Dividend
Payment Options Available
If your Government
life insurance policy number begins with the letters V, RS, W, J,
JR, JS or K, you have a policy that pays dividends. The table below
describes the dividend options that are available to you. We cannot
tell you what option is best for you. Only you can make that decision.
Only one option can be in effect for a policy at any one time. If
you have more than one policy in force, different options can be selected
for each policy. You may change your option at any time by calling
our toll-free number (1-800-669-8477).
Click here for
information about the Special
Dividend Rumor.
Dividend
Option |
How
it Works |
Use
Dividend to Pay Your Annual Premium |
This dividend
option automatically applies your annual dividend toward your
annual policy premium. If your dividend is less than your annual
premium, you will receive a bill for the difference. If your
dividend exceeds your policy's annual premium, the excess dividend
can be (1) paid to you in cash, (2) used to purchase paid-up
additional insurance or (3) paid against a policy loan or lien
if you have one.
|
Buy
Paid-Up Additional Insurance |
This option
allows you to use your dividends to purchase additional paid-up
insurance, thereby increasing the amount of insurance you have
in-force. The insurance purchased with your dividends is in
addition to your basic coverage and can be purchased at any
age. You can accumulate a substantial amount of paid-up additional
insurance coverage over a period of years because you earn dividends
on both your basic coverage and the paid-up additions themselves.
This option is available on all policies except those with a
policy number beginning with the letter K. The paid-up additions
you purchase will:
- Provide
additional protection for your beneficiaries
- Have
cash and loan values
- Earn
dividends
- Not
require payment of premiums
|
Leave
Dividends in an Account That Earns Interest and Protects Your
Policy Against Lapse |
This option
allows you to keep your dividend in a credit account which
earns
interest. These interest earnings are
not taxable. You may withdraw money from the credit
account at any time by either calling our toll-free number
1-800-669-8477
or requesting the withdrawal in writing. Another feature of
this option is that if you forget to send us your premium
payment,
we will automatically withdraw enough money from your credit
account to pay one month's premium. You will be notified
when premiums are withdrawn from your account. Interest
earned on
the account changes annually and is dependent on the particular
insurance program. Interest
earned is not taxable. The 2007 rates are
as follows:
- National
Service Life Insurance - 5.50%
- U S
Government Life Insurance - 5.25%
- Veterans'
Special Life Insurance - 6.50%
- Veterans'
Reopened Insurance - 5.75%
|
Leave
Dividends in an Account That Earns Interest |
This
option is similar to the dividend credit option, except that it
is not available to term insurance policyholders. Also, if you
fail to pay premiums, we will not automatically withdraw a monthly
premium from your deposit account. Withdrawals from your deposit
account must be authorized by calling our toll-free number or
by writing to us. Interest earned
is not taxable. |
Repay
a Loan or Lien |
If
you have a loan or lien against your policy, you may select this
option to reduce the amount owed. |
Pay
Premiums as far in Advance as Possible |
Your
dividend is used to pay premiums in advance as far as the amount
will allow. This option is not available if premiums are being
paid automatically by allotment from retired pay, by deduction
from VA compensation or pension or by checking account deduction
(VAMATIC). |
Receive
Dividends in Cash |
On
your policy anniversary date, you will receive your dividend via
either a U.S. Treasury check or a direct deposit of funds into
your bank account. |
|