How will a life insurance payment affect the amount of veteran’s benefits paid?

My father is a Veteran who gets VA disabilty benefits every month to live on. My mother past away last month after a very short battle with cancer. She was his caretaker and also a dependant on his VA benefits. His monthly benefit was cut from $1200 down to $900 a month. He had a small life insurance in the amount of $10,000. He received a check for the remaining amount after funeral costs. Will the VA cut his monthly benefits for the small amount he received after paying the funeral home?

Asked on September 25, 2010 under Insurance Law, Iowa

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The life insurance is a separate "asset" than his disability payments.  Disability payments can be dependent on the dependant the recipient has, especially if that person is deemed the recipient's caretaker.   While a significant cut in disability benefits can occur, if your father has another recipient, say for example he lives with you, I believe you might be able to help him obtain an increase in his benefits probably to what the original amount was initially.  In order to determine just what your father's rights are with respect to his disability benefits, make an appointment with a local advisor at the VA (many have volunteer advocates) who can go over options with you and your family.


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