‘(a) In General- In accordance with the provisions of this section, the Secretary shall grant insurance to each eligible veteran who seeks such insurance against the death of such veteran occurring while such insurance is in force.
‘(b) Eligible Veterans- For purposes of this section, an eligible veteran is any veteran less than 65 years of age who has a service-connected disability.
‘(c) Amount of Insurance- (1) Subject to paragraph (2), the amount of insurance granted an eligible veteran under this section shall be $50,000 or such lesser amount as the veteran shall elect. The amount of insurance so elected shall be evenly divisible by $10,000.
‘(2) The aggregate amount of insurance of an eligible veteran under this section, section 1922 of this title, and section 1922A of this title may not exceed $50,000.
‘(d) Reduced Amount for Veterans Age 70 or Older- In the case of a veteran insured under this section who turns age 70, the amount of insurance of such veteran under this section after the date such veteran turns age 70 shall be the amount equal to 20 percent of the amount of insurance of the veteran under this section as of the day before such date.
‘(e) Premiums- (1) Premium rates for insurance under this section shall be based on the 2001 Commissioners Standard Ordinary Basic Table of Mortality and interest at the rate of 4.5 per centum per annum.
‘(2) The amount of the premium charged a veteran for insurance under this section may not increase while such insurance is in force for such veteran.
‘(3) The Secretary may not charge a premium for insurance under this section for a veteran as follows:
‘(A) A veteran who has a service-connected disability rated as total and is eligible for a waiver of premiums under section 1912 of this title.
‘(B) A veteran who is 70 years of age or older.
‘(4) Insurance granted under this section shall be on a nonparticipating basis and all premiums and other collections therefor shall be credited directly to a revolving fund in the Treasury of the United States, and any payments on such insurance shall be made directly from such fund. Appropriations to such fund are hereby authorized.
‘(5) Administrative costs to the Government for the costs of the program of insurance under this section shall be paid from premiums credited to the fund under paragraph (4), and payments for claims against the fund under paragraph (4) for amounts in excess of amounts credited to such fund under that paragraph (after such administrative costs have been paid) shall be paid from appropriations to the fund.
‘(f) Application Required- An eligible veteran seeking insurance under this section shall file with the Secretary an application therefor. Such application shall be filed not later than the earlier of--
‘(1) the end of the two-year period beginning on the date on which the Secretary notifies the veteran that the veteran has a service-connected disability; and
‘(2) the end of the 10-year period beginning on the date of the separation of the veteran from the Armed Forces, whichever is earlier.’.
(b) Clerical Amendment- The table of sections at the beginning of chapter 19 is amended by inserting after the item related to section 1922A the following new item:
(c) Exchange of Service Disabled Veterans’ Insurance- During the one-year period beginning on the effective date of this section under subsection (d), any veteran insured under section 1922 of title 38, United States Code, who is eligible for insurance under section 1922B of such title (as added by subsection (a)), may exchange insurance coverage under such section 1922 for insurance coverage under such section 1922B.
(d) Effective Date- This section, and the amendments made by this section, shall take effect on April 1, 2010.