38 U.S.C. § 1981 — Replacement of surrendered and expired insurance

(a) Any person who surrendered a policy of National Service Life Insurance or United States Government life insurance on a permanent plan for its cash value while in the active service after April 24, 1951, and before January 1, 1957, who was entitled on December 31, 1958, to reinstate or replace that insurance under section 623 of the National Service Life Insurance Act of 1940, may, upon application in writing made while on continuous active duty^* which began before January 1, 1959, or within one hundred and twenty days after separation therefrom, be granted, without medical examination, permanent plan insurance on the same plan not in excess of the amount surrendered for cash, or may reinstate that surrendered insurance upon payment of the required reserve^* and the premium for the current month. Waiver of premiums and total disability income benefits otherwise authorized under this chapter must not be denied in any case of issue or reinstatement of insurance on a permanent plan under this section or the prior corresponding provision of law in which it is shown to the satisfaction of the Secretary^* that total disability of the applicant began before the date of application. The cost of the premiums waived and total disability income benefits paid by virtue of the preceding sentence and the excess mortality cost in any case where the insurance matures by death from that total disability must be borne by the United States and the Secretary must transfer from time to time from the National Service Life Insurance appropriation to the National Service Life Insurance Fund and from the military and naval insurance appropriation to the United States Government Life Insurance Fund that sums as may be necessary to reimburse the funds for that costs. (b) Any person who had United States Government life insurance or National Service Life Insurance on the five-year level premium term plan, the term of which expired while that person was in the active service after April 25, 1951, or within one hundred and twenty days after separation from that active service, and in either case before January 1, 1957, who was entitled on December 31, 1958, to replace that insurance under section 623 of the National Service Life Insurance Act of 1940, must, upon application made while on continuous active duty which began before January 1, 1959, or within one hundred and twenty days after separation therefrom, payment of premiums and evidence of good health satisfactory to the Secretary, be granted an equivalent amount of insurance on the five-year level premium term plan at the premium rate for that person’s then attained age.