50 USC § 3975 - Policy restrictions

---
identifier: "/us/usc/t50/s3975"
source: "usc"
legal_status: "official_prima_facie"
title: "50 USC § 3975 - Policy restrictions"
title_number: 50
title_name: "WAR AND NATIONAL DEFENSE"
section_number: "3975"
section_name: "Policy restrictions"
chapter_number: 50
chapter_name: "SERVICEMEMBERS CIVIL RELIEF"
subchapter_number: "IV"
subchapter_name: "LIFE INSURANCE"
positive_law: false
currency: "119-84"
last_updated: "2026-04-21"
format_version: "1.1.0"
generator: "[email protected]"
source_credit: "(Oct. 17, 1940, ch. 888, title IV, § 405, as added Pub. L. 108–189, § 1, Dec. 19, 2003, 117 Stat. 2853.)"
---


# § 3975. Policy restrictions

**(a)** **Dividends** While a policy is protected under this subchapter, a dividend or other monetary benefit under a policy may not be paid to an insured or used to purchase dividend additions without the approval of the Secretary of Veterans Affairs. If such approval is not obtained, the dividends or benefits shall be added to the value of the policy to be used as a credit when final settlement is made with the insurer.

**(b)** **Specific restrictions** While a policy is protected under this subchapter, cash value, loan value, withdrawal of dividend accumulation, unearned premiums, or other value of similar character may not be available to the insured without the approval of the Secretary. The right of the insured to change a beneficiary designation or select an optional settlement for a beneficiary shall not be affected by the provisions of this subchapter.

---

**Source Credit**: (Oct. 17, 1940, ch. 888, title IV, § 405, as added Pub. L. 108–189, § 1, Dec. 19, 2003, 117 Stat. 2853.)

## Editorial Notes

### Codification

Section was formerly classified to section 545 of the former Appendix to this title prior to editorial reclassification and renumbering as this section.

### Prior Provisions

A prior section 405 of , art. IV, ; , ; , , , related to deduction of unpaid premiums upon settlement of policies maturing during protection, prior to the general amendment of this Act by . See .

## Statutory Notes and Related Subsidiaries

### Effective Date

Section applicable to any case not final before , see , set out as a note under .