period of war" are veterans whose
wounds, injuries, or diseases were incurred as a uesult of armed conflict, or while
engaged in extrahazardous, duty, including service under conditions simulating
war. i
We recognize, Mr. Chairman, that you and the subcommittee members are
making a sincere and honest effort to resolve the insurance problems of young
people entering our Armed: Forces in this time of crises. We realize that there
may arise, during the period of these hearings, some differences of opinion as to
the best course to follow, the exact type of legislition which would he most help-
ful; but there should be no difference of opinion as to the fact that there is a definite
need for legislative action.
The Disabled American Veterans advocates tie adoption of a program which
would provide for life insurance or indemnity payments for the survivors of per-
sons who die as a result of disease or injury inem red in the armed services of the
United States. In view of the current emergenep situation, and particularly the
hostilities now underway in Vietnam, favorable a onsideration by this committee
and the Congress of such a B. insurance program is, we think, a matter of special
importance.
The basis of our policy in this connection is expressed in a resolution which
was approved by the Disabled American Veterans national convention held
August 1-7, 1965, at New Orleans, La. In essence, the resolution declares that
the Disabled American Veterans shall go on retie?d recommending that members
of the Armed Forces serving in combat areas be given an opportunity to obtain
insurance similar to that accorded members of the Armed Forces of World War
II and/or the Korean conflict.
Under terms of this resolution, the DAV National Legislative Service is auth-
orized to propose or su port either a program of insurance coverage similar to
that provided World War TI servicemen under tree National Service Life Insur-
ance Act of 1940, or servicemen's indemnity authorized under Public Law 23,
Std Congress, enacted April' 25, 1951.
There is a variety of bills under consideration pe?taining to automatic gratuitous
indemnity insurance. Such a bill is one recently passed b the Senate i e
t t e Ser9lDndnu{A12n%eB1~U14AfL@~k1210005-9
P~fra`?de lay%c~rn~eleatt41
 INDEMNITY OR INSURANCE FOR THE ARMED FORCES 2873
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
provide $10,000 gratuitous insurance for any person on active duty in the Armed
Forces while serving in a combat zone. It would further provide that such
person shall be deemed to have been serving in a combat zone at time of his death
if he dies outside of a combat zone and (1) his death is determined by the Admin-
istrator to have been the direct result of an injury or disease incurred while
serving in the combat zone, and (2) the injury or disease from which such person
died was incurred not more than 2 years prior to death. Combat zones are to
be determined by Presidential proclamation. The indemnity would be payable
in 120 equal monthly installments to the surviving spouse, child or children,
parents, or brothers and sisters of the insured.
In our testimony before the Senate committee we expressed agreement with
the basic purposes and results S. 2127 socks to achieve. The bill contains a
provision relating to beneficiary designations which is commendable to the DAV.
The, presently existing Survivors Dependency and Indemnity Act has an extremely
rigid limitation with respect to parents. We are, pleased indeed that no "heed
clause" has been incorporated in the bill. We saw also in this bill a means of
filling the gap of insurance., needs for our men in. the Armed Forces who are finding
it increasingly difficult to obtain insurance through private companies. This is a
fact which was made clear in recent testimony before your subcommittee by a
representative of the private insurance industry when he said "because of the
conditions in Vietnam a majority of the life insurance companies have concluded
that they will no longer write insurance on a serviceman already in a combat zone
or alerted to move to one, or will write such insurance only with a war exclusion
clause."
The DAV supported enactment of the bill for the reason that we felt it had a
substantial degree of merit, and for the further reason that its provisions fell
within the general scope of our national convention resolution. However, we
also felt that certain of its features were too restrictive and required additional
study and adjustment. For example, one of the requirements for eligibility
under the bill is that the serviceman must have died as a direct result of an
injury or disease. This "direct result" requirement is not only vague and difficult
to interpret, but it also places a severe limitation upon those potentially eligible.
In many instances a disease or injury is a definite contributory factor leading to
death, and yet in itself is not the primary or direct cause of death.
It was our recommendation that any injury or disease which caused or "con-
tributed" to a serviceman's death be considered sufficient for eligibility purposes if
such injury or disease was incurred in line of duty in a combat zone.
Another item which we brought to attention is the limitation in connection with
combat zones as determined specifically by, the President of the United States.
Members of the Armed Forces who have died in Lebanon, the Dominican Repub-
lic, and possibly many other places in the past and in the future may not be
entitled to the indemnity insurance protection unless a specific declaration is
made. The DAV recommended that this item be broadened to include all areas
where our servicemen were, or will be, involved in extrahazardous duty. We
also addressed attention to the provision in the bill which stipulates that the
disease or injury from which a serviceman dies must be incurred not more than
2 years prior to his death.
As an organization handling many hundreds of thousands of compensation
claims, we found this provision hard to accept. There have been countless cases
where a veteran has suffered a severe injury or disease and has lingered on for
many years prior to death. We are sure that the records of the Veterans' Ad-
ministration will bear this out in the continuing payments to widows and other
dependents of death benefits based upon disability or disease incurred in service.
We therefore recommended that the limitation be extended beyond the, 2-year
period.
Mr. Chairman, several of the insurance bills pending before your subcommittee
contain indemnity features somewhat similar to those offered in S. 2127. The
DAN national convention insurance resolution is broad enough to admit of
many possibilities; and hence we are able to support II.R. 4379 and similar bills
which authorize $10,000 automatic free insurance protection for members of the
Armed Forces serving outside the United States. However, the insurance
coverage under terms of these bills would be prospective inasmuch as such cover-
age would commence after the date of enactment.
Reports indicate that more than 700 members of the Armed Forces have already
been killed in Vietnam and other areas of hostilities. We feel it only fair that
the indemnity coverage should be extended to include the survivors of these
deceased servicemen. ,I~ 1
Appr tV41 t ft 1**440 nfdf ~b4fltl AV4)05-9
 Approved For Releas 200 /11/04: C1AlRDP67B00446R000 00 12 0005 OR THE ARMED FORCES
pri rate insurance companies for members of the uniformed services who are on
act ve duty.
Essentially, the bill authorizes the VA Administrator to purchase from one or
mope commercial life insurance companies a group life insurance policy which
wil automatically insure any serviceman on active duty against death in the
amount of $10,000, unless such serviceman elects in writing (1.) not to be insured,
or i 2) to be insured for less than $10,000 but not less than $1,000.
The uniform premium would be deducted from the pay of those covered. The
Go iermnent would contribute any amount necessary to cover the excess premium
cos; due to the extra hazards of military service. The group life insurance pro-
teo.ion would cease 120 days after separation from active service. The veteran
may, however, convert his group insurance without physical examination to a
plat written by it commercial company participating in the program. This
conversion clause would apply also to the serviceman who has incurred a service-
connected disability that rendered him commercially uninsurable at standard
rates.
ELIt. 10373 and the other bills mentioned earlier all offer solutions to the
1c currently being inducted into the, U.S. Armed Forces.
people
'ns t ran eL problems of coIr t P
I
If it is the decision of the subcommittee that the group inauranoo proposal em-
~~
bra.,ed in IL IL. 10873 represents the most desirable approach for resolving the
insurance needs of members .of the Armed Forces, and should the subcommittee
decide to favorably report the measure, we would respectfully ask that the follow.
ing amendment be given thoughtful consideration:
"Any serviceman who has died as a result of an injury or disease incurred
while serving in a combat zone, and where such death occurred prior to date of
enactment of this chapter, shall be deemed to have applied for and to have been
t
gra ited such insurance its of s the (late of death, in an amount which, together with
any other U.S. Government life insurance or -natioinal service life insurance in
force, shall aggregate $10,000. The insurance shall be paid from Federal appro
prittions.,,
This proposed amendment would serve to fulfill the Government's firm obliga-
our country's Ireedom.
I a conclusion I wish again to thank the subcommittee for affording this oppor-
tunity to the Disabled American Veterans to submit its views on this crucial
subject.
]vIr. EVERETT. Without objection, any additional material pertinent.
to this subject which may be received by the subcommittee will be
ins3rted at this point in the record.
(The following telegram was subsequently received:)
Chairman, House Veterans Affairs Subcommittee on Insurance,
Cannon House Office Building, Washington, D.C.: -
In testifying on behalf of our association before your subcommittee on Sep
ten.ber 8, Carlyle M. Dunaway stated that we would no longer object to service.
men's indemnity bill S. 2127 provided that it was ameo.ded in certain particulars,
but that we would be opposed to the enactment of servicemen's group life insur-
ance bill 11.11. 10873. Since that time, our board of trustees has learned that
I[.It. 10873 will be amended to permit a covered serviceman, upon discharge, to
eonverrt his group coverage in any company wishing to make itself available for
the conversion of such coverage, whether or not it was it participant in the group.
program. Of even more importance, our board is now convinced that the
enactment of S. 2127 would tend to lead to a general reopening of the national
ser"iec life insurance program. In these circumstances, we wish to advise your
subcommittee that we are withdrawing our opposition. to 11.11, . 10873, provided
that it is amended in the manner indicated above.
WILLIAM 11. GATLINO-,
President, the National Association of Lite Underwriters.
]vlr. E, vERETT. Does any other member of the audience have any
statement he wants to make?
The hearing is closed.
i Whereupon, at 10:40 a.m., the hearing wan; closed.)
Approved For Release 2003/11/04: CIA-RDP67B00446R0005002100005-9
 Approved For Release 2003/11/04: Cl*- nit4pI br1hh&MESENTATIVES ( REPORT
s easaon j No. 1003
GROUP LIFE INSURANCE FOR THE UNIFORMED
SERVICES
SEPTEMBER 15, 1965.-Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
Mr. TEAGUE of Texas, from the Committee on Veterans' Affairs,
submitted the following
The Committee on Veterans' Affairs, to whom was referred the bill
(H.R. 10873) to amend title 38 of the United States Code to establish
a program of group life insurance which shall be provided by private
insurance companies for members of the uniformed services who are
on active duty, having considered the same, report favorably thereon
with an amendment and recommend that the bill as amended do
pass.
The amendment is as follows:
Strike out all after the enacting clause and insert the following:
That (a) chapter 19 of title 38, United States Code, is amended by redesignating
"Subchapter III-General" thereof as "Subchapter IV-General" and by inserting
immediately after subchapter II thereof the following new subchapter III:
"Subchapter III-Servicemen's Group Life Insurance
"? 765. Definitions
For the purpose of this subchapter-
"(1) The term 'active duty' means full-time duty as a commissioned or
warrant officer, or as an enlisted member of a uniformed service under a call
or order to duty that does not specify a period of thirty days or less.
"(2) The term 'member' means a person on active duty in the uniformed
services in a commissioned, warrant, or enlisted rank or grade.
"(3) The term 'uniformed services' means the Army, Navy, Air Force,
Marine Corps, Coast Guard, Public Health Service, and Environmental
Science Services Administration.
766. Eligible insurance companies
"(a) The Administrator is authorized, without regard to section 3709 of the
Revised Statutes, as amended (41 U.S.C. 5), to purchase from one or more life
insurance companies a policy or policies of group life insurance to provide the
benefits specified in this subchapter. Each such life insurance company must
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 App?bved KdIWWsWM6a /d~HdW th d4 PW6$600210005-9
(1) be licensed to issue life insurance in each of the fifty States of the United States
and in the District of Columbia, and (2) as of the most recent December 31 for
which information is available to the Administrator, have in effect at least 1 per
centum of the total amount of group life insurance which all life insurance com-
panies have in effect in the United States.
"(b) The life insurance company or companies issuing such policy or policies
shall establish an administrative office at a place and under a name designated
by, the Administrator.
(c) The Administrator shall arrange wi ;h the life insurance company or
companies issuing any policy or policies under this subchapter to reinsure, under
conditions approved by him, portions of the total amount of insurance under
such policy or policies with such other life insurance companies (which meet
qualifying criteria set forth by the Administrator) as may elect to participate in
such reinsurance.
"(d) The Administrator may at any time discontinue any policy or policies
which he has purchasedlfromany insurance company under this subchapter.
767. Persons insured; amount
"(a) Any policy of insurance purchased by the Administrator under section
766 of this title shall automatically insure any member of the uniformed services
on active duty against death in the amount of $10,000 from the first day of such
duty, or from the date certified by the Admir dstrator to the Secretary concerned
as the date Servicemen's Group Life Insurance under this subchapter takes effect,
whichever date is the later date, unless such member elects in writing (1) not to
be insured under this subchapter, or (2) to be insured in the amount of $5,000.
"(b) If any member elects not to be insured under this subchapter or to be
insured in the amount of $5,000, he may thereafter be insured under this sub-
chapter or insured in the amount of $10,000 under this subchapter, as the case
may be, upon written application, proof of;ood health, and compliance with
such other terms and conditions as may be prescribed by the Administrator.
768. Termination of coverage; conversion
"Each policy purchased under this subchapter shall contain a provision, in
terms approved by the Administrator, to the effect that any insurance thereunder
on any member of the uniformed services shall pease (except in the case of members
absent without leave) one hundred and twenty days after his separation or release
from active duty, and that during the period such insurance is in force the insured
upon request to the administrative office established under subsection 766(b) of
this title shall be furnished a list of life insurance companies participating in the
program established under. this subchapter and upon written application (within
such period) to the participating company selected by the insured and payment of
the required premiums be granted insurance without a medical examination on a
plan then currently written by such company which does not provide for the pay-
ment of any sum less than the face value thereof or for the payment of an addi-
tional amount as premiums if the insured engages in the military service of the
United States, to replace the Servicemen's Group Life Insurance in effect on the
insured's life under this subchapter. In adc ition to life insurance companies
participating in the program established under this subchapter, such list shall
include additional life insurance companies (not so participating) which meet
qualifying criteria, terms, and conditions established by the Administrator and
agree to sell insurance to members and forme;- members in accordance with the
provisions of the preceding sentence. In the case of any member who is absent
without leave for a period of more than thir y-one days, insurance under this
subchapter shall cease as of the date such absonre commenced. Any such member
so absent without leave,upon return to duty, may again be insured under this
subchapter, but only if he complies with the requirements set forth in section
767(b) of this section.
769. Deductions; investment; expenses
"(a) During any period in which a member is insured under a policy of insurance
purchased by the Administrator, under section 766 of this title, there shall be
deducted each month from his basic or other p,ty until separation or release from
active duty, an amount determined by the Administrator (which shall be the same
for all such members) as the share of the cost attributable to insuring such member
under such policy, less any costs traceable to the extra hazard of active duty in
the uniformed service. Any amount not deducted from the basic or other pay of
a member insured under' this subchapter while on active duty, if not otherwise
ApIh?'ft~l l n fl aso ~ ~y f Q 4##WOVJj0005-9
 Approved For4R@-L ?#[e-mail]- VAM8*M88888A210008-9
this subsection for insurance under this subchapter may be continued from year
to year, except that the Administrator may redetermine such monthly amount
from time to time in accordance with experience. No refunds will be made to
any member of any such amount properly deducted from: his basic or other pay
to cover the insurance granted under this subchapter.
"(b) For each month for which any member is so insured, there shall be con-
tributed from the appropriation made for his pay an amount determined by the
Administrator and certified to the Secretary concerned to be the cost of such
insurance which is traceable to the extra hazard of active duty in the uniformed
services. Such cost shall be determined by the Administrator on the basis of the
excess mortality suffered by members and former members of the uniformed
services insured under this subchapter above that incurred by the male civilian
population of the United States of the same age as the median age of members
of the uniformed services (disregarding a fraction of a year) as shown by the records
of the uniformed services, the primary insurer or insurers, and the Department
of Health, Education, and Welfare, together with the most current estimates of
such mortality. , The Administrator is authorized to make such adjustments
regarding such contributions from pay appropriations as may be indicated from
actual experience.
"(c) An amount equal to the first amount due on any such insurance may be
advanced from current appropriations for active-service pay to any such member,
which amount shall constitute a lien upon any service or other pay accruing to
the person from whom such advance was made and shall be collected therefrom
if not otherwise paid. No disbursing or certifying officer shall be responsible for
any loss incurred by reason of such advance.
"(d)(1) The sums withhold from the basic or other pay of members under
subsection (a) of this section, and the sums contributed from appropriations
under subsection (b) of this section, together with the income derived from any
dividends or premium rate adjustments received from insurers shall be deposited
to the credit of a revolving fund established in the Treasury of the United States.
All premium payments and extra hazard costs on any insurance policy or policies
purchased under section 766 of this title and the administrative cost to the
Veterans' Administration of insurance issued under this subchapter shall be paid
from the revolving fund.
"(2) The Administrator is authorized to set aside out of the revolving fund
such amounts as may be required to meet the administrative costs to the Veterans'
Administration of insurance issued under this subchapter and all current premium
payments and extra hazard costs on any insurance policy or policies purchased
under section 766 of this title. The Secretary of the Treasury is authorized to
invest in and to sell and retire special interest-bearing obligations of the United
States for the account of the revolving fund. Such obligations issued for this
purpose shall have maturities fixed with due regard for the needs of the fund and
shall bear interest at a rate equal to the average market yield (computed by
the Secretary of the Treasury on the basis of market quotations as of the end of
the calendar month next preceding the date of issue) on all marketable interest-
bearing obligations of the United States then forming a part of the public debt
which are not due or callable until after the expiration of four years from the end
of such calendar month; except that where such average market yield is not a
multiple of one-eighth of 1 per centum, the rate of interest of such obligation shall
be the multiple of one-eighth of 1 per centum nearest such market yield.
