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CHAPTER 6. Beneficiaries

6.01 DESIGNATIONS OF BENEFICIARY(IES) - GENERAL
6.02 PREPARATION OF SGLV 8286
6.03 UNCLEAR OR UNUSUAL BENEFICIARY DESIGNATIONS
6.04 DESIGNATIONS OF BENEFICIARIES WHO ARE MINORS
6.05 DESIGNATION CHANGE OR CANCELLATION
6.06 BENEFICIARY(IES) NOT DESIGNATED
6.07 AUTOMATIC TERMINATION OF BENEFICIARY DESIGNATION

6.01 DESIGNATIONS OF BENEFICIARY(IES) - GENERAL

Any insured under SGLI may designate as Primary beneficiary or Secondary beneficiary any person, firm, corporation or legal entity (including the insured's estate), individually or as a trustee. Before naming a trust or other legal entity as beneficiary, the insured must ensure the trust or legal entity is established.

6.02 UPDATING SOES

a. Members covered under full-time SGLI should access SOES whenever they make a beneficiary designation or change a previous designation.

b. Members covered under part-time SGLI should complete form SGLV 8286 whenever they make a beneficiary designation or change a previous designation.

c. Within SOES:

(1) Members must name a specific beneficiary.

(2) If a member designates more than one primary beneficiary, the member must specify in whole percentages the share to be paid to each or select equal shares. A member may also designate a secondary beneficiary in SOES. NOTE: A secondary beneficiary is a person or persons designated to receive the insurance proceeds if the primary beneficiaries die before the insured dies.

d. After updating a beneficiary in SOES, the member must confirm and certify the change in SOES in order for the designation to be valid. 

e. SGLI and VGLI are federal programs and operate under federal law. Under federal law, the insured has the absolute right to name and change the beneficiary at any time. State divorce decrees, separation agreements or other state or municipal court documents are not binding on the determination of a beneficiary and cannot effectively change an insured's beneficiary designation. 

6.03 UNCLEAR OR UNUSUAL BENEFICIARY DESIGNATIONS

a. The member must designate a specific beneficiary or beneficiaries to ensure that the proceeds are distributed to the persons or persons whom the insured intended to be the beneficiary(ies), particularly when:

(1) A member has a parent who has remarried but both natural parents are living; or

(2) When a member is divorced and remarried, but has children living with the first spouse; or

(3) When a member has no immediate next of kin and wants a distant relative or friend to receive the proceeds

b. When a member is likely to be survived by dependents or parents and designates some other person or entity as beneficiary, a responsible representative of the uniformed service should advise the member to submit a signed memorandum indicating that the member understands the designation is unusual and that the person named by the member as the beneficiary is the person he or she intends to receive the proceeds.

c. Whenever there is any question or doubt as to a beneficiary, the uniformed service should encourage the member to update the beneficiary in SOES in order to clearly identify the person(s) to whom the proceeds of the insurance should be paid.

d. While the selection of a beneficiary is a matter of free election for the insured and the insured should never be forced to designate otherwise, under Public Law 109-13 if a Servicemember is married and previously designated his or her spouse as a beneficiary, the Department of Defense must provide written notification to their spouse of any change of designation that names anyone other than the spouse or child as beneficiary. Even with this provision the member can choose to name any beneficiary he/she desires.  However, if disregarding dependents or parents in designating beneficiaries, it is desirable that the member documents their intent on the designation form.

6.04 DESIGNATIONS OF BENEFICIARIES WHO ARE MINORS

a. The law allows payment of SGLI to be made directly to a minor surviving spouse.

b. If the beneficiary is a child, the insurance proceeds will be paid to the child's guardian.

c. The appointment of a guardian is often time consuming and costly and, for that reason, may delay the payment of proceeds. The amount of the proceeds can be materially reduced by the payment of court costs, attorney fees and expenses incurred by the guardian. To avoid such complications and expense, a member may choose to consult with an attorney to designate a pre-appointed trustee of the minor beneficiary.

6.05 DESIGNATION CHANGE OR CANCELLATION

a. An insured member may, at any time, change or cancel a previous designation.

b. If a married member designates as beneficiary someone other than a spouse or child, the spouse will be notified that a change has occurred, except in the following circumstances:

(1) the spouse has been previously notified of the change in beneficiary; and

(2) the spouse was not a beneficiary in the election prior to the current beneficiary change

The member's spouse will be notified by the Department of Defense of any such election at the last address of record of the spouse.  The failure to notify a spouse of the election not to be insured does not affect the validity of the election.

Example 1:  Married member names his mother the sole beneficiary of his SGLI policy.  The member's spouse will be notified of the election.

The married member subsequently changes the beneficiary on his policy to his brother.  The member's spouse will not be notified of the election.

c. The following rules apply when the law governing SGLI is amended to increase the amount of insurance coverage:

  • An insured should submit a new beneficiary designation.
  • If an insured was covered for the maximum amount under a prior law, the prior beneficiary designation and payment option filed by the member will be effective until changed and the proceeds will be distributed in the same proportionate amount as the portion designated for such beneficiary under the prior law.

Example: 

CoverageDesignationAmount Paid
$250,000

50% spouse
50% child

Spouse: $125,000
Child: $125,000

$400,000

50% spouse
50% child

Spouse: $200,000
Child: $200,000

 

d. A beneficiary designation will remain in effect until properly changed by the member or automatically canceled. (See paragraph 6.07). Termination of one period of duty and re-entry into another period of duty will not automatically cancel the designation unless there is a break in service. (See paragraph 1.02(i)) for definition of break in service.)

e. A designation change or cancellation will take effect only if it is in writing (see 1.02k), signed by the insured and received prior to the date of death of the insured by the uniformed service.

f. If such designation change or cancellation is made during a period of extended coverage following separation or release, such change will take effect only if received by the OSGLI prior to the insured's death.

6.06 BENEFICIARY(IES) NOT DESIGNATED

Members must name a specific beneficiary. If a member does not designate a beneficiary, the insurance will automatically be paid in the following order of precedence:

a. The surviving spouse of the member; if none,

b. The child or children of the member, in equal shares, with the share of any deceased children to be distributed among the descendants of that child; if none,

c. The parents in equal shares or all to the surviving parent; if none,

d. A duly appointed executor or administrator of the insured's estate; if none,

e. Other next of kin.

NOTE: An insured's biological parents are not always who the individual intended to receive the proceeds, and in cases such as abandonment, they are not recognized as legal parents. Claim disputes involving the recognition of "rightful" parents can be avoided by discouraging the use of "By Law" designations and listing the parents by name.

6.07 AUTOMATIC TERMINATION OF BENEFICIARY DESIGNATION

A designation of beneficiary made by a member insured under SGLI for full-time or part-time coverage will automatically be canceled under the following rules:

a. When the insurance terminates following separation or release from all duty or the obligation to perform duty in a uniformed service;

b. When the member re-enters on duty or assumes an obligation to perform duty in another uniformed service; or

c. When the member re-enters on duty in the same uniformed service more than one calendar day after separation or release from all duty in that uniformed service. NOTE: If a prior designation is terminated for any of the reasons shown above and the member wants the insurance proceeds paid to a designated beneficiary, the member must access SOES to add the desired beneficiary, or if unable to access SOES, complete and submit a new form SGLV 8286 to the member's uniformed service.

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