A-4408, SEPTEMBER 9, 1924, 4 COMP. GEN. 284

A-4408: Sep 9, 1924

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BECOME A PART OF THE ESTATE OF THE INSURED AND ARE NOT PAYABLE TO THE DEATH BENEFICIARY AS SUCH. 1 COMP. WHERE A PROVISION OF A CONVERTED POLICY THAT MONTHLY INSTALLMENTS OF DISABILITY INSURANCE SHALL BE PAYABLE TO THE INSURED SO LONG AS HE LIVES IS QUALIFIED BY ANOTHER PROVISION OF THE POLICY THAT THE DEATH BENEFICIARY SHALL RECEIVE AS DEATH BENEFITS THE FULL NUMBER OF MONTHLY INSTALLMENTS LESS ONLY SUCH INSTALLMENTS AS HAVE BEEN "PAID TO THE INSURED DURING HIS LIFETIME. " THE ACCRUED INSTALLMENTS OF DISABILITY INSURANCE WHICH HAVE NOT ACTUALLY BEEN PAID TO AND RECEIVED BY THE INSURED DURING HIS LIFE. ARE NOT PAYABLE UPON HIS DEATH TO THE ESTATE OF THE INSURED. 1924: I HAVE YOUR LETTER OF JULY 30.

A-4408, SEPTEMBER 9, 1924, 4 COMP. GEN. 284

WAR RISK INSURANCE (CONVERTED) - DISPOSITION OF ACCRUED AND UNPAID INSTALLMENTS OF DISABILITY INSURANCE UPON DEATH OF INSURED IN THE ABSENCE OF A SPECIFIC PROVISION IN THE POLICY TO THE CONTRARY, MONTHLY INSTALLMENTS OF WAR RISK INSURANCE ACCRUED AND UNPAID AT THE DATE OF DEATH OF THE INSURED, AUTHORIZED TO BE PAID UNDER A CONVERTED POLICY BECAUSE OF PERMANENT AND TOTAL DISABILITY, BECOME A PART OF THE ESTATE OF THE INSURED AND ARE NOT PAYABLE TO THE DEATH BENEFICIARY AS SUCH. 1 COMP. GEN. 254. WHERE A PROVISION OF A CONVERTED POLICY THAT MONTHLY INSTALLMENTS OF DISABILITY INSURANCE SHALL BE PAYABLE TO THE INSURED SO LONG AS HE LIVES IS QUALIFIED BY ANOTHER PROVISION OF THE POLICY THAT THE DEATH BENEFICIARY SHALL RECEIVE AS DEATH BENEFITS THE FULL NUMBER OF MONTHLY INSTALLMENTS LESS ONLY SUCH INSTALLMENTS AS HAVE BEEN "PAID TO THE INSURED DURING HIS LIFETIME," THE ACCRUED INSTALLMENTS OF DISABILITY INSURANCE WHICH HAVE NOT ACTUALLY BEEN PAID TO AND RECEIVED BY THE INSURED DURING HIS LIFE, ARE NOT PAYABLE UPON HIS DEATH TO THE ESTATE OF THE INSURED, THE FULL NUMBER OF INSTALLMENTS PROVIDED FOR IN THE POLICY, LESS THE NUMBER ACTUALLY PAID TO THE INSURED, BEING PAYABLE TO THE DEATH BENEFICIARY. 6 MS. COMP. GEN. 286.

COMPTROLLER GENERAL MCCARL TO THE DIRECTOR, UNITED STATES VETERANS' BUREAU, SEPTEMBER 9, 1924:

I HAVE YOUR LETTER OF JULY 30, 1924, REQUESTING DECISION AS TO THE EFFECT, IF ANY, THE DECISION OF JANUARY 17, 1924, 3 COMP. GEN. 425, HAD ON THE DECISION OF NOVEMBER 10, 1921, 1 COMP. GEN. 254, AND MS. DECISION OF FEBRUARY 4, 1922, RELATIVE TO THE PROPER DISPOSITION TO BE MADE OF INSTALLMENTS OF DISABILITY INSURANCE ACCRUED IN FAVOR OF THE INSURED UNDER A CONVERTED POLICY WHICH HAD MATURED BY TOTAL AND PERMANENT DISABILITY, BUT UNPAID AT THE DATE OF DEATH OF THE INSURED.

THE DECISION OF NOVEMBER 10, 1921, SUPRA, HELD:

UNDER THE PROVISIONS OF LAW AND THE TERMS OF THE POLICY ISSUED PURSUANT THERETO THE ACCRUED AND UNPAID INSTALLMENTS ON THE MATURITY OF THE POLICY BECAUSE OF THE PERMANENT AND TOTAL DISABILITY OF THE INSURED BELONGED TO THE INSURED, AND UPON HIS DEATH BECAME A PART OF HIS ESTATE. NO PROVISION OF LAW OR OF THE POLICY PROVIDES FOR OR AUTHORIZES PAYMENT TO A BENEFICIARY UNDER A POLICY OF ACCRUED AND UNPAID INSTALLMENTS DUE THE INSURED AT DATE OF DEATH, AND SUCH AMOUNTS ARE NOT PAYABLE TO THE BENEFICIARY UNDER THE POLICY, AS SUCH, THE BENEFICIARY'S RIGHTS UNDER THE POLICY BEING LIMITED TO THOSE PROVISIONS FOR PAYMENTS TO THE BENEFICIARY SPECIFICALLY MADE. SEE 24 COMP. DEC. 521; 26 ID. 576, 650, 652.

