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Report No. 82

IV. American La.- Position Under Statutory Schemes

5.13. Statutory scheme-National Service Life Insurance.-

To have a more concrete picture of the American law, it would also be useful to refer, by way of illustration, to one of the statutory schemes of life insurance in force in the U.S.A.- the National Service Life Insurance (primarily meant for members of the armed forces and veterans). We quote the material statutory provisions from the U.S. Code1-

"Section 717.- Insurance maturing on or after August 1, 1846.

(a) The insured shall have the right of 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 payable in accordance with the following optional modes of settlement:

[Portion relating to optional modes of settlement not quoted].

(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 instalments. The first beneficiary may elect to receive payment under any option which provides for payment over a longer period of time than the option elected by the insured, or if no option has been elected by the insured in excess of thirty-six months.

.... .... ....

(d) If the beneficiary of such insurance is entitled to lumpsum settlement but elects some other mode of settlement and dies before receiving all the benefits due and payable under such mode of settlement, the present value of the remaining unpaid amount shall be payable to the estate of the beneficiary. If no beneficiary is designated by the insured, or if a designated beneficiary does not survive the insured, or if a designated beneficiary not entitled to a lumpsum settlement survives the insured, and dies before receiving all the benefit due and payable, then the committed 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 sum paid will not escheat.

.... .... ...."

1. United States Code Annotated, Title 38 (1978), p. 357, National Service Life Insurance, section 717.



Effect of Nomination under Section 39 of the Insurance Act, 1938 Back




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