Servicemembers’ Group Life Insurance and Veterans’ Group Life Insurance-Accelerated Benefit Option Regulation Update

<RULE> DEPARTMENT OF VETERANS AFFAIRS <CFR>38 CFR Part 9</CFR> <DEPDOC>[Docket No. VA-2024-VBA-0029]</DEPDOC> <RIN>RIN 2900-AR67</RIN> <SUBJECT>Servicemembers’ Group Life Insurance and Veterans’ Group Life Insurance—Accelerated Benefit Option Regulation Update</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Department of Veterans Affairs. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Department of Veterans Affairs (VA) amends its regulations governing Servicemembers’ Group Life Insurance (SGLI), Family SGLI (FSGLI), and Veterans’ Group Life Insurance (VGLI) to allow an alternate applicant to apply for an Accelerated Benefit in certain circumstances. VA also defines key terms and removes contact information and the reproduction of the Accelerated Benefit application form from the text of the regulations. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This rule is effective October 29, 2025. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Samantha Yerdon, Management and Program Analyst, Insurance Service, Veterans Benefits Administration, (215) 842-2000, ext. 5494. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> On December 5, 2024, VA published a proposed rulemaking in the <E T="04">Federal Register</E> pertaining to alternate applicants applying for Accelerated Benefits. 89 FR 96627. VA proposed to liberalize the Accelerated Benefit Option for SGLI, FSGLI, and VGLI members to afford third parties the opportunity to elect an Accelerated Benefit Option if a SGLI/VGLI member is terminally ill and medically incapacitated or an FSGLI spouse is terminally ill and the member is medically incapacitated. <E T="03">Id.</E> at 96628. Additionally, VA proposed to remove all addresses and telephone numbers from the text of the regulations as this information is subject to periodic change, and it is not practicable to use the rulemaking process each time an address or telephone number is updated. <E T="03">Id.</E> The proposed rule also defined terms related to dependent child FSGLI coverage when the children are age 18-22 to clarify eligibility for insurance payments upon death. <E T="03">Id.</E> at 96629. VA provided the public with a 60-day comment period that ended on February 3, 2025. VA received three comments from the public, and all three comments supported the proposed rulemaking. Based on the rationale set forth in the proposed rule, VA adopts the proposed rule as final with technical edits to 38 CFR 9.14 that correct the subparagraph designations and maintain reference to the Office of Management and Budget control number (2900-0618) and authority citations. <HD SOURCE="HD1">Executive Orders 12866, 13563, and 14192</HD> VA examined the impact of this rulemaking as required by Executive Orders 12866 (Sept. 30, 1993) and 13563 (Jan. 18, 2011), which direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. The Office of Information and Regulatory Affairs has determined that this final rule is not a significant regulatory action under E.O. 12866, as supplemented by Executive Order 13563. This final rule is a deregulatory action under Executive Order 14192. <E T="03">Economic Impact:</E> VA has determined there are no costs or transfers associated with this proposal because the SGLI, FSGLI, and VGLI programs are funded by the premiums that Service members and former members pay for the life insurance coverage. Given that these programs are designed to be primarily self-supporting, appropriations are not authorized to be paid to these programs except in limited instances where the SGLI program's mortality experience due to combat deaths exceeds expected mortality in the program based on civilian death rates. Other than this limited circumstance, the cost of insurance coverage as well as the costs of administering the programs are borne by the program out of premiums paid for coverage. VA designated this as a deregulatory action under Executive Order 14192 due to there being no increases in incremental costs or transfers and because the rulemaking also reduces administrative burden and adjudication inefficiencies. While VA is unable to quantify savings, there will be increases in efficiency as this rulemaking simplifies claims processing and reduces costly appeals without imposing new regulatory requirements. <HD SOURCE="HD1">Regulatory Flexibility Act</HD> The Secretary hereby certifies that this final rule will not have a significant economic impact on a substantial number of small entities as they are defined in the Regulatory Flexibility Act (5 U.S.C. 601-612). The factual basis for this certification is based on an existing statutory provision for the SGLI program, at 38 U.S.C. 1966, which limits the primary insurer for this program to large insurance companies in the United States. The