"(3) Notwithstanding the provisions of section 782 of this title, the Adminis-
trator shall, from time to time, determine the administrative costs to the Veterans'
Administration which in his judgment are properly allocable to insurance issued
under this subchapter and shall transfer such cost from the revolving fund to the
appropriation 'General operating expenses, Veterans' Administration'.
"(a) Any amount of insurance under this subchapter in force on any member
or former member on the date of his death shall be paid, upon the establishment
of a valid claim therefor, to the person or persons surviving at the date of his
death, in the following order of precedence:
"First, to the beneficiary or beneficiaries as the member or former member may
have designated by a writing received in the uniformed services prior to such
death;
"Second, if there be no such beneficiary, to the widow or widower of such
member or former member;
"Third, if none of the above to the child or children of such memo r rlf r e
Appro l iiaR>rle~awd,20O~r/WidE~edC1*1RDP&ThGO446R000 0021..0005-9
 Approved For Release 2003/11/04z[ CIA- ee7BM446fKK 16O00110IIW9NIFORtdEn SERVICES
"Fourth, if none of the above, to the parents of such member or former member
or the survivor of them;
"Fifth, if none of the above, to the duly appointed executor or administrator
of the ,state of such member or former member;
"Sixth, if none of the above, to other next of kin of such member or former
member entitled under the laws of domicile of such member or former member
at the time of his death.
"(b) If any person otherwise entitled to payment under this section does not
make claim therefor within one year after the death of the member or former
member, or if payment to such person within that period is prohibited by Federal
statute or regulation, payment may be made in the order of precedence as if such
person had predeceased the member or former member, and any such payment
shall b: a bar to recovery by any other person.
"(c) If, within two years after the death of the member or former member,
no clam for payment has been filed by any person entitled under the order of
preced -nee set forth in this section, and neither the Administrator nor the adminis-
trativcoffice established by the insurance company or companies pursuant to
section 766(b) of this title has received any notice that any such claim will be
made, payment may he made to a claimant as may in the judgment of the Admin-
istrator be equitably entitled thereto, and such payment shall be a bar to recovery
by any other person. If, within four years after the death of the member or
former member, payment has not been made pursuant to this section and no
claim for payment by any person entitled under this section is pending, the
amount payable shall escheat to the credit of the revolving fund referred to in
section 769(d).
"(d) The member may elect settlement of insurance under this subchapter
either in a lump sum or in 36 equal monthly installments. If no such election is
made goy the member the beneficiary or beneficiaries may elect settlement either
in a lump sum or in 36 equal monthly installments. If the member has elected
settlement in a lump slim, the beneficiary or beneficiaries may elect settlement
in 36 cqual monthly installments.
"? 771. Basic tables of premiums; readjustment of rates
"(a) Each policy or policies purchased tinder section 766 of this title shall
include for the first policy year a schedule of basic premium rates by age which the
Admit istrator shall have determined on a basis consistent with the lowest schedule
of basic premium rates generally charged for new group life insurance policies
issuod to large employers, this schedule of basic premium rates by age to be
applied, except its otherwise provided in this section, to the distribution by age of
the amount of group life insurance under the policy at its date of issue to determine
an average basic premium per $1,000 of insurance. Each policy so purchased
shall Else include provisions whereby the basic rates of premiuun determined for
the first policy year shall be continued for subsequent policy years, except that
they rray be readjusted for any subsequent year, based on the experience under
the policy, such readjustment to be made by the insmrai ce company or companies
issuing the policy on a basis determined by the Administrator in advance of such
year to be consistent with the general practice of life hlsurance companies tinder
policies of group life insurance issued to large employers.
"(b? The, total premiums for the policy or policies' shall be the, sum of the
amounts computed according to the provisions of subsection (a) above and the
estime.ted costs traceable to the extra hazard of active duty in the uniformed
services as determined by the Administrator, subject to the provision that such
estimated costs traceable to the extra hazard shall be retroactively readjusted
annually in accordance with section 769(b).
"(c' Each policy so purchased shall include a provision that, in the event the
Administrator determines that ascertaining the actual age distribution of the
amounts of group life insurance in force at the date of issue of the policy or at
the erd of the first or any subsequent year of insurance thereunder would not be
possitic except at a disproportionately high expense; the Administrator may
approve the determination of a tentative average group life premium, for the
first Cr any subsequent policy year, in lieu of using the actual age distribution.
Such tentative average premium rate shall be redetermined by the Administrator
durin r any Policy veer upon request by the insurance company or companies
issuing the policy, if experience indicates that the assumptions made in determin-
tcnativn average premium rate for that policy year were incorrect.
i
tI
ng
e
e r, which charges shall have been
Approved For Release 2003/11/04 :i nRD 6679E "0014 9- n=islet t with the general level
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
GROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES 5
of such charges made by life insurance companies under polities of group life
insurance issued to large employers. Such maximum charges shall be continued
from year to year, except that the Administrator may redetermine such maximum
charges for any year either by agreement with the insurance company or com
panics issuing the, policy or upon written notice given by the Administrator to
such companies at least one year in advance of the beginning of the year for which
sttnh redetermined maximum charges will be effective.
"(e) Each such policy shall provide. for an accounting to the Administrator
not later than ninety days after the end of each policy year, which shall set forth,
in a form approved by the Administrator, (1) the. amounts of premiums actually
accrued under the policy from its date of issue to the end of such policy year,
(2) the total of all mortality and other claim charges incurred for that period,
and (3) the amounts of the insurers' expense and risk charge for that period.
Any excess of the total of item (1) over the sum of items (2) and (3) shall be held
by the insurance company or companies issuing the policy as a special contingency
reserve to be used by such insurance, company or companies for charges under
such policy only, such reserve to boar interest at a rate to be determined in
advance of each policy year by the insurance company or companies issuing the
policy, which rate shall be approved by the Administrator as being consistent
with the rates generally used by such company or companies for similar funds held
under other group life insurance policies. If and when the Administrator doter-
rnines that such special contingency reserve has attained an amount estimated
by the Administrator to make satisfactory provision for adverse fluctuations in
future charges under the policy, any further excess shall be deposited to the credit
of the revolving fund established under section 766 of this title. If and when
such policy is discontinued, and if after all charges have been made., there is any
positive balance remaining in such special contingency reserve, such balance
shall be deposited to the credit of the revolving fund, subject to the right of the
insurance company or companies issuing the policy to make such deposit in
equal monthly installments over a period of not more than two years.
772. Benefit certificates
"The Administrator shall arrange to have each member insured under a policy
purchased under section 766 of this title receive a certificate setting forth the
benefits to which the member is entitled thereunder, to whom such benefit shall
be payable, to whom claims should be submitted, and summarizing the provisions
of the policy principally affecting the member. Such certificate shall be in lieu
of the certificate which the insurance company or companies would otherwise be
required to issue.
773. Forfeiture
"Any person guilty of mutiny, treason, spying, or desertion, or who, because of
conscientious objections, refuses to perform service in the Armed Forces of the
United States or refuses to wear the uniform of such force, shall forfeit all rights
to Servicemen's Group Life Insurance under this subchapter. No such insurance
shall be payable for death inflicted as a lawful punishment for crime or for military
or naval offense, except when inflicted by an enemy of the United States.
774. Advisory Council on Servicemen's Group Life Insurance
"There is hereby established an Advisory Council on Servicemen's Group
Life Insurance consisting of the Secretary of the Treasury as Chairman, the Secre-
tary of Defense, the Secretary of Commerce, the Secretary of Health, Education,
and Welfare, and the Director of the Bureau of the Budget, each of whom shall
servo without additional compensation. The Council shall meet once a year,
or oftener at the call of the Administrator, and shall review the operations under
this subchapter and advise the Administrator on matters of policy relating to his
activities thereunder.
775. Jurisdiction of District Courts
"The district courts of the United States shall have original jurisdiction of
any civil action or olalm against the United States founded upon this subchapter.
776. Effective date
"The insurance provided for in this subchapter and the deductions and contribu-
tions for that purpose shall take effect on the (late designated by the Administrator
and certified by him to each Secretary concerned."
(b) Section 211(a) of title 38, United States Code, is amended by inserting
"775," immediately before "784'.
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
6 GROUP LIFE INSURANCE FOR THE LNIFORMED SERVICES
SEc. 2. The analysis of chapter 19 of title 38, United States Code, is amended
(1) by redesignating "SUBCHAPTER III--GENERAL" as "SUBCHAPTER IV-
GENERAL" and (2) by inserting after
"760. Waiver of premium paymene on due date."
the following:
"SuBduAPTHR III-SERVICEMEN'S GROUP LIPS INSURANCE.
"765. Definitions.
"766. Eligible insurance Companies.
"767. Persons insured; amount.
"768. Termination of coverage; conversion.
"760. Deductions; payment; investment; expenses.
11770. Bonefciaries; payment ofinsuranee.
"771. Basic tables of premiums; readjustment of rates.
"772. Benefit certificates.
"773. Forfeiture.
"774. Advisory Council on Servicemen's Group Life Insurance.
'775. Jurisdiction of District Courts.
"776. Effective date."
SEC. 3. (a) In the case of each veteran who died or dies-
(1) as a direct result of actions of hostile forces;
(2) as a direct result of an accident involving a military or naval aircraft
or an aircraft under i charter to the Depar,ment of Defense, Army, Navy, or
Air Force;
(3) as a direct result of an explosion of an instrumentality of war; or
(4) while performing service for which incentive pay for hazardous duty
or special pay is authorized by section 301, 304, or 310 of title 37, United
States Code;
while in the active military naval, or air aerv ice during the period from January
1, 1957, to the date immediately preceding the date on which the Servicemen's
Group Life Insurance program is placed in eVect pursuant to section 776 of title
38, United States Code, both dates incluaiie, the Administrator of Veterans'
Affairs shall pay a death gratuity to the widow or widower, child or children, or
parent or parents of such veteran, as provided in subsection (b), in an amount
not exceeding $5,000, determined as provided in subsection (c), but only if (A) ap-
plication is made for such death gratuity wit'.lin one year after the date of enact-
ment of this Act and (B) the person or persons receiving a death gratuity under
this section waive all future rights to death compensation and dependency and
indemnity compensation, under title 38, United States Code, on account of the
death of such veteran.i
(b) The death gratuity authorized by this Section shall be paid to the following
classes of persons and in, the order named-
(1) to the widow or widower of the veteran, if living;
(2) if no widow,or widower, to the chi A or children of the veteran, if living,
in equal shares;
(3) if no widow, widower, or child, tc the parent or parents of the veteran
who last bore that relationship, if living, in equal shares.
(c)(1) The death gratuity authorized by this section shall be $5,000 reduced
by the aggregate amount of (A) United SI.ates Government life insurance and
national service life insurance paid or payable on account of the death of such
veteran and (B) any death compensation or dependency and indemnity compensa-
tion received on account of the death of such veteran by the person or persons who
receive such death gratuity.
(2) In any case where two or more penions are eligible for a death gratuity
under this section on account of the death of the same veteran but one or more
of such persons do not waive future death compensation or dependency and
indemnity compensation payable under the 38, the Administrator shall pay
his or their share of such death gratuity to the person or persona waiving such
compensation. However, the death compE nation or dependency and indemnity
compensation payable to any other person shall not be increased solely as the
result of an election and waiver under this section.
(3) The right of any person to payment of a death gratuity under this section
shall be conditioned upon his being alive to receive such payment. No person shall
have a vested rightito any such payment and any payment not made during
the person's lifetime!shall be paid to the person or persons within the permitted
class next entitled to priority, as provided in subsection (b).
(d) Any terms used in this section which are defined in section 101 or 102(b)
of title 38, United States Code, shall, for the purposes of this section, have the
meanings given to them by such section 01 or 102(b), except that (1) the term
"vetran," as used in this section, includes a person who dies while in the active
 Approved For Release 2 A ~/ 4F:?bIR i n A 0210905-9
military, naval, or air service and (2) the term "child" shall not be limited with
respect to age or marital status.
(e) Appropriations made to the Veterans' Administration for "Compensation
and pensions" shall be available for the payment of death gratuities under this
section.
EXPLANATION OF THE BILL
The bill provides a group life insurance plan for all members of the
uniformed services who are on active duty on and after the effective
date designated by the Administrator of Veterans' Affairs. This is
expected to be within a matter of days after Presidential approval.
The coverage is automatic, with the serviceman required to take
affirmative action to remove himself from the program. The coverage
provided is $10,000 or $5,000, no other amounts. If the serviceman
elects out of the program after the automatic coverage and later
applies for readmission, he must be able to meet good health require-
ments.
Premium rates for servicemen are expected to be $2 a month for
$10,000 and $1 per month for $5,000, including claim and administra-
tive costs. This cost may be adjusted, hopefully downward, as
experience dictates. y
Premiums would be deducted from the
the
Department of Defense and remitted to the Veteof a serviceman rans' Admin stration.
The costs traceable to the extra hazards of service will be borne
by the Government; otherwise, the program would be self-sustaining,
with the deductions from the pay of the serviceman being such as to
pay the administrative expenses attributable to the Veterans' Ad-
ministration.
The cost of the extra hazards of the service are to be determined on
an actuarial basis, with the total payment of the Federal Government
estimated at about $4 million a year during a period of hostilities such
as exist in Vietnam today. Peacetime costs would not entail any
extrahazard contribution, or at most a nominal one. There would be
no extrahazard determination on an individual basis.
The mode of settlement is limited to a lump-sum payment or settle-
ment over a 36-month period in equal monthly installments. Selec-
tion of the particular mode may be made by the insured, or, if he does
not do so, the first beneficiary. The serviceman may designate any
person as a beneficiary. If an affirmative designation is not made,
the insurance will be paid in the following order:
Widow or widower;
Child or children;
Parents;
If none of the above, to the executor or administrator of the
estate;
If none of the above, to the next of kin of such member or
former member under the laws of domicile of such member at
the time of his death.
Upon discharge from the service, the individual is protected in the
full amount of his dpolicy for 120 days; the cost for this being borne
of his active service.
by t any time during Bring the his service period
not later than 120 days follow-
ing the date of his discharge, an individual will have the right to
obtain from any one of those insurance companies participating in the
program, or other companies who can ~1,~V
Approved For Release 2003/11/04: CIADP67~(~~~~6~i0005-9
 Approved For Releas 2003/11/04: qIA-RMMOo 4fifW oSOD211 ff" UNIF2RMEV SERVICES
wit rout medical examination in an amount equal to the group insur-
ance policy under which he was protected during the period of service.
d d bilit he would be eligible
If the man has a service-connecte isa y,
for a commercial policy without medical examination and in addition,
would be eligible for a $10,000 service-disabled veteran's insurance
pol.cy administered by the Veterans' Administration. In the latter
case, he must apply for this policy within 1 year of the date of estab-
lishment of service connection.
The number of participating reinsuring companies would be deter-
mined according to qualifying criteria established by the Adminis-
trator. The expectation being that the number of such participants
would at least equal or closely approximate the number under the
existing Federal employees group life insurance plan. It is suggested
that the Administrator in arranging for reinsurance of the servicemen's
group life insurance will prorate the reinsurance on a basis which will
give greater weight to the proportion of life insurance issued by such
reinsurers on members of the uniformed services in relation to the total
amount of life insurance issued by such reinsurers. The prime
ineurers would be required to be eligible to do insurance business in
all 50 States and the District of Columbia, while the reinsurers would
not be so limited.
The group insurance policy would be in addition to any U.S. Gov-
ernment life insurance or national service life insurance which the
serviceman might hold at the time he became eligible for the group
pclicy. .
Section 1 of the bill contains the provisions described above.
Section 2 of the bill is a technical amendment to title 38, United
States Code.
Public Law 881 of the 84th Congress provided three basic benefits
tc veterans and their survivors. First, it provided a 6-month death
gratuity ranging from a minimum of $800 to a maximum of $3,000.
Secondly, it provided full coverage under the social security system for
all members of the Armed Forces. Thirdly, it established a system
ol' dependency and indemnity compensation known as DIC which
resulted in payments to a surviving widow of $120 a month plus 12
percent of the base pay of the person who se rued. Today this means
that the rate ranges from a minimum of $131 to a maximum of $377
monthly. No distinction is made between wartime and peacetime
deaths.
Section 3 of the bill provides for the period January 1, 1957, and
continuing until the effective date of the: group insurance plan, a
child or children,
000 to the widow
f $5
,
riaxinium death gratuity o
, and parents of individuals who served during this period in one of the
branches of the Armed Forces and who lost; their lives under certain
hazardous conditions as a result of such service. Such a gratuity
would be payable upon waiver of DIC, described previously. The
amount of the death gratuity would bereduced the
any DIC, national service life insurai
insurance payable in the case. The figure of $5,000 has a precedent
originating in World War II veteran laws When such a payment was
authorized under similar conditions. The cost of the program of
death gratuities under section 3 is estimated at about $19.7 million.
