Beginning in 1991, how is gratuitous S-DVI insurance payable to the beneficiary?

Gratuitous Service-Disabled Veterans' Insurance (S-DVI), which was made available to eligible veterans starting in 1991, is structured to provide financial support in a specific way. The correct option indicates that upon the death of the policyholder, the benefit is paid out solely as a lump sum to the designated beneficiary. This lump sum payout simplifies the financial transaction for beneficiaries, providing them with immediate access to the funds, rather than having to navigate ongoing payments or distributions.

This structure is designed to address the needs of beneficiaries who may require immediate financial assistance in the event of the insured’s passing, rather than committing them to a longer-term payment model, which could involve ongoing administrative processes. Additionally, by offering the benefit as a lump sum, it ensures that beneficiaries can utilize the funds in a way that best suits their individual circumstances, whether that be covering immediate expenses, paying off debts, or investing in future needs.

Other payment mechanisms like monthly payments, percentages, or annuity payments do not apply in this context, as they do not align with the specific intentions and regulations governing the gratuitous S-DVI insurance issued by the CDVA.