Veterans Life Insurance Policy Loans and Cash Surrenders

Managing AgencyVeterans Benefits Administration (VBA)http://benefits.va.gov/benefits/ 
Program Description
Policyholders who have permanent plans of insurance under one of the programs listed below may borrow up to 94 percent of the cash value of the policy after it has been in force for one year or surrender the policy for its cash value.
General Program Requirements
In order to qualify for a loan or cash surrender, you must have a permanent plan issued under one of the following programs:

United States Government Life Insurance (USGLI) - USGLI was generally issued to Veterans of World War I. This program has been closed to new applicants since 1951.

National Service Life Insurance (NSLI) - NSLI was generally issued to Veterans of World War II. This program has been closed to new applicants since 1951.

Veterans' Special Life Insurance (VSLI) - VSLI was generally issued to Korean War-era veterans. This program has been closed to new applicants since 1957.

Service Disabled Veterans Insurance (S-DVI) - S-DVI is issued to qualifying Veterans who separated from service on or after April 25, 1951, with service-connected disabilities. This program is still open to new issues.

Veterans Reopened Insurance (VRI) - VRI was generally issued to World War II and Korean veterans with service-connected or serious non-service connected disabilities. This program was open only for one year, from May 1965 to May, 1966, and is closed to new applicants.

A loan or cash surrender may be obtained in two ways:
  1. After a whole life or endowment plan has been in force for one year on a premium-paying basis or is paid-up.
  2. On paid-up additional insurance attached to either permanent plans or term plans.

Policyholders may borrow up to 94 percent of the cash value of the policy .

Loans are granted in any amount up to 94 percent of the policy's reserve value, minus any existing indebtedness against the policy, plus interest.
Loan Terms
Variable Interest Rate between 5-12 percent with no Upfront Fees or Pre-payment penalties. Maximum Loan Length at maturity. Maximum Loan Amount 94 percent of the policy reserve value. Annual Payment Frequency.

For more information, see the "VA Life Insurance Programs for Veterans and Servicemembers Handbook," topics "Guaranteed Values" and "Policy Loans."
Your Next Steps
The following information will lead you to the next steps to apply for this benefit.
Application Process
To apply for a policy loan online please visit:
http://benefits.va.gov/insurance/index.asp

You can apply for the cash value by submitting: You can apply for a loan by submitting:
Program Contact Information
If you have questions:
  • Visit https://iris.custhelp.com/ to search Frequently Asked Questions or ask a question on-line
  • Call the VA Insurance Center at 1-800-669-8477
  • Call 1-800-829-4833, if you are hearing impaired
To apply for additional Veterans' benefits and view your benefit status, open an eBenefits Premium account. eBenefits is a one-stop source for information on Department of Defense and Department of Veterans Affairs benefits and services. With a free Premium level eBenefits account, Veterans and Servicemembers can conduct self-service transactions such as checking claim status information, GI Bill enrollment, and obtaining copies of civil service preference letters, DD214, and other personal information. For further information and to register for a free Premium level account, visit http://www.ebenefits.va.gov.