A message on the INTERNET has caused some confusion among veterans who have VA insurance policies. False information about dividends appear periodically. These announcements declare that Congress has recently passed a bill which entitles veterans and service persons to a dividend based upon their prior years of service, and are part of a recurring problem of misinformation that dates back to 1965. Unfortunately, this misinformation unnecessarily raises the expectations of veterans and service personnel and detracts from our ability to serve our veterans.

The dividend "hoax", as we refer to it, had its origins in a special dividend that the Department of Veterans Affairs (VA), then known as the Veterans Administration, did pay to World War II veterans who had National Service Life Insurance policies. Approximately $2.7 billion was paid in 1950 to over 16 million of these veterans under the "1948 special dividend." Some time in 1965, the special dividend news announcements of 15 years earlier resurfaced and were mistakenly published by several newspapers. The special dividend had already been paid out to virtually all eligible government life insurance policyholders and there was no new special dividend. VA moved quickly to educate the news media, but some well-meaning individuals and organizations began to publish the announcements in smaller publications, newsletters, and flyers. The actual scope of the original dividend became fictionalized and some publications declared the dividend available to all veterans (not just World War II) and even to those who never carried government life insurance while in the service. The latest rumor is that active service persons, reservists and personnel separated within the last few years are eligible.

The 1948 special dividend program required veterans to apply for the payment. Over the years the dividend story has prompted hundreds of thousands of veterans to write and "apply" for this benefit. Although the amount of letters has fluctuated, we have received as many as 15-20,000 inquiries per week about this dividend in the past. Because of the volume of these requesters for a nonexistent benefit, Congress passed a law in 1970 that prohibited payment of any special dividend declared prior to 1952 unless the application was received before 1954. There has been no recent legislation authorizing any "special" dividends. Dividends are not payable to current service members insured under Serviceman’s Group Life Insurance (SGLI) or Veterans’ Group Life Insurance (VGLI). SGLI and VGLI are group policies and therefore, do not pay dividends. For your information, VA continues to pay routine dividends on several policy series, but only to veterans who have kept their policies in force. These veterans receive their dividends automatically on the anniversary date of their individual policy. They do not have to apply. Contact your local VA Regional Office for additional assistance by dialing our toll-free number, 1-800-827-1000.