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Life Insurance

CHAPTER 3. Reduction or Declination of Insurance

3.01 FULL-TIME INSURANCE
3.02 PART-TIME COVERAGE
3.03 ACTION BY UNIFORMED SERVICE
3.04 SPOUSAL NOTIFICATION

3.01 FULL-TIME INSURANCE

a. Members reporting for duty in one of the uniformed services who do not want to be insured or who prefer less than $400,000 maximum coverage must notify their uniformed service by accessing SOES or, if unable to access SOES, complete and file a SGLV Form 8286, Servicemembers' Group Life Insurance Election and Certificate, with their uniformed service. (See appendix A)

(1) If the member has completed form SGLV 8286 and the member’s branch of service is using SOES, the member must enter the coverage declination in SOES upon first access.

(2) If the member has completed for SGLV 8286 and the member's branch of service is not yet using SOES, the uniformed service must submit information to the Defense Finance and Accounting Service (DFAS) or appropriate Finance Center for the SGLI deduction to be reflected in the member’s pay.

b. Insured members who desire a lesser amount of insurance coverage or no insurance must request a change by entering the request in SOES. Requests for reduced coverage or no coverage made prior to any legislated increase in coverage have no effect under the new law.

c. A reduction or cancellation of insurance coverage is effective at midnight of the last day of the month in which the application is received by the uniformed service.

d. Whenever a member re-enters active duty, the member is covered for the full amount of insurance and any prior declination or reduction of insurance coverage does not apply.

e. If, on the first day of duty, a member elects not to be insured or elects less than the maximum coverage, that election is effective immediately. If the election is made after the first day of duty, the election is effective at midnight of the last day of the month in which the application is received by the uniformed service.

f. If a terminally-ill member requests and receives an Accelerated Death Benefit, the face value of the member's insurance is reduced by the amount of the Accelerated Benefit paid to the member. The reduction is effective upon the date on which the member cashes or deposits the Accelerated Death payment.

3.02 PART-TIME COVERAGE

A member eligible for part-time coverage may elect not to be covered or request a reduced amount of coverage by completing form SGLV 8286 and filing it with the appropriate uniformed service. The election or reduction will be effective as follows:

a. At the end of the last day of the period of duty then being performed, if the member is on active duty or active duty for training when the waiver or reduction is filed;

b. At the end of the period of inactive duty training then being performed, if the member is on inactive duty training when the waiver or reduction is filed; or

c. On the date the declination or reduction is received by the uniformed service, if the member is not on active duty, active duty for training or inactive duty training on the date the declination or reduction is filed.

3.03 ACTION BY UNIFORMED SERVICE

a. If a member makes an election to reduce or decline coverage in SOES, no action by the uniformed service is necessary.
b. If a member makes an election to reduce or decline coverage using SGLV 8286, an authorized representative of the uniformed services must sign and date, in the appropriate blocks, properly completed forms SGLV 8286 when received. The date the form is received determines the reduction or cancellation date of the insurance. Information must be sent to DFAS or the appropriate Finance Center for the adjusted deduction to be reflected in the member’s pay.

1. The completed form SGLV 8286 serves as the basis for payroll deductions or authorizing collections in a reduced amount or none at all.

2. The authorized representatives will distribute various copies of the form SGLV 8286 according to the instructions provided on the form. Note: Do not send the completed form to any VA office or the OSGLI. See instructions attached to form SGLV 8286.

3.04 SPOUSE NOTIFICATION

a. A member's spouse will be notified of any reductions in coverage below the maximum amount if:

(1) the spouse is the beneficiary; and

(2) the reduction is the first election for less than the maximum coverage; or

(3) the reduction decreases coverage below the amount of coverage elected at the first reduction.

Example 1: The maximum coverage increased to $400,000 effective September 1, 2005. Member elects to decrease coverage to $300,000 on December 5, 2005. Member's spouse will be notified.

Member elects to decrease coverage further to $200,000 on January 10, 2006. Member's spouse will be notified again.

Example 2: Member has $400,000 of coverage. Member elects to decrease coverage to $300,000 on December 31, 2005. Member's spouse will be notified.

Member elects to increase coverage to $350,000 on February 1, 2006. Member's spouse will NOT be notified in this instance because while the amount is still below the maximum it is above the previous election amount.

b. The member's spouse will be notified by the Department of Defense at the last address of record of the spouse.

c. The failure to notify a spouse of the election for reduced insurance does not affect the validity of the election.

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