CONVERSION OF SGLI AND VGLI TO COMMERCIAL LIFE INSURANCE POLICY.

SEC. 403. CONVERSION OF SGLI AND VGLI TO COMMERCIAL LIFE INSURANCE POLICY. (a) Option to Convert SGLI.— Subsection (b) of section 1968, as amended by section 402(c)(2), is amended— (1) by inserting “(1)” after “(b)” at the beginning of the subsection; (2) by striking out “would cease,” in the first sentence and all that follows through the period at the end of the sentence and inserting in lieu thereof “would cease— “(A) shall be automatically converted to Veterans’ Group Life Insurance, subject to (i) the timely payment of the initial premium under terms prescribed by the Secretary, and (ii) the terms and conditions set forth in section 1977 of this title; or “(B) at the election of the member, shall be converted to an individual policy of insurance as described in section 1977(e) of this title upon written application for conversion made to the participating company selected by the member and payment of the required premiums.”; and (3) by designating the second sentence as paragraph (2) and in that sentence striking out “Such automatic conversion” and inserting in lieu thereof “Automatic conversion to Veterans’ Group Life Insurance under paragraph (1)”. (b) VGLI Conversion.— Section 1977 is amended— (1) in subsection (a)— (A) by inserting “(1)” after “(a)”; (B) by striking out the last two sentences; and (C) by adding at the end the following: “(2) If any person insured under Veterans’ Group Life Insurance again becomes insured under Service members’ Group Life Insurance but dies before terminating or converting such person’s Veterans’ Group Insurance, Veterans’ Group Life Insurance shall be payable only if such person is insured for less than $200,000 under Servicemembers’ Group Life Insurance, and then only in an amount which, when added to the amount of Servicemembers’ Group Life Insurance payable, does not exceed $200,000.”; and (2) in subsection (e)— (A) in the first sentence, by inserting “at any time” after “shall have the right”; and (B) by striking out the third sentence and inserting in lieu thereof the following: “The Veterans’ Group Life Insurance policy converted to an individual policy under this subsection shall terminate on the day before the date on which the individual policy becomes effective.”.