Servicemembers' & Veterans' Group Life Insurance
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Servicemembers' and Veterans' Group Life Insurance Handbook
CHAPTER 7. ELECTION OF METHOD FOR PAYMENT OF PROCEEDS
7.01 GENERAL
7.02 ELECTION OR CHANGE OF METHOD OF PAYMENT
7.03 EFFECTIVE DATE OF ELECTION OR CHANGE
An insured member may elect that the proceeds of SGLI be paid to the beneficiary in a lump sum payment or in 36 equal monthly payments. If the insured member elects a lump sum payment, the beneficiary (ies) will be given the option of receiving the lump sum payment either through the Prudential Alliance Account, check, or Electronic Funds Transfer*. The beneficiary should check the appropriate Method of Payment in Part IV of form SGLV 8283, Claim for Death Benefits.
* Alliance is not available for payments less than $5,000, payments to individuals residing outside the United States and its territories, and certain other payments. These will be paid by check.An Alliance Account is an interest bearing draft account established in the beneficiary’s(ies’) name(s) with a draft book. The beneficiary can write drafts (“checks”) for any amount up to the full amount of the proceeds. There are no monthly service fees or per check charges and additional checks can be ordered at no cost, but fees apply for some special services including returned checks, stop payment orders and copies of statements/checks.The funds in an Alliance Account begin earning interest immediately and will continue to earn interest until all funds are withdrawn. Interest is accrued daily, compounded daily and credited every month. The interest rate may change and will vary over time subject to a minimum rate that will not change more than once every 90 days. You will be advised in advance of any change to the minimum interest rate via your quarterly Alliance Account statement or by calling Customer Support at (877) 255-4262.
Open Solutions Inc. is the Service Provider of the Prudential Alliance Account Settlement Option, a contractual obligation of The Prudential Insurance Company of America, located at 751 Broad Street, Newark, NJ 07102-3777. Check clearing is provided by JPMorgan Chase Bank, N.A. and processing support is provided by First Data Payment Services (FDPS). Alliance Account balances are not insured by the Federal Deposit Insurance Corporation (FDIC). Alliance Account funds are backed by the financial strength of The Prudential Insurance Company of America and State Guaranty Associations. Open Solutions Inc., JPMorgan Chase Bank, N.A., and First Data Payment Services are not Prudential Financial companies.
b. An insured may also change the method of settlement at any time without the consent of the beneficiary.c. If the insured elects a lump sum payment or makes no election, the beneficiary may choose either the lump sum settlement or payment in 36 equal monthly payments.
d. If the insured elects 36 equal monthly payments, the beneficiary may not elect a lump sum settlement.
7.02 ELECTION OR CHANGE OF METHOD OF PAYMENT
a. Insured members should use form SGLV 8286, Servicemembers' Group Life Insurance Election and Certificate, to elect a method of payment or to change a previous election. The member should indicate the option selected in the appropriate column on the form; i.e., either 36 months or lump sum. NOTE: If the election is for a reduced amount of insurance, the member should complete the entire form.
b. The form SGLV 8286 when completed, signed and dated should be submitted to the uniformed service concerned.
c. If the election or change is being made during the period the insurance remains in force following separation or release from duty, the form should be sent to the OSGLI.
7.03 EFFECTIVE DATE OF ELECTION OR CHANGE
An election or change is effective the date the form SGLV 8286 is received in the uniformed service concerned or the date such a change is received at the OSGLI, whichever is applicable.
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