When the US entered the war in 1917, President Wilson asked the Secretary of Treasury to appoint a committee of experts from the insurance, social services and medical community to recommend legislation that would meet the financial needs of servicemen and their dependents both during and after the war. The result was an extensive amendment to the War Risk Insurance Act, which included a provision for voluntary life insurance on the lives of servicemen.
The reason for the amendment is simple, like the property and casualty insurance companies who were unwilling to assume the risk of insuring ships and cargo during a war, the private life insurance companies were unwilling to underwrite the coverage for members of the service. While actuaries are extremely accurate in predicting deaths during peace-time, it is almost impossible to estimate how many deaths there will be during a war. To avoid taking on this type of high risk insurance companies have traditionally added what is referred to as a "war clause" to their contracts during war time periods.
As a result of the amendments to the War Risk Insurance Act, the government soon became the largest life insurer in the US. The response to the program was in many respects overwhelming. Although the coverage was optional, over 93% of those eligible took the coverage, and most of those took the maximum amount of $10,000. Through each succeeding war and major military conflict the government, through the VA, has continued to provide life insurance to members of the armed services while they were on active duty and after they were separated.
Today we have 6 different programs that cover veterans of WWI, WWII, the Korean war and certain groups of disabled veterans. Namely, United State Government Life Insurance, National Service Life Insurance, Veteran’s Special Life Insurance, Veteran’s Reopened Insurance, Service-Disabled Veterans Insurance and Veteran’s Mortgage Life Insurance.