Hearings were held on this and rely ed bills before the Subcommittee
Approved For Releas , 200 111/04 : CIAI QRrA7 ?46642QM5b02j OodgLe
 GROUP LIFE INSURANCE FO T E UNIFORMED SERVICES 9
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210d6
The favorable reports from the Veterans' Administration and the
Department of Defense follow:
AGENCY REPORTS
VETERANS' ADMINISTRATION,
Hon. OLIN E. TEAGUE, Washington, D.C., September 14, 1965.
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, D.C.
DEAR Mu. CHAIRMAN: This is in response to your requests for
reports on S. 2127 and H.R. 10873, 89th Congress.
In general, S. 2127 proposes to provide a maximum amount of
$10,000 automatic free "special indemnity insurance" (reduced by
the amount of national service or U.S. Government life insurance in
force at the time of death) for death while on active duty with the
Armed Forces in a combat zone on or after January 1, 1962, or as a
direct result of an injury or disease incurred in a combat zone not
more than 2 years prior to death. II.R. 1.0873 would authorize the
Administrator of Veterans' Affairs to purchase from one or more
commercial life insurance companies a group life insurance policy or
policies which would automatically insure each member of the uni-
formed services on active duty in the amount of $10,000 unless such
member declined to be so insured. A uniform premium would be
deducted from the pay of all servicemen and the Government would
contribute an amount necessary to cover the costs traceable to the
extra hazard of service.
As you know, I appeared before the Subcommittee on Insurance of
your committee on September 9, 1965, and briefly discussed the pro-
visions of these two bills and explained the position of the Veterans'
Administration with respect to each of them. This further written
report is being submitted to supply for the record the attached
analyses of S. 2127 and H.R. 10873, discussing in detail the provisions
of each bill and certain cost aspects.
For the reasons I expressed in my testimony on September 9, I am
unable to recommend favorable action by your committee with respect
to S. 2127. The Veterans' Administration, however, supports the
principle of group life insurance as proposed in H. R. 10873 and, subject
to certain technical and other perfecting amendments, recommends
its favorable consideration by the committee.
Advice has been received by the Bureau of the Budget that there is
no objection to the presentation of this report from the standpoint
of the administration's program.
Sincerely,
DETAILED ANALYSIS OF S. 2127, A BILL TO ESTABLISH A PROGRAM OF
FREE "SPECIAL INDEMNITY INSURANCE" FOR MEMBERS OF THE
ARMED FORCES SERVING IN COMBAT ZONES, AND DATA REGARDING
ADMINISTRATIVE AND OTHER COST ASPECTS OF TIIE BILL
The bill would provide a maximum amount of $10,000 free "special
indemnity insurance" for members of the Armed Forces against
death while on active dut th ~} e Ar ed Forces in a combat zone,
Approved For Release 2003/11/04: CIA-f ,_1., 4fO9I56~210~05-~'
 Appr&ed $91 L4M4N OI~/0~4?RC1 X12 ~g ~6 ~1~1? 00210005-9
or death as a direct result of an injury or disease incurred while
serving in a combat zone if such injury or desease was incurred not
more than 2 years prior to death. If the serviceman was also insured
under a contract of U.S. Government life insurance (USGLI) or
national service life] insurance (NSLI), the indemnity payable would
be the difference between the amount of his USGLI and NSLI and
$10,000. 1
The special indemnity insurance authorized would be payable in
120 equal monthly installments with interest at 2y4 percent per annum,
and only to the surviving spouse, children, parents, or brothers or
sisters of the insured, as those terms; are defined in the bill. The
insured would have the right to designate the beneficiaries within
the classes named,, the proportion of the principal amount to be
paid to each, and to change beneficiaries within the classes without
the consent of the beneficiaries. If the designated beneficiary does
not survive the insured, or if the insired did not designate a bene-
ficiary, the indemnity would be payable to the first eligible class of
beneficiaries among; those named above. In such a case if a class is
composed of more than one individual, payments would be made in
equal shares among such individuals. Any installments not paid to
a beneficiary during his lifetime would be paid to the designated
contingent beneficiary, if any; otherwise to the next eligible class of
beneficiaries listed., No payment would be authorized to be made
to the estate of any, deceased person.
The term "combat zone" is defined in S. 2127 as "any area outside
the United States determined by the President to be an area in which
units of the Armed Forces of the United States have engaged in
combat operations on or after January 1, 1962, and before such date
as may be determined by Presidential proclamation."
Section 2 of S. 2127 would provide that any serviceman who serves
in a combat zone for 30 days or more (or who is ordered to such duty
for 30 days or more) and who is insured under a policy of NSLI or
USGLI shall be entitled, upon written application, to a waiver (with
the right to a refund after termination of combat zone duty) of
all premiums paid on term insurance and that portion of any per-
manent insurance premiums paid representing the cost of the pure
insurance risk as determined by tho Administrator. It would re-
quire that all premiums due during the period the waiver is in effect
be timely paid to maintain the insurance in force. The waiver would
apply to premiums becoming due after the first day of the first calendar
month following the date of enactment of the bill or the first day of
the first calendar month following entry into active duty with the
Armed Forces in a!combat zone, whichever is the later date, and the
waiver would continue during the remainder of such continuous active
duty in a combat one and for 120 days thereafter. No premiums
would be waived prior to the date of application for such waiver.
Any premium waiver granted on a participating contract would
render such insurance nonparticipating during the period premium
waiver is in effect.' Upon certification of the period of combat zone
duty by the Secretary of the military department concerned and upon
application by the insured (or in death cases by the beneficiary of the
insurance), the Administrator would refund to the insured or to the
Appr beneficiary the amount of premiums waived.
t of
in f el t remi ~d~0
insurance un e i i q~6#1$31ib11'~1~~`d9A05-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
GROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES 11
would be borne by the United States in an amount which, when added
to any reserve of the policy at the time of maturity, would equal the
then value of such benefits under such policy. Where life contin-
gencies are involved in the calculation of the value of such benefits,.
the calculation would be based upon such mortality table or tables as
the Administrator may prescribe, with interest at rates prescribed in
the bill.
Currently, 38 U.S.C. 417 prohibits the payment of dependency and
indemnity compensation to the survivors of any veteran dying after
April 30, 1957, who has in effect at the time of his death a contract of
NSLI or USGLI under an in-service waiver of premiums (38 U.S.C.
724). S. 2127 would provide that this prohibition shall not apply in
the case of waivers granted pursuant to the bill.
The bill also proposes to add a new section 726 to title 38, United
States Code, providing that any person entitled to indemnity protec-
tion, who was ordered to active duty with the Armed Forces in a com-
bat zone for a period of 30 days or more or who served in such zone
for 30 days or more would, upon application in writing made within
120 days after separation from active duty and payment of the re-
quired premiums, and without medical examination, be granted post-
service insurance. This insurance would be issued upon the same
terms and conditions as are contained in standard policies of NSLI
except (1) term insurance would not be renewed on the term plan
after the insured's 50th birthday (2) the premium rates for term or
permanent plan insurance would be based on the 1958 Commissioners
Standard Ordinary Mortality Table; (3) all cash, loan, extended and
paid-up insurance values would be based on the 1958 Commissioners
Standard Ordinary Mortality Table; (4) all settlements on policies
involving annuities would be calculated on the basis of the annuity
table for 1949; (5) all calculations in connection with insurance issued
under the bill would be based on interest at the rate of 3'/2 percent
per annum; (6) the insurance would include such other changes in
terms and conditions as the Administrator determines to be reasonable
and practicable; and (7) the insurance and any total disability income
provisions attached thereto would be on a nonparticipating basis and
all premiums and other collections therefor would be credited to a
revolving fund established in the Treasury of the United States.
Payments on such insurance and total disability provision would be
made directly from such fund. Appropriations would be authorized
to the fund. Provision is made for the Secretary of the Treasury to
invest in, and to sell and retire, special interest-bearing obligations of
the United States for the account of the revolving fund, with interest
on such obligations computed under criteria set forth in the bill.
S. 2127 also proposes to amend 38 U.S.C. 3107 relating to appor-
tionment of benefits. Under this provision, if the surviving spouse
of a deceased person covered by indemnity insurance has remarried
or if any such deceased person's children are not in the custody of
the surviving spouse, all or any part of the special indemnity insurance
otherwise payable to such spouse could be apportioned by the Ad-
ministrator on behalf of the surviving children or parents.
Because of the many unknown factors involved, our estimate of
the cost of S. 2127, if enacted, is based on certain assumptions. We
have been advised that since January 1, 1962, there have been ap-
proximately 900 combat zone deaths stemming from injury or disease.
The following estimate utilizes this figure and the assumptions that
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
12 GROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES
the U.S. Armed Forces in combat zones will be maintained at about
150,000 of which 15,000 will have Government life insurance; and
that the annual mortality rates of such forces will be 8 per thousand.
These mortality assumptions will result, for the purposes of these
cost estimates, in 1,200 deaths per year. The total incurred yearly
indemnity cost would therefore be 1,080 times $11,148 (includes
interest factor) or $12,039,840. Since these benefits, however, are
paid in installments over a 10-year period, the annual budgetary cost
would be $2.5 million the first year, of which $1,100,000 would cover
(retroactive installments, $2.7 million the second year, $4 million the
'third year, $5.1 million the fourth year, and $6.3 million the fifth year.
'The claims cost of the waiver provision for the remaining 120 deaths
would be $1,200,000 each year. In addition, there will be a small
administrative cost of the waiver provision and, although the proposed
postservice insurance should be self-sustaining, there will also be some
administrative costs for this program.
The general purpose of the bill is to establish a program of group
life insurance to be provided by private insurance companies for
members of the uniformed services who are on active duty.;
f The bill would amend title 38, United States Code, toe authorize
the Administrator of Veterans' Affairs to purchase from one or more
life insurance companies which are licensed to issue insurance in the
50 States and the District of Columbia and have in effect, at least 1
percent of the total amount of group life insurance in effect in the
United States a policy or policies which would provide the group life,
insurance coverage for members of the uniformed services; The life
insurance comp Lny or companies issuing such a policy; would be
required to establish an administrative office at a place and under a-
name designateu by the Administrator, and to reinsure, under condi-
tions approved by him, portions of the total amount of insurance
under such policy or policies with, such other life insurance ! companies
as may elect to participate in such reinsurance. The Administrator
may at any time discontinue any such policy or policies so purchased
from any insurance company.
The group life insurance authorized under the bill would auto-
matically insure each member of the uniformed service on full-time
active duty (under a call or order to duty that does not specify a
period of 30 days or less) against death from the first day of such duty,
or from the data certified by the Administrator to the Secretary of the
uniformed service concerned as the date servicemen's group life
insurance takes effect under the bill, whichever date is the later date,
and for 120 days after separation or release from such active duty.
Each member Af the uniformed service would be insured' for $10,000
unless he elects in writing (1) not be insured under the bill, or (2)
elects to be insured in an amount less than $10,000, which must be a
multiple of $5C0, but not than $1,000. The insured's premium would
be deducted from his basic pay.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
DETAILED ANALYEIS OF ILR. 10873, A BILL TO ESTABLISH A PROGRAM
OF GROUP LIFE INSURANCE PROVIDED BY PRIVATE INSURANCE
COMPANIES OF. MEMBERS OF THE UNIFORMED SERVICES ON ACTIVE
I DUTY
 GROUP LIFE INSURA
Approved For Release 2003/11/04: CIA-RDP67B0044bK0uuo V6uo-ICES 13
Under the bill no person may carry a combined amount of national
service life insurance (NSLI) on the term plan, U.S. Government
life insurance (USGLI) on the term plan or servicemen's group life
insurance (group insurance) in excess of $10,000 at any one time.
Any person insured under permanent plan NSLI or USGLI may
be insured under the bill but the amount payable upon maturity
of the group insurance may not exceed the difference between the
face value of such permanent plan insurance and $10,000, plus the
actual cash value of the permanent plan insurance on the date of
the insured's death.
The above limitations in the bill avoid double liability on the part
of the United States for deaths traceable to the extra hazard of mili-
tary or naval service. The Government bears such cost under
existing law with respect to participating NSLI and USGLI, and
under the bill would bear such cost with respect to group insurance.
In general, under existing law, the excess mortality cost traceable
to the extra hazard of military or naval service borne by the United
States is an-amount which, when added to the reserve of a participating
NSLI policy at the time of death of the insured will equal the then
value of such benefits under the olicy. The reserve value of term
policies is always very small, often less than one dollar. Hence,
upon maturity of a participating NSLI or USGLI term policy where
the death of the insured is traceable to the extra hazard of military
or naval service such cost to the Government, for all practical pur-
poses, equals the face amount of the policy if settled in a lump sum,
and exceeds the face amount if settlement is made as a life annuity
in monthly installments. On the other hand, the cash value of a
permanent plan policy is a substantial sum, often amounting to
several thousands of dollars. This cash value belongs to the insured
and can be withdrawn by him at any time. The bill encourages
holders of permanent plan NSLI or USGLI policies to continue
such insurance by permitting them to obtain group insurance in
an amount of not less than $1,000, in multiples of $500 approximating
the cash value of their permanent plan policies.
As indicated, the group life insurance authorized under the bill
would terminate 120 days after separation or release from active duty.
For this purpose any member of the uniformed services who is absent
without leave for a period of more than 31 days shall be deemed to
have been separated from active duty as of the date such absence
commenced. If such it member returns to active duty there will
be deducted from his basic pay an amount to cover the premiums
for the period he was insured during his absence.
The group life insurance authorized under the bill could be con-
verted to permanent plan insurance at any time at the option of the
insured. The insured upon request to the administrative office
established by the insurance companies under the bill would be
furnished a list of the life insurance companies participating in the
program, from which he could select the coin We, y with winch he
wished to place his permanent plan insurance. would be granted
such insurance upon written application to the company of his choice,
payment of the required premium, and without medical examination.
The permanent plan insurance thus granted would be on a plan then
currently written by such company, which does not provide for the
payment of any sum less than the face value thereof o the pay-
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-W
 Approved For ReleasLA20091sNA8 !I$IA3 yl?dVt4W#bdM82 ofvicEs
njent of additional premiums if the insured engages in the military
service of the United States.
The cost of the group life insurance authorized under the bill
would be borne in part by the members of the uniformed services
and in part by the Government. The premium charge for each $1,000
group insurance granted would be the same for all members of the
uniformed service and would be deducted from their basic pay. Any
such charge not so deducted, or otherwise paid, would be deducted
from the proceeds of the insurance upon the death of the insured.
The insured's share of the first premium due would be advanced
from the current appropriation for his pay, and would constitute a
lien upon any servnee or other pay accruing to him.
The Governments share of the cost of the group insurance would
be contributed from the appropriation made from the serviceman's
pay. It would be an amount determined by the Administrator and
certified to the Secretary concerned to be the cost of such insurance
traceable to the extra hazard of the performance of active duty in
the uniformed services. Such costs would be determined by the
Administrator on the basis of the excess mortality suffered by mem-
bers of the uniformed services on active duty above that incurred
by the male civilian: population of the United States of the same age
as the average age of members of the uniformed services.
The sums withheld from the basic pay of the servicemen and the
sums contributed fiom the appropriations for the extra hazard costs,
together with the income derived from any dividends or premium
rate adjustments received from insurers would be deposited to a
revolving fund established in the Treasury of the United States,
and all premium payments to the insurance companies, and the
administrative cost of the program to the Veterans' Administration
would be paid from such fund. Provision is made for investment of
the fund in interest bearing obligations of the United States under
criteria set forth in the bill, and for transfer of the administrative
Costs to the Veterans' Administration from the fund to the appro-
priation "General operating expenses, Veterans' Administration".
The insured could designate any person or legal entity as bene-
~iciary of his group life insurance. If no designated beneficiary
survived the insured or did not file claim within 1 year after death of
the insured, payment would be made in the order listed to the. widow
or widower, child or children, parents, duly appointed executor or
administrator of the estate of the insured, or to the next of kin' entitled
under the laws of the domicile of the member at the time of his death.
The premium rates to be charged by the companies would be
determined by the Administrator on a basis consistent with the lowest
rates charged large employers for group insurance. Subsequent
readjustments wo,ild be made if found necessary by experience.
Annual reports, accounting for all income and expenses under the
policies, would be made by the insuring companies. Any excess of
premium income over mortality and expense and risk charges will be
held as an interest bearing contingency reserve, for use in meeting
future charges or for eventual return to the revolving fund in the
Treasury.
Each insured member would receive a certificate setting forth the
benefits to which he is entitled, to whom the benefits would be payable,
Approved For Releasebb~~~ /04i ~? a provisions of
!.tfie policy. Such ce' r t scat` 'Wo1iT b WWI rtificate which
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
GROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES 15
the insurance company or companies would otherwise be required to
issue.
Any person guilty of mutiny, treason, spying or desertion, or who,
because of conscientious objections, refuses to perform service in the
Armed Forces of the United States, or refuses to wear the uniform of
such service would forfeit all rights to group insurance. No such
insurance would ba payable for death inflicted as lawful punishment
for crime, or for military or naval offense, except when inflicted by an
enemy of the United States.
