Who qualified for National Service Life Insurance coverage?


Quick Answer

National Service Life Insurance policies were available to members of the U.S. Armed Forces who served in World War II. The program stopped issuing new NSLI policies on April 25, 1951. As of 2015, over 950,000 of the 22 million NSLI policies issued are still active.

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Full Answer

NSLI policies pay yearly dividends and have a face value of up to $10,000. Yearly dividends are automatically applied to the annual premium, and policyholders may use any remaining dividends to pay the policy as far ahead as the payment will cover. The Veterans Administration also offers to deposit dividends in one of two types of interest-bearing credit accounts. The first type of account is available to term insurance policyholders and protects against police lapse by automatically withdrawing one month of insurance premiums if a payment is missed. The second account type does not offer lapse protection and is not available for term policies. The interest earned on either account is not taxable. Excess dividends may also be paid by check or direct-deposited into a private account.

An NSLI policyholder with a policy number begging with any letter but "K" may also choose to buy additional life insurance with excess dividends. These policies are available at any age and may also produce dividends.

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