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The premium rates are based upon the American Experience Table of Mortality and interest at 3 1/2 per cent per annum, and represent the actual cost of the insurance, not including administrative expenses which the government bears, or any loading for solicitor's commissions, advertising, inspection or medical examinations. The extra hazard of the war risk is created by the government's call to service and it properly bears that cost also.

Therefore the man gets insurance in an extra hazardous occupation at less cost than the same form of insurance would cost him in peace times in any commercial insurance organization. He has 120 days after enlistment or entering the service in which to elect to take the insurance and to decide upon the amount he wants. After that time he may drop any part of his insurance he does not want to carry but may not increase his policy. The insurance is in force immediately the signed application is mailed or delivered and even a formal application is not necessary, as the bureau recognizes any written application which sufficiently identifies the applicant and specifies the amount desired. The acceptance is of course conditioned upon the man passing his physical examination and being admitted to the active service if that is not already the case.

Premiums may be and usually are paid automatically by monthly allotment of pay. The rates during the war run from 63 cents per month per thousand dollars of insurance at the age of fifteen to $3.35 at the age of sixty-five, increasing annually upon the anniversary of the policy to the age rate for the next age year. The insurance will run as long as the premiums are paid whether the man leaves the service or not, provided it is converted into permanent forms of insurance within five years after the close of the war, unless it is terminated by the discharge or dismissal of any person from the military or naval forces on the ground that he is an enemy alien, conscientious objector, or a deserter, or as guilty of mutiny, treason, spying, or any offense involving moral turpitude, or wilful and persistent misconduct.

The amount of the policy, in the event of death or total and permanent disability, is payable in 240 monthly instalments, except that if the insured is permanently and totally disabled and lives longer than 240 months, payments continue at that rate as long as he fives and is so disabled; and in the event of his death before 240 payments have been made the remaining monthly instalments go to his beneficiary.

In the event of death before any or all of the 240 payments have been made, the insurance is payable likewise in monthly instalments to any beneficiary designated by the insured within a limited class consisting of a spouse, child, grandchild, parent, brother or sister as defined above in the case of allotments, allowances and compensation. If no beneficiary within the permitted class is designated by the insured or if the designated one does not survive the insured, the payments go to such persons within the permitted class of beneficiaries as would be entitled, under the laws of the state of the residence of the insured, to his personal property in case of intestacy. If no such person survive the insured, then there shall be paid to the estate of the insured an amount equal to the reserve value, if any, of the insurance at the time of his death, calculated on the basis of the American Experience Table of Mortality, and 3J per centum interest in full of all obligations under the contract of insurance.

There are no other provisions for lump sum payments. The insurance payments are further protected, however, by the provision, which applies also to payments for allotments and family allowances and compensations, that they are not assignable, nor subject to the claims of creditors of any person to whom an award is made, except claims of the United States against the person on whose account the allotments and family allowances, compensation, or insurance is payable.

The act of October 6, 1917, contained a very wise provision for automatic insurance whereby all men in the active service on or after April 6, 1917, the date when war was declared, who during the 120 day period immediately following the date of publication of the terms of the contract of insurance (Oct. 15, 1917), were totally and permanently disabled or died without having applied for insurance, were to be deemed to have applied for and to have been granted insurance payable to such person during his life in monthly instalments of $25 each. This was about the equivalent of $4,500 of insurance. In the event of death, however, the payments of the balance of 240 such payments to beneficiaries were restricted to a widow remaining unmarried, a child, or a widowed mother. This restriction was amended June 25, 1918, so that the beneficiary might be a widow during her widowhood, or if there is no widow surviving, then to the child or children of the insured, or if there is no child surviving him, then to his mother, or if there is no mother surviving him, then to his father, if and while they survive him. This provision was made retroactive and the bureau was directed to revise all awards of automatic insurance in accordance with its terms on July 1, 1918.