The insurance provided by the bill and the deductions and contri-
butions for that purpose would take effect on the date designated by
the Administrator and certified by him to the Secretary of the uni-
formed service concerned.
STATEMENT OF W. J. DRIVER, ADMINISTRATOR OF VETERANS' AFFAIRS,
SEPTEMBER 9, 1965
I am pleased to present the views of the Veterans' Administration
on S. 2127, 80th Congress, a bill to establish a program of free "special
indemnity insurance" for members of the Armed Forces serving in a
combat zone, and on H.R. 10873, a bill to establish a program of
group life insurance to be provided by private insurance companies
for members of the uniformed services who are on active duty.
S. 2127 proposes to provide a maximum amount of $10,000 auto-
matic free "special indemnity insurance" (reduced by the amount of
national service life or U.S. Government life insurance in force at
the time of death) for death while on active duty with the Armed
Forces in a combat zone (as that term is defined in the bill) on and
after January 1, 1962, or as a direct result of an injury or disease
incurred in a combat zone not more than 2 years prior to death.
The insured would have the right to designate the beneficiaries of
the special indemnity insurance, but only within the classes named:
spouse, children, parents, brothers, or sisters of the insured. The
benefit would be payable to the surviving beneficiaries over a 10-year
period. The bill provides for apportionment of the benefits payable
with respect to certain beneficiaries under prescribed criteria.
The bill would also authorize for persons insured under U.S. Gov-
ernment life or national service life insurance, a waiver of all premi-
ums on term insurance and that portion of the premium representing
the pure insurance charges on permanent plan insurance during the
period they were covered by the special indemnity insurance. Such
insureds would have to continue their insurance in force by payment
of premiums and apply for a refund after termination of their com-
bat zone duty. Finally, the bill would authorize the issuance of post-
service insurance to persons entitled to indemnity protection, under
certain conditions.
The general purpose of H.R. 10873 is to authorize the Adminis-
trator of Veterans' Affairs to purchase from one or more commercial
life insurance companies a group life insurance policy or policies which
would automatically insure each member of the uniformed services
on active duty in the amount of $10,000 unless such member declined
to be so insured or to be insured in an amount less than $10,000.
A premium-which would be uniform for all servicemen-would be
deducted from his pay. The Government would contribute an
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
16 GROUP LIFE IN3URANCE FOR THE UNIFORMED SERVICES
amount to cover the 3xcess mortality cost of such insurance traceable
to the extra hazard of service.
The group life insurance granted under the bill would cease 120
days after separatior from active duty. While the group insurance
was in force the insured could-upon application, payment of the
required premiums, mnd without medical examination-convert to a
permanent plan of irsurance then written by one of the participating
commercial compani 3s selected by the insured.
The group insurance would be payable to the designated beneficiary
or beneficiaries selected by the insured. In, the absence of a desig-
nated beneficiary, the insurance would be payable to the surviving
spouse, children, parents, duly appointed executor or administrator
of the insured's estate, or to other next of kin under the laws of the
domicile of the insured at the time of his death.
The bill specifies certain criteria governing the selection, by the
Administrator, of the primary commercial insurer and would require
that company to reinsure portions of the total amount of insurance
with such other life insurance companies as may elect to participate
in the program.
Recently in the 3ourse of our consideration of the general field of
veterans' benefits--and particularly the aspects with which S. 2127
and H.R. 10873 an concerned-certain factors have becomeincreas-
ingly apparent. First, although it is true that commercial insurance
is available witho,it restriction to servicemen who are performing
essentially peacetime duties, it is argued that those men who have
been alerted for, or who are serving in, a combat zone are not readily
able to obtain-at standard rates and without war exclusion clauses-
commercial insurance, coverage. Second, many of our young service-
men do not have c, wife or children. In the event of their death, the
'program of dependency and indemnity compensation established by
the Survivor Benefits Act authorizes benefits for their parents only
if they meet a specified "needs" test and for two parents living to-
gether no dependency or indemnity compensation benefits are payable
if their annual ir.come exceeds $2,400. It is extremely difficult to
devise a change vithin the framework of the existing program which
would provide benefits for nondependent parents within the basic
needs concept that has been incorporated in it. Third, there are
servicemen who are survived by individuals such as brothers or sisters
who are not afforded any benefits under the dependency and indemnity
compensation program, but to whom the serviceman may well feel
he owes some survivorship protection.
The group life insurance proposal, H.R. 10873, provides' a feasible
solution to thes,; problems. It would authorize $10,000 insurance
coverage for all men in service; it would make benefits available in
those cases where only nondependent parents survive a man killed in
service; and it would permit servicemen to designate other beneficiaries
now ineligible under the survivor benefits law. Under S. 2127, the
indemnity bill, he entire cost would be borne by the Government.
Thus, a furthe, gratuity would be superimposed on the existing
gratuitous survivor benefits program which, including lull Social
Security coverage, was carefully evolved by the House of R.epresen,ta-
tives Select Committee about 10 years ago. On the other hand, H.R.
10873, by requiring premium payments which, in the absence of a
very extensive escalation of the military situation, will make the
program close to self-supporting. Accordingly, this approach will
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 make available in every case a reasonable amount of insurance pro-
tection, the unavailability of which the sponsors of S. 2127 assert is
the basic justification for the indemnity approach.
In the light of the foregoing consideration, I am unable to recom-
mend favorable action on S. 2127, but am pleased to inforin the
committee that the Veterans' Administration supports the principle
of group life insurance as proposed in H.R. 10873. I understand
that certain technical and other perfecting amendments to the bill
are indicated. In this connection, my staff will be available to the
committee at any time to assist in working out such amendments.
GENERAL COUNSEL OF THE DEPARTMENT OF DEFENSE,
Washington, D.C., September 13, 1965.
Hon. OLIN E. TEAGUE,
Chairman, Committee on Veterans' Affairs,
House of Representatives,
Washington, D.C.
DEAR MR. CHAIRMAN. Reference is made to your request for the
views of the Department of Defense with respect to H.R. 10873,
89th Congress, to amend title 38, United States Code, to establish
a program of group life insurance which shall be provided by private
insurance companies for members of the uniformed services who are
on active duty.
The purpose of H.R. 10873 is as stated in the title. Specifically,
it provides that each member of the uniformed services on active duty
for more than 30 days would be eligible to participate in group life
insurance in an amount not to exceed $10,000. The Administrator
of Veterans' Affairs would be authorized to purchase group life in-
surance policies from one or more life insurance companies to provide
the benefits of the bill. The eligible members of the uniformed services
could elect to be covered by group life insurance in any amount more
than $1,000 to a maximum of $10,000, except that a member could not
carry a combined amount of national service life insurance (NSLI)
on the term plan, U.S. Government life insurance (USGLI) on the
term plan and servicemen's group life insurance in excess of $10,000
at one time. Members insured under a permanent plan of NSLI
or USGLI could be insured under the provisions of the bill but this
amount payable under the group life insurance may not exceed the
difference between the face value of the permanent plan insurance and
$10,000 plus the actual cash value of his permanent plan insurance.
Upon separation or release from active duty, the member's group life
insurance policy would continue to be in effect for 120 days. During
the period between separation or release from active duty and 120
days, the member would be eligible to purchase from one of the
participating companies, upon written request and payment of pre-
miums, a similar life insurance policy without medical examination,
and without a war risk limitation.
The bill provides that the member's share of the cost of the group
life insurance policy, except as noted below, may be deducted each
month from his basic pay. That portion of the cost traceable to the
extra hazard of performance of active duty would be defrayed from the
appropriation made for the pa of members of the Armed Forces
generally. These moneys would bee~ ~d~epposited to a revolving fund
Approved For Rete'' t543IlM/tl114 dl*vRD?6rB9L14 FeBOGG50Q2 0 e. The
H. Rept. 1003, 89-1-3
 Approved For Release1*03/ Q4 i WTR- MDQOMFMQ 6Bt00QbiORv'cE; 3
Treasury Department could invest these moneys in certain interest-
bearing U.S. securities. The premium to the insuring companies
would be paid from this revolving fund. The fund would also reim-
burse the Veteran Administration for the costs of administering the
program.
Under the bill the member would be free to designate beneficiaries
of his choice. WE ere such designation is not made, a priority among
survivors is provided.
The Department of Defense strongly, supports the principles con-
jtained in H.R. 10873 because it contriutes to the accomplishment
of several objectives favored by the Department. First, the bill
provides an immediate, low cost, group insurance program, available
to all service personnel with minimum costs accruing to the Federal
Government. In so doing, it meets a basic requirement to cover
,those young members whose nondependent survivors would not
qualify for payments under dependency and indemnity laws. See-
iondly, the bill effects an added inducement to a service career. Thirdly,
Ithe bill provides yet another element of a sound financial plan for
members and their survivors in event of their death. The Depart-
ment considers that the bill would contribute importantly to, the mor-
ale of members o. the Armed Forces by remedying certain gaps in
the coverage of the Servicemen's and Veterans' Survivor Benefit
Act and would Ilso be extremely helpful in connection with the
recent difficulty that members of the Armed Forces assigned to Viet-
nam have encouni;ered in obtaining private insurance.
Since the bill would be administered by the Veterans' Ad'Ininistra-
tion, the Department of Defense defers to that agency as to the
technical aspects of the bill.
The Department of Defense is unable to estimate the impact of
this legislation on the defense budget at this time.
The Bureau of the Budget advises that, from the standpoint of the
administration's program, there is no objection to the presentation
of this report for she consideration of the committee.
Sincerely,
L. NIEDERLEHNER,
Acting General Counsel.
CHANGES IN :;XISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3 of rule XIII of the Rules of the House
of Representatives; changes in existing law made by the bill, as
reported, are shown as follows (existing law proposed to be omitted is
enclosed in black brackets, new matter is printed in italic, existing law
in which no change is proposed is shown in roman) :
SECTION 211 AND CHAPTER 19 OF TITLE 38, UNITED
STATES CODE
? 211. Decisions by Administrator; opinions of Attorney General
(a) Except as provided in sections 775, 784, 1661, 1761, and as to
matters arising ender chapter 37 of this title, the decisions of the
n s r tor or. any~qu~estion of law or fact concerning a claim for
Approved For Release j, ; 4. pJ J /c OU46R.BU66O82it0O06-9y the', Veterans'
Administration shall be final and conclusive and no other official or
 Approved For Release IJU4 :IG4ARDP'SFBOO4 R8 1085 s 19
any court of the United States shall have power or jurisdiction to
review any such decision.
(b) The Administrator may require the opinion of the Attorney
General on any question of law arising in the administration of the
Veterans' Administration.
M ? N M * F ?
SUBCHAPTER I-NATIONAL SERVICE LIFE INSURANCE
See.
701. Definitions.
702. Premium rates and policy values.
703. Amount of insurance.
704. Plans of insurance.
705. Renewal.
706. Policy provisions.
707. Dividends to pay premiums.
708. Premium payments.
709. Effective date of insurance.
710. Incontestability.
711. Forfeiture.
712. Total disability waiver.
713. Death before six months' total disability.
714. Statutory total disabilities.
715. Total disability income provision.
716. Insurance which matured before August 1, 1946.
717. Insurance maturing on or after August 1, 1946.
718. Assignments.
719. National Service Life Insurance appfopriation.
720. National Service Life Insurance FFund.
721. Extra hazard costs.
722. Service disabled veterans' insurance.
723. Veterans' special term insurance.
724. In-service waiver of premiums.
725. Limited period for acquiring insurance.
SUBCHAPTER II-UNITED STATES GOVERNMENT LIFE INSURANCE
740. Definition.
741. Amount of insurance.
742. Plans of insurance.
743. Premiums.
744. Policy provisions.
745. Renewal.
746. Dividends to pay premiums,
747. Incontestability.
748. Total disability provision.
749. Change of beneficiary.
750. Payment to estates.
751. Payment of insurance.
752. Optional settlement.
753. Assignments.
754. Forfeiture.
755. United States Government Life Insurance Fund.
756. Military and naval insurance appropriation.
757. Extra hazard costs.
758. Statutory total permanent disability.
759. Waiver of disability for reinstatement.
760. Waiver of premium payments on due date.
 Release 23/1 PCLI~~QQ4~Q?~6@11~n9sERVICES
SUBCHAPTER III-SERVICEMEN'S GROUP LIFE INSURANCE
785. Definitions.
766. Eligible insurance companies.
767. Persons insure 1; amount.
768. Termination off coverage; conversion.
769. Deductions; payment; investment; expenses.
770. Beneficiaries; payment of insurance.
771. Basic tables of premiums; readjustment of rates.
773. Benefit certificetes.
773. Forfeiture.
77/. Advisory Council on Servicemen's Group Life Insurance.
775. Jurisdiction of District Courts.
776. Effective date.
SUBCHAPTER (III] IV-GENERAL
781. Replacement of surrendered and expired insurance.
782. Adrninistrativ: cost.
783. Settlements fcr minors or incompetents.
784. Suits on insurance.
785. Decisions by the Administrator.
786, Deposits in ar d disbursements from trust funds.
787. Penalties.
788. Savings provision.
Subchapter I-National Service Life Insurance
? 701. Definitions
For the purposes of this subchapter-
(1) The term "insurance" means National Service Life Insurance.
(2) The terms "widow" or "widower" mean a person who as the
lawful spouse of the insured at the maturity of the insurance.
(3) The term "child" means a legitimate child, an adopted child,
and, if designated as beneficiary by the insured, a stepchild or an illegiti-
mate child.
(4) The term':; "parent", "father", and "mother" mean. a father,
mother, father through adoption, mother through adoption, persons
who have stood in loco parentis to a member of the military or naval
forces at any tine before entry into active service for a porlod of not
less than one y(ar, and a stepparent, if designated as beneficiary by
the insured.
? 702. Premium rates and policy values
Premium rates for insurance shall be the net rates based upon the
American Experience Table of Mortality and interest at the rate
of 3 per centuir. per annum. All cash, loan, paid-up, and extended
values, and all other calculations in connection with insurance, shall
be based upon said American Experience Table of Mortality and in-
terest at the rate of 3 per centum per annum.
? 703. Amount ')f insurance
Insurance shrill be issued in any multiple of $500 and the amount
of insurance with respect to any one person shall be not less than
$1,000 or more than $10,000. No person may carry a combined
amount of National Service Life Insurance and United States Gov-
ernment life ins prance in excess of $10,000 at any one time.
? 704. Plans of insurance
(a) Insurance may be issued on the following plans: Five-year level
Approved For Release 2t103PpiF1D t~FfA- 1 ~1 ( ~4 ~ 'f xthirty-payment
ife, twenty-yesr endowment, y, and endow-
ment at age sixty-five. Level premium term insurance may be con-
 Approved For Release 200$f{klk/94,tr0lAa BZB09 48R00tiFOb24>d@Ol&vicEs 21
verted 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 Administrator may promulgate
a policy of participating insurance may be converted to or exchanged
for insurance issued under this subsection on a modified life plan. In-
surance issued under this subsection shall be on the same terms and
condition 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 birth-
day of the insured the face value of the modified life insurance policy
or the amount of extended term insurance thereunder shall be auto-
matically reduced by one-half thereof, without any reduction in
premium.
(c) Under such regulations as the Administrator may promulgate,
a policy of nonparticipating insurance may be converted to or ex-
changed 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 723(b) of this title; and
(2) at the end of the dayth preceding the sixty-fifth birthday of the
insured the face value of e 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 722(a), or section 725
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 722(a) or section
725, whichever is applicable.
(d) Any insured whose modified life insurance policy is in force
by payment or waiver of premimums on the day before his sixty-fifth
birthday may upon written application and payment of premiums
made before such birthday be granted National Service Live Insur-
ance, 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 his 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 insur-
ance 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
Approved For Releasei2'Goe 4m*mA' iDpeO$9ddi46R0 00 '1 9d&s9red is totally
disabled on the day before his sixty-fifth birthday and premiums on
 Approved For Releas j200a~loljp4iigI PRP?ZLBt f4, Qt gB 1 a0&-Rv1CEs
his modified life insurance policy are being waived under section 712
of this title or he is entitled on that date to waiver under such section
he 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.
? 705. Renewal
All level premium term policies, except as otherwise provided in
this section, shall cease and terminate at the expiration of the term
period. At the expiration of any term period any five-year level
premium term policy which has not been exchanged or converted to
a'permanent plan o'. insurance and which is not lapsed shall be re-
newed as level preriium term insurance without application for a
successive five-year period at the premium rate for the attained age
without medical examination. However, renewal will be effected in
cases where the policy is lapsed only if the lapse occurred not earlier
than two months be:ore the expiration of the term period, and rein-
statement in such cases shall be under the terms and conditions pre-
scribed by the Administrator. In any case in which the insured is
shown by evidence satisfactory to the Administrator to be totally
disabled at the expiration of the level premium term period of his
insurance under corditions which would entitle him to continued
insurance protection but for such expiration, his insurance, if subject
torenewal under this section, shall be automatically renewed for an
additional period of five years at the premium rate for the then at-
tained age, unless the insured has elected insurance on some other
available plan.
