The following information applies to policies issued to World War I, World War II, Korean, and Vietnam-era Veterans and any Service-Disabled Veterans Insurance policies. Policies in this group are prefixed by the letters K, V, RS, W, J, JR, JS, or RH.
Insurance Dividends Issued Annually: World War I, World War II, and Korean-era veterans with active policies beginning with the letters V, RS, W, J, JR, JS, or K are issued tax-free dividends annually on the policy anniversary date. (Policies prefixed by RH do not earn dividends.) Policyholders do not need to apply for dividends, but may select from among the following dividend options:
1. Cash: The dividend is paid directly to the insured either by a mailed check or by direct deposit to a bank account.
2. Paid-Up Additional Insurance: The dividend is used to purchase additional insurance coverage.
3. Credit or Deposit: The dividend is held in an account for the policyholder with interest. Withdrawals from the account can be made at any time. The interest rate may be adjusted.
4. Net Premium Billing Options: These options use the dividend to pay the annual policy premium. If the dividend exceeds the premium, the policyholder has options to choose how the remainder is used. If the dividend is not enough to pay an annual premium, the policyholder is billed the balance.
5. Other Dividend Options: Dividends can also be used to repay a loan or pay premiums in advance.