Sent in by Veterans News and Information Services A message on the INTERNET has caused some confusion among
veterans who have VA insurance policies. False information about
dividends appear periodically.
These announcements declare that Congress has recently passed a
bill which entitles veterans and service persons to a dividend based
upon their prior years of service, and are part of a recurring
problem of misinformation that dates back to 1965. Unfortunately,
this misinformation unnecessarily raises the expectations of
veterans and service personnel and detracts from our ability to
serve our veterans.
The dividend "hoax", as we refer to it, had its origins in a special
dividend that the Department of Veterans Affairs (VA), then
known as the Veterans Administration, did pay to World War II
veterans who had National Service Life Insurance policies.
Approximately $2.7 billion was paid in 1950 to over 16 million of
these veterans under the "1948 special dividend."
Some time in 1965, the special dividend news announcements of
15 years earlier resurfaced and were mistakenly published by
several newspapers. The special dividend had already been paid
out to virtually all eligible government life insurance policyholders
and there was no new special dividend. VA moved quickly to
educate the news media, but some well-meaning individuals and
organizations began to publish the announcements in smaller
publications, newsletters, and flyers. The actual scope of the
original dividend became fictionalized and some publications
declared the dividend available to all veterans (not just World War
II) and even to those who never carried government life insurance
while in the service. The latest rumor is that active service persons,
reservists and personnel separated within the last few years are
eligible.
The 1948 special dividend program required veterans to apply for
the payment. Over the years the dividend story has prompted
hundreds of thousands of veterans to write and "apply" for this
benefit. Although the amount of letters has fluctuated, we have
received as many as 15-20,000 inquiries per week about this
dividend in the past. Because of the volume of these requesters for
a nonexistent benefit, Congress passed a law in 1970 that
prohibited payment of any special dividend declared prior to 1952
unless the application was received before 1954. There has been
no recent legislation authorizing any "special" dividends.
Dividends are not payable to current service members insured
under Serviceman's Group Life Insurance (SGLI) or Veterans'
Group Life Insurance (VGLI). SGLI and VGLI are group policies
and therefore, do not pay dividends.
For your information, VA continues to pay routine dividends on
several policy series, but only to veterans who have kept their
policies in force. These veterans receive their dividends
automatically on the anniversary date of their individual policy.
They do not have to apply.
Contact your local VA Regional Office for additional assistance by
dialing our toll-free number, 1-800,827-1000.