? 706. Policy provisions
provisions for cast., loan, paid-up, and extended values, dividends
from gains and savings, refund of unearned premiums, and such
ogler provisions as may be found to be reasonable and practicable
may be provided for in the policy of insurance from time to time by
regulations promulgated by the Administrator.
? 707. Dividends to pay premiums
Until and unless the Veterans' Administration has received from
the insured a request in writing for payment in cash, any dividend
accumulations and unpaid dividends shall be applied in payment of
premiums becoming due on insurance subsequent to the date the
dividend is payable after January 1, 1952.
? 708. Premium payments
The Administratoi shall, by regulations, prescribe the time and
method of payment of the premiums on insurance, but payments of
premiums in advance shall not be required for periods of more than
one month each, and may at the election of the insured be deducted
from his active-service pay or be otherwise made An amountequal
to the first premium due under a National Service Life Insurance
policy may be advenced from current appropriations for active-
service pay to any person in the active service in the Army, Navy,
Air Force, Marine Corps, or Coast Guard, which amount shall con-
stitute a lien upon any service or other pay accruing to the person
for; whom such advance was made and shall be collected therefrom
Approved For Relea se9s0 lelf/ my l~ i0ft77 edW6RN n6O 1@00 er shallAbe by of such ad. ny
 amount so advanced in excess of available service or other pay shall
constitute a lien on the policy within the provisions of section 3101(b)
of this title.
? 709. Effective date of insurance
Insurance may be made effective, as specified in the application,
not later than the first day of the calendar month following the date
of application therefor, but the United States shall not be liable
thereunder for death occurring before such effective date.
? 710. Incontestability
Subject to the provisions of section 711 of this title all contracts or
policies of insurance heretofore or hereafter issued, reinstated, or con-
verted shall be incontestable from the date of issue, reinstatement, or
conversion except for fraud, nonpayment of premium, or on the
ground that the applicant was not a member of the military or naval
forces of the United States. However, in any case in which a contract
or policy of insurance is canceled or voided after March 16, 1954,
because of fraud, the Administrator shall refund to the insured, if
living, or if deceased, to the person designated as beneficiary (or if
none survives, to the estate of the insured) all money, without interest,
paid as premiums on such contract or policy for any period subsequent
to two years after the date such fraud induced the Veterans' Admin-
istration to issue, reinstate, or convert such insurance less any divi-
dends, loan, or other payment made to the insured under such contract
or policy.
? 711. Forfeiture
Any person guilty of mutiny, treason, spying, or desertion, or who,
because of conscientious objections, refuses to perform service in the
Armed Forces of the United States or refuses to wear the uniform of
such force, shall forfeit all rights to National Service Life Insurance.
No insurance shall be payable for death inflicted as a lawful punish-
ment for crime or for military or naval offense, except when inflicted
by an enemy of the United States; but the cash surrender value, if
any, of such insurance on the date of such death shall be paid to the
designated beneficiary, if living, or otherwise to the beneficiary or
beneficiaries within the permitted class in accordance with the order
specified in section 716 (b) of this title.
? 712. Total disability waiver
(a) Upon application by the insured and under such regulations
as the Administrator may promulgate, payment of premiums on
insurance may be waived during the continuous total disability of the
insured, which continues or has continued for six or more consecutive
months, if such disability bean (1) after the date of his application
for insurance, (2) while the insurance was in force under premium-
paying conditions, and (3) before the insured's sixty-fifth birthday.
Notwithstanding any other provision of this chapter, in any case in
which the total disability of the insured commenced on or after his
sixtieth birthday but before his sixty-fifth birthday, the Adminis-
trator shall not grant waiver of any premium becoming due prior to
January 1, 1965.
(b) The Administrator, upon any application made after August 1,
"1 r~ iv~r ~f~p,~~grgg~ y p pan
Approved Fin'e` ai Pei'[i4Aft4ipC1~'t7it?1~dt~i'dt PA I tSf K i ca-
 Approved For Release 2003/1'j404 :(fRhR lYIR 1N~f41YCl#l[vCPl 3 tltr 1Y3NJ `Z3T71Ft21MED ,5Exv>cEs
tion for the same, except as provided in this section. Any premiums
paid for months during which waiver is effective shall be refunded.
The Administrator shall provide by regulations for examination or
reexaminat.on of an insured claiming benefits under this section, and
may deny benefits for failure to cooperate. If it is found that an
insured is no longer totally disabled, the waiver of premiums shall
cease as of the date of such finding and the policy of insurance may
be continued by payment of permiums as provided in said policy.
In any case in which the Administrator finds that the insured's failure
to make timely application for waiver of premiums or his failure to
submit satisfactory evidence of the existence or continuance of total
disability was due to circumstances beyond his control, the Adminis-
trator may grant waiver or continuance of waiver of premiums.
(c) If the insured dies without filing application for waiver, the
beneficiary, within one year after the death of the insured, or, if the
beneficiary is insane or a minor, within one year after removal of
such legal disability, may file application for waiver with evidence
of the insured's right to waiver under this section. ! Premiums rates
shall be cal-ulated without charge for the cost of waiver of premiums
provided ir. this section and no deduction from benefits otherwise
payable shell be made on account thereof.
(d) In any case in which an insured has been denied or would
have been Jellied premium waiver under section 602(n) of the Na-
tional Service Life Insurance Act of 1940 or this section solely because
he became totally disabled between the date of valid, application for
insurance and the subsequent effective date thereof, and in which it
is shown that (1) the total disability was incurred in line of duty
between October 8, 1940, and July 31, 1946, inclusive, or June 27,
1950, and April 30, 1951, inclusive, and (2) the insured remained
continuously so totally disabled to the date of death or the date of
enactment of this subsection, whichever is earlier, the Administrator
may grant'vaiver of premiums from the beginning of and during the
continuous total disability of such insured. Application for waiver
of premiums under this subsection must be filed by the insured or,
in the event of his death, by the beneficiary within two years after the
date of enactment of this subsection, except that if the insured or
the beneficiary be insane or a minor within the two-year period,
application for such waiver may be filed within twoyears after re-
moval of such legal disability, or if an insane insured shall die be-
fore the removal of the disability, application may be filed by the
beneficiary within two years after the insured's death No insurance
shall be placed in force under this subsection in any case in which
there was an award of benefits under the Servicemen's Indemnity Act
of 1951 or of gratuitous insurance under section 722(b) of this title.
The amours; of insurance placed in force hereunder together with any
other United States Government life insurance or national service
life insurance in force at the time of death, or at the time of the in-
sured's application for waiver hereunder, may not exceed $10,000 and
shall be red-iced by the amount of any gratuitous insurance awarded
under the National Service Life Insurance Act of 1990. Waiver of
premiums under this subsection shall render the insurance nonpar-
ticipating during the period such premium waiver is in effect. The
o f i e ' id as a result of this
Approved For Release 2003/5e X611A `~ Q
 GROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES 25
Approved Fo%f7e~pa1%3eJoie?slx months4Pota1 disati~6R000500210005-9
Whenever premiums are not waived under section 712 of this title
solely because the insured died prior to the continuance of total
disability for six months, and proof of such facts, satisfactory to the
Administrator, is filed by the beneficiary with the Veterans' Admin-
istration within one year after the insured's death, his insurance shall
be deemed to be in force at the date of his death, and the unpaid
premiums shall become a lien against the proceeds of his insurance.
f the beneficiary is insane or a minor, proof of such facts may be
filed within one year after removal of such legal disability.
? 714. Statutory total disabilities
Without prejudice to any other cause of disability, the permanent
loss of the use of both feet, of both hands, or of both eyes, or of one
foot and one hand, or of one foot and one eye, or of one hand and
one eye, or the total loss of hearing of both ears, or the organic loss
of speech, shall be deemed total disability for insurance purposes.
? 715. Total disability income provision
The Administrator shall, except as hereinafter provided, upon
application by the insured and proof of good health satisfactory to
the Administrator and payment of such extra premium as the Admin-
istrator shall prescribe, include in any National Service Life Insur-
ance policy on the life of the insured (except a policy issued under
section 620 of the National Service Life Insurance Act of 1940, or sec-
tion 722 of this title) provisions whereby an insured who is shown
to have become totally disabled for a period of six consecutive months
or more commencing after the date of such application and before
attaining the an of sixty-five and while the payment of any premium
is not in default, shall be paid monthly disability benefits from the
first day of the seventh consecutive month of and during the continu-
ance offsuch total disability of $10 for each $1,000 of such insurance
in effect when such benefits become payable. The total disability
provision authorized under this section shall not be issued unless ap-
plication therefor is made either prior to the insured's fifty-fifth
birthday, or before the insured's sixtieth birthday and prior to Janu-
ary 1, 1966. The total disability provision authorized under this
section shall not be added to a policy containing the total disability
coverage heretofore issued under section 602(v) of the National Serv-
ice Life Insurance Act of 1940, or the provisions of this section as in
effect before January 1, 1965, except upon surrender of such total
disability coverage, proof of good health, if required, satisfactory to
the Administrator, and payment of such extra premium as the Admin-
istrator shall determine is required in such cases. Participating poli-
cies containing additional provisions for the payment of disability
benefits may be separately classified for the purpose of dividend dis-
tribution from otherwise similar policies not containing such benefits.
? 716. Insurance which matured before August 1, 1946
(a) Insurance which matured before August 1, 1946, is payable in
the following manner:
thirty years of ageeatthe time of pmaturity, ayment is inst oahu hundred was under
forty equal monthly installments.
H. eel,seopb8t11 4 : CIA-RDP67B00446R000500210005-9
Approved For Releaase ZU
 26 GROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
(2) If the beneficiary to whom payment is first made was thirty
or mor'3 years of age at the time of maturity, in equal monthly
installments for one hundred and twenty months certain, with
such payments continuing during the remaining lifetime of such
bond&c'ary.
(3) ]f elected by the insured or a beneficiary entitled to make
such a x election under prior provisions of law, as a refund life
income in monthly installments payable for such period certain
as may be required in order that the sum of the installments cer-
tain, including a last installment of such reduced amount as may
be nee 3ssary, shall equal the face value of the contract, less any
indebtidness, with such payments continuing throughout the life-
time of the first beneficiary. A refund life income optional settle-
ment is not available in any case in which such settlement would
result n payments of installments over a shorter period than one
hundred and twenty months. If the mode of payment is changed
to a refund life income in accordance with prior provisions saof
install-
law, after pa yment has commenced, payment
ments will be adjusted as of the date of maturity of such policy
with credit being allowed for payments previougly made on the
insurance.
(b) Such insurance shall be payable only to a widow, widower,
chI'ld, parent, brother or sister of the insured. Any installments cor-
tain of such insurance remaining unpaid at the death of any beneficiary
shall be paid in equal monthly installments in an amount equal to the
monthly installments paid to the first beneficiary, to the person or
persons then in being within the following classes, and in the order
named, unless designated by the insured in a different order:
(1) To the widow or widower of the insured, if living.
(2) If no widow or widower, to the child or children of the
insured, if living, in equal shares.
(3) If no widow, widower, or child, to the parent or parents
of th< insured who last bore that relationship, if living, in equal
share;,.
(4) If no widow, widower, child, or parent, to the brothers
and sisters of the insured, if living, in equal shares.
(c) The provisions of this section shall not be construed to enlarge
the classes of beneficiaries heretofore authorized under section 602
(d) of the National Service Life Insurance Act of 1940, for payment
of gratnitins insurance.
(d) If r o beneficiary of insurance which matured' before August. 1,
1946, was designated by the insured or if the designated beneficiary
did not survive the insured, the beneficiary shall be determined in
accordance 'with the order specified in subsection (1:i) and the insur-
ance shall be payable in equal monthly installments in accordance
with subsection (a). The right of any beneficiary to payment of any
installments of such insurance shall be conditioned upon his or her
being alive to receive such payments. No person shall have & vested
right to any installment or installments of any such insurance and
any installinents not paid to a beneficiary during such beneficiary's
lifetime Ehall be paid to the beneficiary or beneficiaries within the
permitted claw: next entitled to priority, as provided in subsection (b).
(e) No installments of insurance which Inatured before August 1,
1946, shall bo aid to the heirs or legal representatives as such of the
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For R%k eI23114g{ lioC,i4ADR,7[ #6%WgP N005
insured or of any beneficiary, and if no person within the permitted
class survives to receive the insurance or any part thereof no payment
of the unpaid installments shall be made, except that if the reserve of
a contract of converted National Service Life Insurance, together
with dividends accumulated thereon, less any indebtedness under such
contract, exceeds the aggregate amount paid to beneficiaries, the excess
shall be paid to the estate of the insured unless the estate of the insured
would escheat under the laws of his place of residence; in which event
no payment shall be made. When the amount of an individual
monthly payment of such insurance is less than $5, such amount ma ,
in the discretion of the Administrator, be allowed to accumulate with-
out interest and be disbursed annually.
(f) Any payments of insurance made to a person, represented by
the insured to be within the permitted class of beneficiaries, shall be
deemed to have been properly made and to satisfy fully the obligation
of the United States under such insurance policy to the extent of such
payments.
? 717. Insurance maturing on or after August 1, 1946
(a) The insured shall have the right to designate the beneficiary
or beneficiaries of insurance maturing on or after August 1, 1946, and
shall, subject to regulations, at all times have the right to change the
beneficiary or beneficiaries of such insurance without the consent of
such beneficiary or beneficiaries.
(b) Insurance maturing on or after August 1, 1946, shall be pay-
able in accordance with the following optional modes of settlement:
(1) In one sum.
(2) In equal monthly installments of from thirty-six to two
hundred and forty in number, in multiples of twelve.
(3) In equal monthly installments for one hundred and twenty
months certain with such payments continuing during the re-
maining lifetime of the first beneficiary.
(4) As a refund life income in monthly installments payable
for such period certain as may be required in order that the sum
of the installments certain, including a last installment of such
reduced amount as may be necessary, shall equal the face value of
the contract, less any indebtedness, with such payments continu-
ing throughout the lifetime of the first beneficiary; however, such
optional settlement shall not be available in any case in which
such settlement would result in payments of installments over a
shorter period than one hundred and twenty months.
(c) Unless the insured elects some other mode of settlement, such
insurance shall be payable to the designated beneficiary or beneficiaries
in thirty-six equal monthly installments, The first beneficiary may
elect to receive payment under any option which provides for pay-
ment over a longer period of time than the option elected by the in-
aured, or if no option has been elected by the insured, in excess of
thirty-six months. If the option selected requires payment to anyone
beneficiary of monthly installments of less than $10, the amount pay-
able to such beneficiary shall be paid in such maximum number of
monthly installments as are a multiple of twelve as will provide a
monthly installment of not less than $10. If the present value of the
amount pa able at the time any person initially becomes entitled to
payment thereof is not sufficient to pay at least twelve monthly in-
stallments of not less than $10 each, such amount shall be payable
 Approved For Release 200311 1:A4: SERVICES
in one sum. Options (3) and (4) shall not be available if any firm,
corporation, legal entity (including the estate of the insured), or
trustee is beneficiary, or in any case in which an endowment contract
matures by reason of the completion of the endowment period.
(d) If thE: beneficiary of such insurance is entitled to a lump-sum
settlement but elects some other mode of settlement and dies before
receiving al',. the benefits due and payable under such mode of settle-
ment, the -)resent value of the remaining unpaid amount shall be
payable to the estate of the beneficiary. If no beneficiary is desig-
nated by the insured, or if the designated beneficiary does not survive
the insured or if a designated beneficiary not entitled to a lump-sum
settlement survives the insured, and dies before receiving all the
benefits du'a and payable, then the commuted value of the remaining
unpaid insurance (whether accrued or not) shall be paid in one sum
to the estate of the insured. In no event shall there be any payment
to the estate of the insured or of the beneficiary of any sums unless
it is shown that any sums paid will not escheat.
?718. Assignments
(a) Assignments of all or any part of the beneficiary's interest may
be made by a designated beneficiary to a widow, widower, child, father,.
mother, grandfather, grandmother, brother, or sister of the insured,
when the designated contingent beneficiary, if any, oins the bone-
ficiary in the assignment, and if the assignment is delivered to the
Veterans' Administration before any payments of the insurance shall
have been made to the beneficiary. However, an interest in an annuity,
when assi?ned, shall be payable in equal monthly installments in such
multiple of twelve as most nearly equals the number of installments
certain under such annuity, or in two hundred and forty installments,
whichever is the lesser. The provisions of this subsection shall not be
applicable to insurance maturing on or after the date of enactment of
this sentence.
(b) Except as to insurance granted under the provisions of section
722(b) o this title, any person to whom insurance maturing on or
after the date of enactment of this sentence is payable may assign all
or any portion of his interest in such insurance to a 'widow, widower,
child, father, mother, grandfather, grandmother,: brother, or sister
of the imaured when the designated contingent beneficiary, if any, joins
the beneficiary in the assignment. Such joinder shall not be required
in any case in which the insurance proceeds are payable in a lump
sum.
