[Code of Federal Regulations]
[Title 38, Volume 1]
[Revised as of January 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 38CFR8.2]

[Page 500-501]
 
            TITLE 38--PENSIONS, BONUSES, AND VETERANS' RELIEF
 
                CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS
 
PART 8_NATIONAL SERVICE LIFE INSURANCE--Table of Contents
 
Sec. 8.2  Payment of premiums.

    (a) What is a premium? A premium is a payment that a policyholder is 
required to make for an insurance policy.
    (b) How can policyholders pay premiums? Premiums can be paid by:
    (1) Cash, check, or money order directly to VA.
    (2) Allotment from service or retirement pay.
    (3) Automatic deduction from VA benefits (pension, compensation or 
insurance dividends (see Sec. 8.4)).
    (4) Pre-authorized debit from a checking account.
    (c) When should policyholders pay premiums? (1) Unless premiums are 
paid in advance, policyholders must pay premiums on the effective date 
shown on the policy and on the same date of each following month. This 
is called the ``due date.''
    (2) Policyholders may pay premiums quarterly, semi-annually, or 
annually in advance.
    (d) What happens if a policyholder does not pay a premium on time? 
(1) When a policyholder pays a premium within 31 days from the ``due 
date,'' the policy remains in force. This 31-day period is called a 
``grace period.'' If the insured dies within the 31-day grace period, VA 
deducts the unpaid premium from the amount of insurance payable.
    (2) If a policyholder pays a premium after the 31-day grace period, 
VA will not accept the payment and the policy lapses effective the date 
the premium was due; Except that VA will accept a premium paid after the 
31-day grace period as a timely payment if:
    (i) The policyholder pays the premium within 61 days of the due 
date; and
    (ii) The policyholder is alive at the time the payment is mailed.
    (3) When a policyholder pays the premium by mail, the postmark date 
is the date of payment.
    (4) When a policyholder pays a premium by check or money order which 
is not honored and it is shown by satisfactory evidence that:

[[Page 501]]



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The bank did not pay the check or money
           order because of:                          Then:
------------------------------------------------------------------------
An error by the bank...................  The policyholder has an
                                          additional 31 days (from the
                                          date stamped on VA's
                                          notification letter) to pay
                                          the premium and any other
                                          premiums due through the
                                          current month.
An error in the check or money order...  The policyholder has an
                                          additional 31 days (same as
                                          above).
Lack of funds..........................  The premium is considered not
                                          paid.
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[65 FR 7437, Feb. 15, 2000]