UPON RECONSIDERATION OF SAID DECISION, THE DECISION OF FEBRUARY 4, 1922, 6 MS. COMP. GEN. 286, HELD, PAGES 3 AND 4, AS FOLLOWS:

* * * I AM OF THE OPINION THAT THE DECISION OF NOVEMBER 10, 1921, RIGHTLY DECIDED AS A MATTER OF LAW GENERALLY THAT ANY UNPAID INSTALLMENTS OF SUCH INSURANCE WHICH MAY ACCRUE TO THE INSURED BECAUSE OF HIS PERMANENT TOTAL DISABILITY BEFORE HIS DEATH ARE PAYABLE TO THE PERSONAL REPRESENTATIVES OF HIS ESTATE AND NOT TO THE DEATH BENEFICIARY OF THE POLICY. WHETHER OR NOT ANY INSTALLMENTS OF CONVERTED DISABILITY INSURANCE HAVE IN FACT ACCRUED TO AN INSURED AT THE TIME OF HIS DEATH DEPENDS UPON THE TERMS OF THE POLICY WHICH HE THEN HELD.

AFTER QUOTING PROVISIONS FROM THE SPECIMEN FORM OF CONVERTED POLICY THE DECISION FURTHER HELD, PAGES 6 AND 7:

THE PROVISION OF THE POLICY THAT MONTHLY INSTALLMENTS OF DISABILITY INSURANCE SHALL BE PAYABLE TO THE INSURED AND SHALL CONTINUE TO BE SO PAYABLE SO LONG AS HE LIVES IS SUBJECT TO THE QUALIFICATION IN THE PROVISION FOR DISABILITY BENEFITS "EXCEPT AS HEREINAFTER PROVIDED.' THE AFTER PROVISION OF THE POLICY IS THAT THE BENEFICIARY SHALL RECEIVE AS DEATH BENEFIT THE FULL NUMBER OF MONTHLY INSTALLMENTS PROVIDED BY THE POLICY, LESS ONLY SUCH INSTALLMENTS AS HAVE BEEN ,PAID TO THE INSURED DURING HIS LIFETIME.' THE EXCEPTION QUOTED TOGETHER WITH THIS AFTER PROVISION OF THE POLICY CLEARLY LIMITS DISABILITY BENEFITS UNDER THE POLICY TO SUCH INSTALLMENTS ONLY AS ARE PAID TO THE INSURED DURING HIS LIFETIME. THERE IS NO PROVISION THAT INSTALLMENTS WHICH HAD ACCRUED TO THE INSURED SHALL BE PAID TO THE BENEFICIARY.

ACCORDINGLY I NOW DECIDE THAT THESE PROVISIONS OF THE POLICY ARE LEGAL AND THAT THEY FIX CLEARLY AND DEFINITELY THE RIGHTS OF THE INSURED AND OF THE BENEFICIARY, RESPECTIVELY, IN THE WHOLE AMOUNT OF THE INSURANCE, AND EXCLUDE THE PERSONAL REPRESENTATIVES OF THE INSURED FROM ANY RIGHT WHATEVER IN THE INSURANCE PROVIDED IN THE POLICY.

THE DECISION OF JANUARY 17, 1924, IN WHICH WAS CONSIDERED THE LEGALITY OF A PROVISION IN A CONVERTED POLICY FOR EXTENDING INSURANCE BENEFITS BY APPLICATION OF THE CASH SURRENDER VALUE, DENYING ALL RIGHTS UNDER THE POLICY UPON THE DEATH OF THE INSURED WHO HAD BECOME PERMANENTLY AND TOTALLY DISABLED DURING THE EXTENDED PERIOD BUT DIED SUBSEQUENT THERETO, HELD:

WAR-RISK POLICIES UNDER THE BASIC LAW AND ITS AMENDMENTS INSURE AGAINST THE HAPPENING OF TWO EVENTS, VIZ, TOTAL AND PERMANENT DISABILITY OR DEATH, AND THE HAPPENING OF EITHER MATURES THE POLICY. IN THE EVENT OF TOTAL AND PERMANENT DISABILITY, AS IN THIS CASE, THE NET AMOUNT LEGALLY DUE UNDER THE PARTICULAR POLICY CONSTITUTES AN OBLIGATION OF THE UNITED STATES PAYABLE IN ACCORDANCE WITH THE TERMS OF THE POLICY. IF DEATH OCCURS BEFORE THIS AMOUNT IS FULLY PAID TO THE INSURED AS MONTHLY INSTALLMENTS, THE REMAINDER NOT ACCURED AT THE DATE OF DEATH IS PAYABLE TO THE DEATH BENEFICIARY. MONTHLY INSTALLMENTS ACCRUED AND UNPAID AT DATE OF DEATH OF THE INSURED BECOME A PART OF THE ESTATE OF THE INSURED AND ARE NOT PAYABLE TO THE DEATH BENEFICIARY AS SUCH. 1 COMP. GEN. 254.

THE LAST TWO SENTENCES OF THIS PARAGRAPH WERE MERELY EXPRESSIVE OF THE GENERAL RULE AS LAID DOWN IN THE DECISION OF NOVEMBER 10, 1921, AND HAD NO EFFECT WHATEVER ON THE CONCLUSION OF THE DECISION HOLDING THE PROVISION IN THE POLICY UNDER CONSIDERATION UNLAWFUL. SAID DECISION OF JANUARY 17, 1924, WAS NOT INTENDED TO REPUDIATE THE QUALIFICATION OF THE RULE ANNOUNCED IN THE DECISION OF FEBRUARY 4, 1922, OR TO MODIFY THAT DECISION IN ANY WAY.

THE OPINION OF THE GENERAL COUNSEL OF THE UNITED STATES VETERANS' BUREAU DATED APRIL 25, 1924, A COPY OF WHICH YOU HAVE FORWARDED, CORRECTLY STATES THE EFFECT OF THE THREE DECISIONS OF THIS OFFICE.