? 719. National Service Life Insurance appropriation
(a) The National Service Life Insurance appropriation is contin-
ued and there is authorized to be appro riated, oust of any money in
the Treasury not otherwise appropriated, such sums as may be neces-
sary to parry out the provisions of this chapter and the provisions here-
tofore prescribed in the National Service Life Insurance Act of 1940,
or related Acts, for the payment of liabilities under National Service
Life Insurance. Payment from this appropriation shall be made
upon and in accordance with awards by the Administrator.
(b) .1D. premiums heretofore and hereafter paid on insurance issued
or reinstated under subsections 602(c)(2) and 602(v)(1) of the
National Service Life Insurance Act of 1940 where the requirement of
good health was waived under such subsections because of a service-
incurred injury or disability shall be credited directly to the National
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Rele j2GQA14$ft fFP??M004AffiQ 5 QQQ5-929
Service Life Insurance appropriation and any payments of benefits
heretofore and hereafter made on such insurance shall be made directly
from such appropriation.
? 720. National Service Life Insurance Fund
(a) The National Service Life Insurance Fund heretofore created
in the Treasury is continued as a permanent trust fund. Except as
otherwise provided in this chapter, all premiums paid on account of
National Service Life Insurance shall be deposited and covered into
the Treasury to the credit of such fund, which, together with interest
earned thereon, shall be available for the payment of liabilities under
such insurance, including payment of dividends and refunds of un-
earned premiums. Payments from this fund shall be made upon and
in accordance with awards by the Administrator.
(b) The Administrator is authorized to set aside out of such fund
such reserve amounts as may be required under accepted actuarial
principles to meet all liabilities under such insurance; and the Secre-
tary of the Treasury is authorized to invest and reinvest such fund, or
any part thereof, in interest-bearing obligations of the United States
or in obligations guaranteed as to principal and interest by the United
States, and to sell such obligations for the purposes of such fund.
? 721. Extra hazard costs
(a) The United States shall bear the excess mortality cost and the
cost of waiver of premiums on account of total disability traceable to
the extra hazard of military or naval service, as such hazard may be
determined by the Administrator.
(b) Whenever benefits under insurance become payable because of
the death of the insured as the result of disease or injury traceable to
the extra hazard of military or naval service, as such hazard may be
determined by the Administrator, the liability for payment of such
benefits shall be borne by the United States in an amount which, when
added to the reserve of the policy at the time of death of the insured
will equal the then value of such benefits under such policy. Where
life contingencies are involved in the calculation of the value of
such benefits of insurance heretofore or hereafter matured, the cal-
culation of such liability or liabilities shall be based upon such mortal-
ity table or tables as the Administrator may prescribe with interest
at the rate of 3 per centum per annum. The Administrator shall
transfer from time to time from the National Service Life Insurance
appropriation to the National Service Life Insurance Fund such
sums as may be necessary to carry out the provisions of this section.
(c) Whenever the premiums under insurance are waived because
of the total disability of the insured as the result of disease or injury
traceable to the extra hazard of military or naval service, as such
hazard may be determined by the Administrator, the premiums so
waived shall be paid by the United States and the Administrator shall
transfer from time to time an amount equal to the amount of such
premiums from the National Service Life Insurance appropriation
to the National Service Life Insurance Fund.
(d) Whenever benefits under the total disability income provision
become, or have become, payable because of total disability of the
insured as a result of disease or injury traceable to the extra hazard
of the military or naval service, as such hazard may be determined
by the Administrator, the liability shall be borne by the United States,
and the Administrator shall transfer from the National Service Life
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/tV04 b RL~R6~0AA51 1l MED SERVICES
Insurance appropriation to the National Service Life Insurance Find
from time to time any amounts which become or have become, payable
to the insurec. on account of such total disability, and to: transfer from
the National Service Life Insurance Fund to the National Service
Life Insurance appropriation the amount of the reserve held on ac-
count of the total disability benefit. When a person receiving such
payments on account of total disability recovers from such disability,
and is then entitled to continue protection under the total disability
income provision, the Administrator shall transfer to the National
Service Life Insurance Fund a sum sufficient to set up the then re-
quired reserve on such total disability benefit.
(e) A.n disability for which a waiver was required as a condition
to- tenderingya person a commission under Public Law' 816, Seventy-
seventh Congress, shall be deemed to be a disability resulting from
an injury or disease traceable to the extra hazard of military or naval
service for the purpose of applying this section.
722. Service disabled veterans' insurance
(a) Any person who is released from active military, naval, or air
service, under other than dishonorable conditions on or after April
25, 1951, ar.d is found by the Administrator to be suffering from a
disability or disabilities for which compensation would be payable
if 10 per centum or more in degree and except for which such person
would be insurable according to the standards of good health estab-
lished by tl.e Administrator, shall, upon application in writing made
within one year from the date service-connection of such disability is
determined by the Veterans' Administration and payment of pre-
miums as provided in this subchapter, be granted insurance by the
United Staves against the death of such person occurring while such
insurance is in force. If such a person is shown by evidence satis-
factory to the Administrator to have been mentally incompetent dur-
ing any pa,t of the one-year period, application for insurance under
this section may be filed within one year after a guardian is appointed
or within one year after the removal of such disability as determined
by the Administrator, whichever is the earlier date. If the guardian
was appoi ited or the removal of the disability occurred before
January 1, 1959, application for insurance under this section may be
made wrthn one year after that date. 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 (1) the premium rates for such insurance shall be based on
the Commissioners 1941 Standard Ordinary Table of Mortality and
interest at the rate of 2;; per centum per annum; (2) all cash, loan,
paid-up, and extended values shall be based upon the Commissioners
1941 Standard Ordinary Table of Mortality and interest at the rate
of 2;a per centum per annum; (3) all settlements on policies involv-
ing annuities shall be calculated on the basis of The Annuity Table
for 1949, and interest at the rate of 23; per centum per annum; (4)
insurance granted under this section shalt be on a nonparticipating
basis and all premiums and other collections therefor shall be credited
directly t a revolving fund in the Treasury of the United States,
and any r ayments on such insurance shall be made directly from such
fund. Alipropriations to such fundare hereby authorized. As to
insurance issued under this section, waiver of premiums pursuant to
section 602(n) of the National Service Life Insurance Act of 1940
 CROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES 31
Approved For Release 2003/f1 104 ; PIA-IspP67B00446R000500210005-9
an section 12 o t is tit e s a not be denied on the ground that
the service-connected disability became total before the effective date
of such insurance.
(b)(1) Any person who, on or after April 25, 1951, was other-
wise qualified for insurance under the provisions of section 620 of
the National Service Life Insurance Act of 1940, or under subsection
(a) of this section, but who did not apply for such insurance and
who is shown by evidence satisfactory to the Administrator (A) to
have been mentally incompetent from a service-connected disability,
(i) at the time of release from active service, or (ii) during any part
of the one-year period from the date the service connection of a dis-
ability is first determined by the Veterans' Administration, or (iii)
after release from active service but is not rated service-connected
disabled by the Veterans' Administration until after death; and (B)
to have remained continuously so mentally incompetent until date of
death; and (C) to have died before the appointment of a guardian,
or within one year after the appointment of a guardian- shall be
deemed to have applied for and to have been granted such insurance,
as of the date of death, in an amount which, together with any other
United States Government or National Service fife insurance in force,
shall aggregate $10,000. The date to be used for determining whether
such person was insurable according to the standards of good health
established by the Administrator, except for the service-connected dis-
ability, shall be the date of release from active service or the date the
person became mentally incompetent, whichever is the later.
(2) Payments of insurance granted under subsection (b)(1) of this
section shall be made only to the following beneficiaries and in the order
named-
(A) to the widow or widower of the insured, if living and while
unremarried;
(B) if no widow or widower entitled thereto, to the child or
children of the insured, if living, in equal shares;
(C) if no widow or widower or child entitled thereto, to the
parent or parents of the insured who last bore that relationship,
if living, in equal shares.
(3) No application for insurance payments under this subsection
shall be valid unless filed in the Veterans' Administration within two
years after the date of death of the insured or before January 1, 1961,
whichever is the later, and the relationship of the applicant shall be
proved as of the date of death of the insured by evidence satisfactory
to the Administrator. Persons shown by evidence satisfactory to the
Administrator to have been mentally or legally incompetent at the
time the right to apply for death benefits expires, may make such
application at any time within one year after the removal of such
disability.
(4) Notwithstanding the provisions of section 717 of this title,
insurance under this subsection shall be payable at the election of the
first beneficiary in 240 equal monthly installments or under the options
specified in section 717(b) (3) or (4) of this title. Any installments
certain of insurance remaining unpaid at the death of any beneficiary
shall be paid in equal monthly installments in an amount equal to the
monthly installments paid to the first beneficiary, to the person or
persons then in being within the classes specified in subsection (b)(2)
of this section and in the order named.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 32 GRO UP LIFE INSURANCE FOR THE UNIFORMED SERVICES!
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
(5) The right of any beneficiary to payment of any installments
shall be ccnditioned upon his or her being alive to receive such pay-
ments. No person shall have a vested right to any installment or
installments of any such insurance and any installments not paid. to
a beneficisrry during such beneficiary's lifetime shall be paid to the
beneficiary or beneficiaries within the permitted class next entitled
to priority, as provided in subsection (b)(2) of this section. No
installments of such insurance shall be paid to the heirs or legal repre-
sentatives as such of the insured or of any beneficiary, and if no person
within the permitted class survives to receive the insurance or any part
thereof no payment of the unpaid installments shall be made.
? 723. Veterans' special term insurance
(a) Insurance heretofore granted tinder the provisions of section
621 of the National Service Life Insurance Act of 1'940, against the
death of the policyholder occurring while such insurance is in force,
is subject to the same terms and conditions as are contained in stand-
aid policies of National Service Life Insurance on the five-year level
premium term plan except (1) such insurance may not be exchanged
for or converted to insurance on any other plan; (2) the premium
rates for such insurance shall be based on the Commissioners 1941
Standard Ordinary Table of Mortality and interest at the rate of
2); per ceatunu per annum; (3) 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% per centum per annum; (4) such
insurance and any total disability provision added thereto shall be on
a nonparticipating basis and all premiums and other collections there-
for shall be credited to a revolving fund in the Treasury of the United
States and the payments on such term insurance and any total dis-
ability provision added thereto shall be made directly' from such fund.
Appropru.tions to such fund are hereby authorized.
(b) Any term insurance heretofore issued under section 621 of the
National Service Life Insurance Act of 1940, may be converted to a
permanent plan of insurance or exchanged for a policy of limited con-
vertible five-year level premium term insurance issued under this sub-
section. Insurance issued under this subsection shall be issued upon
the same berms and conditions as are contained in the standard policies
of National Service Life Insurance except (1) after September 1, 1960,
limited convertible term insurance may not be issued or renewed on
the term plan after the insured's fiftieth birthday; (2) the premium
rates for such limited convertible term or permanent plan insurance
shall be based on table X-18 (1950-54 Intercompany tepTable of Mor-
tality) and interest at the rate of 2% per m per ; (3) an
settlements on policies involving annuities on insurance issued under
this subs action shall be calculated on the basis of The Annuity Table
for 1949, and interest at the rate of 23 per contum per annum; (4) all
cash, loan, paid-up, and extended values, and, except. as otherwise pro-
vided in this subsection, all other calculations in connection with insur-
ance issued under this subsection shall be based on table X-18 (1950-54
Intercompany Table of Mortality) and interest at the rate of 23 per
centum jer annum; (5) insurance and any total disability provision
added thereto issued under this subsection shall be on a nonparticipat-
ing basis and all premiums and other collections therefor shall be
credited directly to the revolving fund referred to in subsection (a)
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Rel i2MlfNQ4iuGbt-Rd3PORBODMFM005 JO2't00t5-933
and payments on such insurance and any total disability provision
added thereto shall be made directly from such fund.
(c) The Administrator is authorized to invest in, and the Secretary
of the Treasury is authorized to sell and retire, special interest-bearing
obligations of the United States for the account of the revolving fund
with a maturity date as may be agreed upon by the Administrator
and Secretary. The rate of interest on such obligations shall be fixed
by the Secretary of the Treasury at a rate equal to the rate of interest,
computed as of the end of the month preceding the date of issue of
such obligations, borne by all marketable interest-bearing obligations
of the United States then forming a part of the public debt that are
not due or callable until after the expiration of five years from the
date of original issue; except that where such average rate is not a
multiple of one-eighth of 1 per centum, the rate of interest of such
obligations shall be the multiple of one-eighth of 1 per centum nearest
such average rate.
(d) The Administrator shall determine the amount in the revolv-
ing fund referred to in subsection (a) of this section which is in
excess of the actuarial liabilities of such fund including contingency
reserves. Such excess shall be paid in cash as a special dividend,
without interest, subject to the conditions provided in this subsection.
The Administrator shall determine the administrative cost to the
Veterans' Administration of paying such dividend, which cost shall
be deducted from the excess and transferred to the appropriations
"General operating expenses-Veterans' Administration". Insur-
ance issued under section 621 of the National Service Life Insurance
Act of 1940 or converted or exchanged tinder subsection (b) of this
section, which was in force by waiver or timely payment of premiums
or as paid-up or extended term insurance during one of the premium
months beginning with the month of November 1960 and ending with
the month of January 1961, may be eligible for the special dividend,
subject to such conditions, other than specified in this subsection, as
the Administrator shall determine to be reasonable and practicable.
The dividend shall be paid as soon as practicable after whichever of
the following dates is the latest:
(1) the date of enactment of this subsection in case of insur-
ance heretofore converted or exchanged under subsection (b) of
this section;
(2) the date insurance issued under section 621 is converted
or exchanged under subsection (b) of this section if such con-
version or exchange is made within two years after the date of
enactment of this subsection; or
(3) the date of death of the policyholder where insurance
issued under section 621 is not converted or exchanged and such
death occurs on or after the premium due date in November 1960
and before the expiration of two years after the date of enactment
of this subsection.
(e) After March 1, 1961, the Administrator shall from time to
time transfer from the revolving fund referred to in subsection (a) of
this section to general fund receipts in the Treasury such amounts as
he determines are in excess of the actuarial liabilities of the fund
including contingency reserves.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release 2003/1 1IQ4 : &6lQQI7PAMtR0#RA0P%rr&MEn sEftvicES
? 724. In-oervice waiver of premiums
(a) Waiver of all premiums on five-year level premium term insur-
ance and that portion of any permanent insurance premiums repre-
senting the cost of the pure insurance risk, as determined by the
Administrator, granted on National Service Life Insurance or United
States Government life insurance under section 622 of the National
Service Life Insurance Act of 1940 and in effect on January 1, 1959,
shall, unless canceled, continue in effect according to the provisions
of such section for the remainder of the insured's continuous active
service and for one hundred and twenty days thereafter. Such pre-
mium waiver renders the contract of insurance nonparticipating
during the period the waiver is in effect.
(b) Whenever benefits become payable because of the maturity of
such insurance while under the premium waiver continued by this
section, liability for payment of such benefits shall be borne by the
United States in an amount which, when added to any reserve of the
policy at the time of maturity, will equal the e-then value of such
benefits under such policy. Where life contingencies are involved in
the calculation of the value of such benefits, the calculation of such
liability or liabilities shall be based upon such mortality table or
tables as the Administrator mayproscribe with interest at the rate
of 2;4 per centum per annum as to insurance issued under sections
620 and 621 of the National Service Life Insurance Act of 1940, at
the rate of 3 per centum per annum as to other National Service Life
Insurance, and 3)z per centum per annum as to United States Gov-
ernment life insurance. The Administrator shall transfer from time
to time frcm the National Service Life Insurance appropriation to
the National Service Life Insurance Fund and from the military and
naval insurance appropriation to the United States Government Life
Insurance Jund such sums as may be necessary to carry out the
provisions of this section.
? 725. Limited period for acquiring insurance
(a) Any person (other than a person referred to in. subsection (f)
of this sect on) heretofore eligible to apply for National Service Life
Insurance after October 7, 1940, and before January 1, 1957, who
is found by the Administrator to be suffering (1) from a service-
connected disability or disabilities for which compensation would be
payable if 10 per centum or more in degree and except for which such
person would be insurable according to the standards of good health
established by the Administrator; or (2) from a non-service-connected
disability which renders such person uninsurable according to the
standards of good health established by the Administrator and such
person establishes to the satisfaction of the Administrator that he is
unable to obtain commercial life insurance at a substandard rate, shall,
upon application in writing made within one year after the effective
date of this section, compliance with the health requirements of this
section and payment of the required premiums, be granted insurance
under this section.