Secretary of Veterans Affairs has purchased a group life insurance policy from a large private insurer for purposes of providing coverage to Service members, their spouses and dependent children, and Veterans. This regulation clarifies requirements under which certain SGLI program benefits are offered under the authority of 38 U.S.C. 1968 and 1980 but does not change the pre-existing statutory requirement that the primary insurer be a large private insurer. As such, the overall impact of this final rule will be of no benefit or detriment to small entities. Therefore, pursuant to 5 U.S.C. 605(b), the initial and final regulatory flexibility analysis requirements of 5 U.S.C. 603 and 604 do not apply. <HD SOURCE="HD1">Unfunded Mandates</HD> This final rule will not result in the expenditure by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted annually for inflation) in any one year. <HD SOURCE="HD1">Paperwork Reduction Act</HD> Although this final rule contains collection of information under the provisions of the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521), there are no provisions associated with this rulemaking constituting any new collection of information or any revisions to the existing collection of information. The collection of information for 38 CFR 9.14 is currently approved by the Office of Management and Budget (OMB) and has been assigned OMB control number 2900-0618. <HD SOURCE="HD1">Assistance Listing</HD> The Assistance Listing number and title for the program affected by this document is 64.103, Life Insurance for Veterans. <HD SOURCE="HD1">Congressional Review Act</HD> Pursuant to subtitle E of the Small Business Regulatory Enforcement Fairness Act of 1996 (known as the Congressional Review Act) (5 U.S.C. 801 <E T="03">et seq.</E> ), the Office of Information and Regulatory Affairs designated this rule as not satisfying the criteria under 5 U.S.C. 804(2). <LSTSUB> <HD SOURCE="HED">List of Subjects in 38 CFR Part 9</HD> Life insurance, Military personnel, Veterans. </LSTSUB> <HD SOURCE="HD1">Signing Authority</HD> Douglas A. Collins, Secretary of Veterans Affairs, approved this document on September 23, 2025, and authorized the undersigned to sign and submit the document to the Office of the Federal Register for publication electronically as an official document of the Department of Veterans Affairs. <SIG> <NAME>Taylor N. Mattson,</NAME> Alternate Federal Register Liaison Officer, Department of Veterans Affairs. </SIG> For the reasons stated in the preamble, VA amends 38 CFR part 9 as set forth below: <HD SOURCE="HED">PART 9—SERVICEMEMBERS’ GROUP LIFE INSURANCE AND VETERANS’ GROUP LIFE INSURANCE</HD> <REGTEXT TITLE="38" PART="9"> 1. The authority citation for part 9 continues to read as follows: <HD SOURCE="HED">Authority:</HD> 38 U.S.C. 501, 1965-1980A, unless otherwise noted. </REGTEXT> <REGTEXT TITLE="38" PART="9"> 2. Amend § 9.1 by revising paragraph (b) and adding paragraphs (m) and (n) to read as follows: <SECTION> <SECTNO>§ 9.1 </SECTNO> <SUBJECT>Definitions.</SUBJECT> <STARS/> (b) The term <E T="03">administrative office</E> means the Office of Servicemembers’ Group Life Insurance. <STARS/> (m) The term <E T="03">pursuing a course of instruction at an approved educational institution,</E> as used in 38 U.S.C. 101(4)(A)(iii), means, for purposes of this part, pursuing a “program of education,” as that term is defined in 38 U.S.C. 3002(3), at an approved “educational institution,” as that term is defined in 38 U.S.C. 3452(c), as an enrolled student on either a more than half-time basis or on a half-time basis or less. (n) The term a <E T="03">stepchild who is a member of a veteran's household,</E> as used in 38 U.S.C. 101(4)(A), for purposes of this part, means a stepchild who has been living in the insured's household for at least one year. </SECTION> </REGTEXT> <REGTEXT TITLE="38" PART="9"> 3. Revise § 9.14 to read as follows: <SECTION> <SECTNO>§ 9.14 </SECTNO> <SUBJECT>Accelerated Benefits.</SUBJECT> (a) <E T="03">Accelerated Benefit.</E> An Accelerated Benefit is a payment of a portion of SGLI or VGLI to a terminally ill member ( <E T="03">i.e.,</E> an insured Service member or veteran), or a payment of a portion of Family Servicemembers' Group Life Insurance to a member on behalf of a terminally ill covered person, before death. (b) <E T="03">Eligibility to receive an Accelerated Benefit.</E> A member is eligible to receive an Accelerated Benefit if the member has a valid written medical prognosis from a physician of nine months or less to live, and otherwise complies with the provisions of this section. (c) <E T="03">Applying for an Accelerated Benefit—SGLI Member or VGLI Member.</E> (1) A terminally ill member can apply for an Accelerated Benefit by co ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 17k characters. 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