(b) If, not withstanding the applicant's service-connected disability,
he is insurable according to the standards of good health established
by the Ado inistrator, the insurance granted under this section shall
be issued upon the same terms an co } t' i as are contained in
Approved For Release 2003/1119d44a:nQLAfFPR4~$?Q481~ Q l+ b insurance except (1)
five-year level premium term insurance may not be issued; (2) the net
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
GROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES 35
premium rates shall be based on the 1958 Commissioners Standard
Ordinary Basic Mortality Table, increased at the time of issue by
such an amount as the Administrator determines to be necessary for
sound actuarial operations, and thereafter such premiums may be
adjusted as the Administrator determines to be so necessary but at
intervals of not less than two years; (3) an additional premium to
cover administrative costs to the Government as determined by the
Administrator at times of issue shall be charged for insurance issued
under this subsection and for any total disability income provision
attached thereto, and thereafter such costs may be adjusted as the
Administrator determines to be necessary but at intervals of not less
than five years; (4) all cash, loan, extended and paid-up insurance
values shall be based on the 1958 Commissioners Standard Ordinary
Basic Mortality Table; (5) all settlements on policies involving annui-
ties shall be calculated on the basis of The Annuity Table for 1949;
(6) all calculations in connection with insurance issued under this
subsection shall be based on interest at the rate of 3% per centum
per annum; (7) the insurance shall include such other changes in
terms and conditions as the Administrator determines to be reasonable
and practicable; (8) the insurance and any total disability income
provision attached thereto shall be on a nonparticipating basis and
all premiums and other collections therefor shall be credited to a
revolving fund established in the Treasury of the United States and
the payments on such insurance and total disability income provision
shall be made directly from such fund.
(c) If the applicant's service-connected disability or disabilities
render him uninsurable according to the standards of good health
established by the Administrator, or if the applicant has a non-
service-connected disability which renders him uninsurable according
to the standards of good health established by the Administrator and
such person establishes to the satisfaction of the Administrator that he
is unable to obtain commercial life insurance at a substandard rate and
such uninsurability existed as of the date of approval of this section,
the insurance granted under this section shall be issued upon the same
terms and conditions as are contained in standard policies of National
Service Life Insurance, except (1) five-year level premium term in-
surance may not be issued; (2) the premiums charged for the insurance
issued under this subsection shall be increased at the time of issue by
such an amount as the Administrator determines to be necessary for
sound actuarial operations and thereafter such premiums may be
adjusted from time to time as the Administrator determines to be
necessary; for the purpose of any increase at time of issue or later
adjustment the service-connected group and the non-service-connected
group may be separately classified; (3) an additional premium to
cover administrative costs to the Government as determined by the
Administrator at the time of issue shall be charged for insurance issued
under this subsection and for any total disability income provision
attached thereto (for which the insured may subsequently become eli-
gible) and thereafter such costs may be adjusted as the Administrator
determines to be necessary but at intervals of not less than five years
and for this purpose the service-connected and non-service-connected
can be separately classified; (4) the insurance and any total disability
income provision attached thereto shall be on a nonparticipating basis;
(5) all settlements on policies involving annuities shall be calculated
Approved Fo492 }@ '~d1 3~ /d~#'P A-F @J ~ ~b~ 1 ~)0 09 ~1Elb~S? in
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
I 1 36 GROUP :1IFE INSURANCE FOR THE UNIFORMED SERVICES
connection wi';h insurance issued under this subsection shall be based
on interest at the rate of 3'%s per centum per annum (7) the insurance
shall include sach other changes in terms and conditions as the Admin-
istrator deterrines to be reasonable and practicable; (8) all permiums
and other collections on the insuranca and any total disability income
provision attached thereto shall be credited to the National Service
Life Insuranc: appropriation, and the payments on such insurance and
total disability Income provision shall be made directly from such
appropriation. Appropriations necessary to carry out the provisions
of this subsection are hereby authorized.
(d)(1) There is authorized to be appropriated -such sums as may
be required t3 provide capital for the revolving fund tot carry out the
purpose of subsection (b) of this section. Such appropriations shall
be advanced to the revolving fund as needed and shall bear interest
as determined by the Secretary of the Treasury, taking into considera-
tion the ave;rage yield on all marketable interest-bearing obligations
of the United States of comparable maturities then forpaing a part of
the public debt and shall be repaid to the Treasury over a reasonable
period of time.
(2) The Administrator is authorized to set aside out of the. revolv-
ing fund established under subsection (b) of this section such reserve
amounts as may be required under accepted actuarial, principles to
meet all liabilities on insurance issued under subsection; (b) of this see-
tion and any total disability income provision attached thereto. The
Secretary of the Treasury is authorized to invest in and to sell and re-
tire special interest-bearing obligations of the United States for the ac-
count of the revolving fund. Such obligations issued for this purpose
shall have maturities fixed with due regard for the needs of the fund
and shall b3ar interest at a rate equal to the average market yield
(computed by the Secretary of the Treasury on the basis of market
quotations as of the end of the calendar month next preceding the date
of issue) on all marketable interest-bearing obligations of the United
States then forming a part of the public debt which are not due or
callable until after the expiration of four years from the end of such
calendar month; except that where such average market yield is not
a multiple 3f one-eighth of 1 per centum, the rate of interest of such
obligation shall he the multiple of one-eighth of 1 per centum nearest
such market yield.
(3) Notwithstanding the provisions of section 782 of this title, the
Administre for shall, from time to time, determine the administrative
costs to tho Government which in his judgment are properly, allocable
to insurance issued under this section and any total disability income
provision s ttached thereto, and shall transfer from the revolving fund,
or the National Service Life Insurance appropriation, as appropriate,
the amount of such cost allocable to the Veterans' Administration. to
the appropriation "General Operating Expenses, Veterans' Adminis-
tration," and the remainder of such cost to the general fund receipts in
the Treas iry. The initial administrative costs of issuing insurance
under thie section and any total disability income provision attached
thereto shall be so transferred over such period of trine as the Admin-
istrator determines to be reasonable and practicable.
(e) Notwithstanding the provisions of section 782 of this title, a
medical examination (including any supplemental examination or
tests) when required of an applicant for issuance of insurance under
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 this section or any total disability income provisions attached thereto
shall be at the applicant's own expense by a duly licensed physician.
(f) No insurance shall be granted under this section to any person
referred to in section 107 of this title or to any person while on active
duty or active duty for training under a call or order to such duty for
a period of thirty-one days or more.
Subchapter IT-United States Government Life Insurance
? 740. Definition
For the purposes of this subchapter, the term "insurance" means
United States Government life insurance.
? 741. Amount of insurance
United States Government life insurance shall be issued against
death or total permanent disability in any multiple of $500 and not
less than $1,000 or more than $10,000, No person may carry a com-
bined amount of National Service Life Insurance and United States
Government life insurance in excess of $10,000 at any one time.
? 742. Plans of insurance
(a) Regulations shall provide for the right to convert insurance on
the five-year level premium term plan into ordinary life, twenty-pay-
ment life, endowment maturing at age sixty-two, and into other usual
forms of insurance as may be prescribed by the Administrator. Pro-
vision shall be made for reconversion of any such policies to a higher
premium rate or, upon proof of good health satisfactory to the Admin-
istrator, to a lower premium rate, in accordance with regulations to
be issued by the Administrator. No reconversion shall be made to a
five-year level premium term policy.
(b) An insured who on or after his sixty-fifth birthday has a five-
year level premium term policy of insurance in force by payment of
premiums may exchange such policy for insurance on a special endow-
ment at age ninety-six plan upon written application; payment of the
required premium; and surrender of the five-year level premium term
policy and any total disability provision attached thereto with all
rights, title, and interests thereunder. However, if it is found by the
Administrator subsequent to the exchange that prior thereto the term
policy matured because of total permanent disability of the insured
or that he was entitled to total disability benefits under the total
disability provision attached to such policy, the insured, upon sur-
render of the special endowment at age ninety-six policy and any
provision for waiver of premiums issued under subsection (c) of this
section with all rights, title, and interest thereunder, will be entitled
to benefits payable under the prior contract. In such case, the cash
value less an indebtedness on the endowment policy shall be refunded
together with any premiums paid on a provision for waiver of pre-
miums. Insurance on the special endowment at age ninety-six plan
shall be issued at the attained age of the insured upon the same terms
and conditions as are contained in standard policies of United States
Government Life Insurance except:
(1) the insurance shall not mature and no benefits shall be
paid thereunder because of total permanent disability;
(2) the premiums for such insurance shall be as prescribed
by the Administrator;
 I
pproved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
38 GROUP LIFF INSURANCE FOR THE UNIFORMED SERVICES
(3) such insurance cannot be exchanged, converted, or recon-
verted to an;7 other plan of insurance;
(4) all cash, loan, paid-up, and extended term insurance values
shall be as prescribed by the Administrator; and
(5) the insurance shall be subject to such other changes in
terms and conditions as the Administrator determines to be rea-
sonable ane practicable.
(c) The Administrator shall, upon application made by the insured
at the same time as he exchanges his term policy for an endowment
policy issued under the provisions of subsection (b) of this section,
and upon payment of such extra premium as the Administrator shall
prescribe, melide in such endowment policy a provision, for waiver
of premiums cn the policy and on the provision during the total per-
manent disability of the insured, if such disability began after the
date of such application and while the policy and the provision are in
force by ray nont of premiums. The Administrator shall not grant
waiver oary premium becoming due more than one year before
receipt in th,,~ Veterans' Administration of claim for the same, except
as provided in this subsection.. Any premiums paid for months dur-
ing which iaiver is effective shall be refunded. The Administrator
shall provide by regulations for examination or reexamination of an
insured claiming waiver of premiums under this subsection, and may
deny waiver for failure to cooperate. If it is found that an insured
is no longer totally and permanently disabled, the waiver of premiums
shall cease as of the date of such finding and the policy and provision
may be coatinued by payment of premiums as provided therein. In
any ease in which the Administrator finds that theinsured's failure
to make t'.mely claim for waiver of premiums, or his failure to submit
satisfactory evidence of the existence or continuance of total per-
manent disability was due to circumstances beyond. his control, the
Administrator may grant waiver or continuance of waiver of pre-
miums. If the insured dies without filing claim for waiver, the bene-
ficiaryy, within one year after the death of the insured, or, if the
beneficiery is insane or a minor, within one year after removal of such
legal disability, may file claim for waiver with evidence of the insured's
right to waiver under this subsection. Policies containing a provision
for waiver of premiums issued under this subsection may be separately
classified for the purpose of divident distribution from otherwise
similar policies not containing such provision.
? 743. Premiums
The premium rates for insurance shall be the net rates based upon
the American Experience Table of Mortality and interest at 3'% per
centum per annum. Regulations shall prescribe: the time and method
of payment of premiums, but payments of premiums in advance shall
not be required for periods of more than one month each, and may
be &3ducted from the pay or deposit of the insured or be otherwise
made at his election.
? 744. Policy provisions
(a). Provisions for maturity at certain ages, for continuous install-
meuts during the lifetime of the insured or beneficiaries, or both, for
refund of premiums, cash, loan, paid-up and extended values, divi-
dends from gains and savings, and such other provisions for the pro-
tection and advantage of and for alternative benefits to the insured
ar d the beneficiaries as may be found to be reasonable and practicable
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 may be provided for in insurance contracts or from time to time by
regulations.
(b) All calculations on insurance shall be based upon the American
Experience Table of Mortality and interest at 33i per centum per
annum, except that no deduction shall be made for continuous in-
stallments during the life of the insured in case his total and per-
manent disability continues more than two hundred and forty months.
(c) On and after July 1.9, 1939, the rate of interest charged on any
loan secured by a lien on insurance shall not exceed 5 per centum per
annum.
? 745. Renewal
(a) Effective July 23, 1953, at the expiration of any term period
any insurance policy issued on the five-year level premium term plan
which has not been exchanged or converted to a permanent plan of
insurance and which is not lapsed shall be renewed as level premium
term insurance without application for a successive five-year period
at the premium rate for the attained age without medical examina-
tion. However, on and after such date renewal shall be effected in
cases where the policy is lapsed only if the lapse occurred not earlier
than two months before the expiration of the term period, and rein-
statement in such cases shall be under the terms and conditions pre-
scribed by the Administrator. In any case where the five-yyear level
premium term period expired between July 23, 1953, and December
31, 1953, both dates inclusive, under the conditions set forth in the
preceding sentence, the insured, notwithstanding the expiration of
an intervening five-year period, shall have not less than six months
following the date of enactment of this title within which to meet the
terms and conditions prescribed by the Administrator under the pre-
ceding sentence.
(b) This section shall take effect on the date of enactment of this
title.
? 746. Dividends to pay premiums
Until and unless the Veterans' Administration has received from
the insured a request in writing for payment of dividends in cash or
that the dividends be placed on deposit in accordance with the provi-
sions of his policy, any regular annual dividends shall be applied in
payment of premiums becoming due on insurance after the date the
dividend is payable on or after December 31, 1958.
? 747. Incontestability
Subject to the provisions of section 754 of this title all contracts or
policies of insurance heretofore or hereafter issued, reinstated, or con-
verted shall be incontestable from the date of issuance, reinstatement,
or conversion, except for fraud, nonpayment of premiums, or on the
around that the applicant was not a member of the military or naval
Forces of the United States. The insured under such contract or
policy may, without prejudicing his rights, elect to make claim to the
Veterans' Administration or to bring suit under section 784 of this
title on any prior contract or policy, and if found entitled thereto,
shall, upon surrender of any subsequent contract or policy, be entitled
to payments under the prior contract or policy. In any case in which
a contract or policy of insurance is canceled or voided after March 16,
1954, because of fraud, the Administrator shall refund to the insured,
if living, or, if deceased, to the person designated as beneficiary (or if
 Approved For Release 20031Nfi&LIEJ 4J6~0~0 4&&OEg 01Y?6b%- VICES
none survives, to the estate of the insured) all money, without interest,
paid as premiums on such contract or policy for any period subsequent
to two years after the date such fraud induced the Veterans' Adminis-
tration to issue, reinstate, or convert such insurance less any dividends,
loan, or other payment made to the insured under such contract or
policy.
? 748. Total disability provision
The Administrator shall include in United States Government life
insurance policies provision whereby an insured, who is totally dis-
abled as a result of disease or injury for a period of four consecutive
months or more before attaining the age of sixty-five years and before
default in payment of any premium, shall be paid disability benefits
at the rate of $5.75 monthly for each $1,000 of insurance in force when
total disability benefits become payable. The amount of such monthly
payment under the provisions of this section shall not be reduced
because of payment of permanent and total disability benefits under
the insurance policy. Such payments shall be effective as of the first
day of the fifth consecutive month, and shall be made monthly during
the continuance of such total disability. Such payments shall be
concurrent with or independent of permanent and total disability
benefits under the insurance policy. In addition to the monthly dis-
ability benefits the ayment of premiums on the life insurance and
for the total disability benefits authorized by this section shall be
waived during the continuance of such total disability. Regulations
shall provide for reexaminations of beneficiaries under this section;
and, in the event that it is found that an insured is no longer totally
disabled, the waiver of premiums and payment of benefits shall cease
and the insurance policy, including the total disability provision, may
be continued by payment of premiums as provided in said policy and
the total disability provision. Neither the dividends nor the amount
payable in any settlement under any United States Government life
insurance policy shall be decreased because of disability benefits
granted under the provisions of this section. The payment of total
disability benefits shall not prejudice the right of any insured, who
is totally and permanently disabled, to permanent and total disability
benefits under his insurance policy. The provision authorized by this
section shall not be included in any United States Government life
insurance policy heretofore or hereafter issued, except upon applica-
tion, payment of premium by the insured, and proof of good health'
satisfactory to the Administrator. The benefit granted under this
section shall be on the basis of multiples of $500, and not less than
$1,000 or more than the amount of insurance in force at time of
application. The Administrator shall determine the amount of the
monthly premium to cover the benefits of this section, and in order
to continue such benefits in force the monthly premiums shall be
payable until the insured attains the age of sixty-five years or until
the prior maturity of the policy. In all other respects such monthly
premium shall be payable under the same terms and conditions as
the regular monthly premium on the United States Government life
insurance policy.
? 749. Change of beneficiary
Subject to regulations, the insured shall at all times have the right
Approved For Release 213O4 tiO4kte0'44kRE}Pt7SOG44iMoooJ 0tl124O00 tes Govern-
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
GROUP LIFE INSURANCE FOR THE UNIFORMED SERVICES 41
ment life insurance policy without the consent of such beneficiary or
beneficiaries.
? 750. Payment to estates
If no beneficiary of insurance is designated by the insured, either
in his lifetime or by his last will and testament, or if the designated
beneficiary does not survive the insured, then there shall be paid to
the estate of the insured the present value of the remaining unpaid
monthly installments. If the designated beneficiary survives the
insured and dies before receiving all of the installments of insurance
payable and applicable, then there shall be paid to the estate of such
beneficiary the present value of the remaining unpaid monthly install-
ments. No payments shall be made to any estate which under the
laws of the residence of the insured or the beneficiary, as the case may
be, would escheat, but same shall escheat to the United States and be
credited to the United States Government Life Insurance Fund.
? 751. Payment of insurance
United States Government life insurance, except as provided in this
subchapter, shall be payable in two hundred and forty equal monthly
installments. When the amount of an individual monthly payment
is less than $5, such amount may in the discretion of the Administrator
be allowed to accumulate without interest and be disbursed annually.
? 752. Optional settlement
The Administrator may provide in insurance contracts for optional
settlements, to be selected by the insured, whereby such insurance may
be made payable either in one sum or in installments for thirty-six
months or more. A provision may also be included in such contracts
authorizing the beneficiary to elect to receive payment of the insur-
ance in installments for thirty-six months or more, but only if the
insured has not exercised his right of election as provided in this sub-
chapter. Even though the insured may have exercised his right of
election the beneficiary may elect to receive such insurance in install-
ments spread over a greater period of time than that selected by the
insured.
? 753. Assignments
Any person to whom United States Government life insurance shall
be payable may assign his interest in such insurance to the spouse,
child, grandchild, parent, brother, sister, uncle, aunt, nephew, niece,
brother-in-law, or sister-in-law of the insured. Insofar as applicable,
the definitions contained in section 3 of the World War Veterans' Act,
1924, in effect on December 31, 1958, shall apply to this section,
? 754. Forfeiture
No yearly renewable term insurance or United States Government
life insurance shall be payable for death inflicted as it lawful punish-
ment for crime or military offense, except when inflicted by the enemy.
In such cases the cash surrender value of United States Government
life insurance, if any, on the date of such death shall be paid to the
designated beneficiary, if living, or if there be no designated bene-
ficiary alive at the death of the insured the said value shall be paid to
the estate of the insured.
 Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
4~ GROUP LIFE uPSURANCE FOR THE UNIFORMED SERVICES
?'755. United States Government Life Insurance Fund
(a) All premiums. paid on account of United States Government
life insurance shall be deposited and covered into the Treasury to the
credit of the United States Government Life Insurance Fund and shall
be available for the payment of losses, dividends, refunds, and other
benefits provided for under such insurance, including such liabilities
as shall have been or shall hereafter be reduced to judgment in a
district court of tho United States or the United States District Court
for the District of Columbia. Payments from this fund shall be made
upon and in accordance with awards by the Administrator.
(b) The Administrator is authorized to set aside out of the funds
so collected such reserve funds as may be required, under accepted
(actuarial principles, to meet all liabilities under such insurance; and
,the Secretary of the Treasury is authorized to invest and reinvest the
said United Staters Government Life Insurance Fund, or any part
'thereof, in interest-bearing obligations of the United States: or bonds
of the Federal farm-loan banks and to sell said obligations of the
United States or the bonds of the Federal farm-loan banks for the
purposes of such Fund.
? 756. Military aad naval insurance appropriation
All sums heretofore or hereafter appropriated for the military and
naval insurance ippropriation and all premiums collected for yearly
renewable term insurance deposited and covered into the Treasury
to the credit of this appropriation shall be made available to the
Veterans' Admiristration. All premiums that may hereafter be col-
looted for yearly renewable term insurance shall be deposited and
covered into the Treasury for the credit of this appropriation. Such
sum is made available for the payment of the liabilities of the United
States incurred under contracts of yearly renewable term insurance.
Payments from this a propriation shall be made upon and in accord-
ance with the awards by the Administrator.
? 757. Extra hazard costs
(a) The United States shall bear the excess mortality and disa-
bility cost resulting from the hazards of war on United States Gov-
ernment life irsurance.
(b) Whenever benefits under United States Government life insur-
ance become, or have become, payable because of total permanent dis-
ability of the insured or because of the death of the insured as a result
of disease or injury traceable to the extra hazard of the military or
naval service, as such hazard may be determined by the Administrator,
the liability shall be borne by the United States. In such cases the
Administrator shall transfer from the military and naval insurance ap-
propriation to the United States Government Life Insurance Fund a
sum which, together with the reserve of the policy at the time of
maturity by total permanent disability or death, will equal the then
value of such benefits. When a person receiving total permanent dis-
ability benefits under a United States Government life insurance
policy recove.'s from such disability and is then entitled to continue a
reduced amount of insurance, the Administrator shall transfer to the
military and naval insurance appropriation all of the loss reserve to
the credit of such policy claim except a sum sufficient to set up the
then requireti reserve on the reduced amount of the insurance that may
 Approved For Release 20$T9~/BEGrI~~$$1$UcES 43
be continued, which sum shall be retained in the United States Gov-
ernment Life Insurance Fund for the purpose of such reserve.
(c) Whenever benefits under the total disability provision become,
or have become, payable because of total disability of the insured as
a result of disease or injury traceable to the extra hazard of the mili-
tary or naval service, as such hazard may be determined by the
Administrator, the liability shall be borne by the United States,
and the Administrator shall transfer from the military and naval
insurance appropriation to the United States Government life In-
surance Fund from time to time any amounts which become or have
become payable to the insured on account of such total disability, and
shall transfer from the United States Government Life Insurance
Fund to the military and naval insurance appropriation the amount of
the reserve held on account of the total disability benefit. When a
person receiving such payments on account of total disability recovers
from such disability and is then entitled to continued protection under
the total disability provision, the Administrator shall transfer to the
United States Government Life Insurance Fund a sum sufficient to
set up the then required reserve on such total disability benefit.
(d) Any disability for which a waiver was required as a condition
to tendering a person a commission under Public Law 816, Seventy-
seventh Congress, shall be deemed to be a disability resulting from an
injury or disease traceable to the extra hazard of military or naval
service for the purpose of applying this section.
? 758. Statutory total permanent disability
Without prejudice to any other cause of disability, the permanent
loss of the use of both feet, of both hands, or of both eyes, or of one foot
and one hand, or of one foot and one eye, or of one hand and one eye, or
the loss of hearing of both ears, or the organic loss of speech, shall be
deemed total permanent disability for insurance purposes. This
section shall be deemed to be in effect on and after April 6, 1917,
and shall apply only to automatic insurance, yearly renewable term
insurance, and United States Government life insurance issued prior
to December 15, 1936.
? 759. Waiver of disability for reinstatement
(a) In the event that all provisions of the rules and regulations
other than the requirements as to the phsyical condition of the appli-
cant have been complied with, an application for reinstatement, in
whole or in part, of lapsed United States Government life insurance
n be approved if made within two years after the date of lapse and
e applicant's disability is the result of an injury or disease, or of
an aggravation thereof, suffered or contracted in the active military
or naval service during the period beginning April 6, 1917, and end-
ing July 2, 1921, and the applicant during his lifetime submits proof
satisfactory to the Administrator showing that he is not totally and
permanently disabled. As a condition to the acceptance of an applica-
tion for reinstatement under this section, the applicant shall be re-
quired to pay all the back monthly premiums which would have be-
come payable if such insurance had not lapsed, together with interest
at the rate of 5 per centum per annum, compounded annually, on each
premium from the date. said premium is due by the terms of the policy,
Approved For Relea a
t0bAla ' t-
era eoue e
11
~~rr~~}}~~ ear interest
fAd dtf - 1lly, and will
 Approved For Releas41003WIM M tALP67BOO446 05004Hro0059nvrcEss
be deducted from any settlement of insurance to which they are
attached.
? 760. Waiver of premium payments on due date
(a) The Administrator is authorized to provide by regulations for
waiving the payment of premiums on United States Government life
insurance on the due date thereof and the insurance may be'deemed
not to lapse in the cases of the following persons: (1) those who are
confined in hospital under the Veterans' Administration for a com-
pensable disability during the period while they are so confined;
(2) those who are zated as temporarily totally disabled by reason of
any injury or disease entitling them to compensation during the
period of such tots. disability and while they are so rated; (3) those
who, while mentally incompetent and for whom no legal guardian
had been or has been appointed, allowed or may allow their insur-
ance to lapse durirg the period for which they have been or here-
after may be rated mentally incompetent, or until a guardian has
notified the Veterans' Administration of his qualification, but not
later than six months after appointment of a guardian. In mentally
incompetent cases the waiver is to be made without application and
retroactive when n,acessary. Relief from payment of premiums on
the due date thereof shall be for full calendar months, beginning with
the month in which said confinement to hospital, the temporary total
disability rating, or the mental incompetency began or begins and
ending with that zronth during the half or major fraction of which
such persons are no longer entitled to waiver as provided above.
(b) All premium the payment of which when due is waived as
provided in this sect ion shall bear interest at the rate of 5 per centum
per annum, compounded annually, from the due date of each premium,
and if not paid by he insured shall be deducted from the insurance
in any settlement thereunder, or when the same matures either be-
cause of permanent total disability or death. In the event any lien
or other indebtedness established by this section or prior corresponding
provision of law exists against any policy of United States Govern-
ment life insurance in excess of the then cash surrender value thereof
at the time of the termination of such policy of insurance for any
reason other than by death or total permanent disability the Admin-
istrator is authorize([ to transfer and pay from the military and naval
insurance appropriation to the United States Government Life Insur-
ance Fund a sum eqr al to the amount such lien or indebtedness exceeds
the then cash surrender value.
Subchapter liI-Servicemen's Group Life Insurance
? 765. Definitions
For the purpose of this subchapter-
(1) The term "active duty" means full-time duty as a commissioned
I or warrant officer or as an enlisted member of a uniformed service
under a call or order to duty that does not specify a period of thirty
days or less.
(2) The term "member" means a person on active duty in the
uniformed services in a commissioned, warrant, or enlisted rank or
grade.
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 Approved For Release ff 11s~~~ 6~/~~ ~O O F2188& !?S 45
(3) The term "uniformed services" means the Army, Navy, Air
Force, Marine Corps, Coast Guard, Public Health Service, and
Environmental Science Services Administration.
? 766. Eligible insurance companies
(a) The Administrator is authorized, without regard to section 3709
of the Revised Statutes, as amended (41 U.S.C. 5), to purchase from
one or more life insurance companies a policy or policies of group life
insurance to provide the benefits specified in this subchapter. Each such
life insurancecompany must (1) be licensed to issue life insurance in
each of the fifty States of the United States and in the District of Columbia,
and (2) as of the most recent December 31 for which information is
available to the Administrator, have in effect at least I per centum of the
total amount of group life insurance which all life insurance companies
have in effect in the United States.
(b) The life insurance company or companies issuing such policy or
policies shall establish an administrative office at a place and under a
name designated by the Administrator.
(c) The Administrator shall arrange with the life insurance company
or companies issuing any policy or policies under this subchapter to
reinsure, under conditions approved by him, portions of the total amount
of insurance under such policy or policies with such other life insurance
companies (which meet qualifying criteria set forth by the Administrator)
as may elect to participate in such reinsurance.
(d) The administrator may at any time discontinue any policy or
policies which he has purchased from any insurance company under this
subchapter.
? 767. Persons insured; amount
(a) Any policy of insurance purchased by the Administrator under
section 766 of this title shall automatically insure any member of the
uniformed services on active duty against death in the amount of $10,000
from the first day of such duty, or from the date certified by the Adminis-
trator to the Secretary concerned as the date Servicemen's Group Life In-
surance under this subchapter takes effect, whichever date is the later
date, unless such member elects in writing (1) not to be insured under
this subchapter, or (2) to be insured in the amount of $5,000.
(b) If any member elects not to be insured under this subchapter or to
be insured in the amount of $5,000, he may thereafter be insured under
this subchapter or insured in the amount of $10,000 under this subchapter,
as the case may be, upon written application, proof of good health, and
compliance with such other terms and conditions as may be prescribed
by the Administrator.
? 768. Termination of coverage; conversion
Each policy purchased under this subchapter shall contain a provision,
in terms approved by the Administrator, to the effect that any insurance
thereunder on any member of the uniformed services shall cease (except
in the case of members absent without leave) one hundred and twenty days
after his separation or release from active duty, and that during the period
such insurance is in force the insured upon request to the administrative
office established under subsection 766(b) of this title shall be furnished
a list of life insurance companies participating in the program established
under this subchapter and upon written application (within such period)
to the participating company selected by the insured and payment of the
Approved For Rely2OQ89th1 :b? lROP67s8fl0446b10.0050024 00&Smination
 Approved For Release, 2`3/1 ~~Gi~~l~4~2~5~$D9sExvicEs
on a plan then currently written by such company which does not provide
for the payment ~'f any sum less than the face value thereof or for the
payment of an additional amount as premiums if the insured engages
in the military service of the United States, to replace the Servicemen's
Group Life Insur ince in effect on the insured's life under this subchapter.
In addition to life insurance companies participating in the program
established under this subchapter, such list shall include additional life
insurance companies (not so participating) which meet qualifying criteria,
terms, and conditions established by the Administrator and agree to sell
insurance to members and former members in accordance with the pro-
visions of the pri ceding sentence. In the case of any member who is
absent without leave for a period of more than thirty-one days, insurance
under this subchapter shall cease as of the date such absence commenced.
Any such member so absent without leave, upon return to duty, may
again be insured under this subchapter, but only if he complies with the
requirements set forth in section 767(b) of this section.
? 769. Deductions; payment; investment; expenses
(a) During an;l period in which a member is insured under a policy
of insurance purchased by the Administrator, under section 766 of this
title= there shall be deducted each month from his basic or other pail
until separation o" release from active duty an amount determined by the
Administrator (waich shall be the same for all such members) as the share
of the cost attributable to insuring such member under such policy, less
any costs traceable to the extra hazard of active duty in the uniformed
service. Any amount not deducted from the basic or other pay of a
member insured under this subchapter while on active duty, if not other-
wise paid, shall be deducted from the proceeds of any insurance thereafter
payable. The in,:tial monthly amount determined by the Administrator
to be charged under this subsection for insurance under this subchapter
may be continued from year to year, except that the Administrator may
redetermine such nonthly amount from time to time in accordance with
experience. No rsfunds will be made to any member of any such amount
I properly deducted from his basic or other pay to cover the insurance
granted under this subchapter.
(b) For each m,rnth for which any member is so insured, there shall be
contributed from the appropriation made for his pay an amount deter-
mined by the Administrator and certified to the Secretary concerned to be
the cost of such insurance which is traceable to the extra hazard of active
duty in the uniformed services. Such cost shall be determined by the
Administrator on the basis of the excess mortality suffered by members
and former memb>,rs of the uniformed services insured under this sub-
chapter above that incurred by the male civilian population of the United
States of the same age as the median age of members of the uniformed
services (disregarding a fraction of a year) as shown by the records of the
uniformed service,,, the primary insurer or insurers, and the Department
of ealth, Education, and Welfare, together with the most current esti-
mates of such mortality. The Administrator is authorized to make such
adjustments regariing such contributions from pay appropriations as
may be indicated from actual experience.
(c) An amount equal to the first amount due on any such insurance
may be advanced from current appropriations for active-service pay to
any such member, which amount shall constitute a lien upon any service
or other ay accruinthe erson rpm whom such advance was made and
Approved For Release 2003/11/04: CIA-013679004 4f6R000500210005-9
 GROUP LIFE INSURANCE FOR THE U 47
Approved For Release 2003/11/04: CIA-RDP67B00446R0f OUI1uO `-a?E~
shall be collected ther41 om if not otherwise paid. No disbursing or
certifying officer shall responsible for any loss incurred by reason of
sue Y advance.
(d)(1) The sums withheld from the basic or other pay of members
under subsection (a) of this section, and the sums contributed from
appropriations under subsection (b) of this section, together with the
income derived from any dividends or premium rate adjustments received
from insurers shall be deposited to the credit of a revolving fund established
in the Treasury of the United States. All premium payments and extra
hazard costs on any insurance policy or policies purchased under section
766 of this title and the administrative cost to the Veterans' Administra-
tion of insurance issued under this subchapter shall be paid from the
revolving fund.
(2) The Administrator is authorized to set aside out of the revolving
fund such amounts as may be required to meet the administrative costs
to the Veterans' Administration of insurance issued under this sub-
chapter and all current premium payments and extra hazard costs on
any insurance policy or policies purchased under section 766 of this title.
The Secretary of the Treasury is authorized to invest in and to sell and
retire special interest-bearing obligations of the United States for the
account of the revolving fund. Such obligations issued for this purpose
shall have maturities fixed with due regard for the needs of the fund and
shall bear interest at a rate equal to the average market yield (computed
by the Secretary of the Treasury on the basis of market quotations as of
the end o} the calendar month next preceding the date of issue) on all
marketable interest-bearing obligations of the United States then forming
a part of the public debt which are not due or callable until after the
expiration of four years from the end of such calendar month; except that
where such average market yield is not a multiple of one-eighth of 1 per
centum, the rate of interest of such obligation shall be the multiple of
one-eighth of 1 per centum nearest such market yield.
(8) Notwithstanding the provisions of section 782 of this title, the
Administrator shall, from time to time, determine the administrative costs
to the Veterans' Administration which in his judgment are properly
allocable to insurance issued under this subchapter and shall transfer such
cost from the revolving fund to the appropriation "General operating
expenses, Veterans' Administration".
? 770. Beneficiaries; payment of insurance
(a) Any amount of insurance under this subchapter in force on any
member or former member on the date of his death shall be paid, upon the
establishment of a valid claim therefor, to the person or persons surviving
at the date of his death, in the ollowing order of precedence:
First, to the beneficiary or beneficiaries as the member or former member
may have designated by a writing received in the uniformed services prior
to such death;
Second, if there be no such beneficiary, to the widow or widower of such
member or former member;
Third, if none o{ the above, to the child or children of such member or
former member and descendants of deceased children by representation;
Fourth, if none of the above, to the parents of such member or former
member or the survivor of them;
Fifth, if none of the above, to the duly appointed executor or administra-
tor of the estate of such member or former member;
Approved For Release 2003/11/04: CIA-RDP67B00446R000500210005-9
 O NIFORMED SERVICES
Approved For Release`h03/9T~91W'[bT