(a)(1) A member of the uniformed services who is insured under Servicemembers’ Group Life Insurance shall automatically be insured for traumatic injury in accordance with this section. Insurance benefits under this section shall be payable if the member, while so insured, sustains a traumatic injury on or after December 1, 2005, that results in a qualifying loss specified pursuant to subsection (b)(1).

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(2) If a member suffers more than one such qualifying loss as a result of traumatic injury from the same traumatic event, payment shall be made under this section in accordance with the schedule prescribed pursuant to subsection (d) for the single loss providing the highest payment.

(b)(1) A member who is insured against traumatic injury under this section is insured against such losses due to traumatic injury (in this section referred to as “qualifying losses”) as are prescribed by the Secretary by regulation. Qualifying losses so prescribed shall include the following:

(A) Total and permanent loss of sight.

(B) Loss of a hand or foot by severance at or above the wrist or ankle.

(C) Total and permanent loss of speech.

(D) Total and permanent loss of hearing in both ears.

(E) Loss of thumb and index finger of the same hand by severance at or above the metacarpophalangeal joints.

(F) Quadriplegia, paraplegia, or hemiplegia.

(G) Burns greater than second degree, covering 30 percent of the body or 30 percent of the face.

(H) Coma or the inability to carry out the activities of daily living resulting from traumatic injury to the brain.

(2) For purposes of this subsection:

(A) The term “quadriplegia” means the complete and irreversible paralysis of all four limbs.

(B) The term “paraplegia” means the complete and irreversible paralysis of both lower limbs.

(C) The term “hemiplegia” means the complete and irreversible paralysis of the upper and lower limbs on one side of the body.

(D) The term “inability to carry out the activities of daily living” means the inability to independently perform two or more of the following six functions:

(i) Bathing.

(ii) Continence.

(iii) Dressing.

(iv) Eating.

(v) Toileting.

(vi) Transferring.

(3) The Secretary may prescribe, by regulation, conditions under which coverage otherwise provided under this section is excluded.

(4) A member shall not be considered for the purposes of this section to be a member insured under Servicemembers’ Group Life Insurance if the member is insured under Servicemembers’ Group Life Insurance only as an insurable dependent of another member pursuant to subparagraph (A)(ii) or (C)(ii) of section 1967(a)(1) of this title.

(c)(1) A payment may be made to a member under this section only for a qualifying loss that results directly from a traumatic injury sustained while the member is covered against loss under this section and from no other cause.

(2)(A) A payment may be made to a member under this section for a qualifying loss resulting from a traumatic injury only for a loss that is incurred during the applicable period of time specified pursuant to subparagraph (B).

(B) For each qualifying loss, the Secretary shall prescribe, by regulation, a period of time to be the period of time within which a loss of that type must be incurred, determined from the date on which the member sustains the traumatic injury resulting in that loss, in order for that loss to be covered under this section.

(d)(1) Payments under this section for qualifying losses shall be made in accordance with a schedule prescribed by the Secretary, by regulation, specifying the amount of payment to be made for each type of qualifying loss, to be based on the severity of the qualifying loss. The minimum payment that may be prescribed for a qualifying loss is $25,000, and the maximum payment that may be prescribed for a qualifying loss is $100,000.

(2) As the Secretary considers appropriate, the schedule required by paragraph (1) may distinguish in specifying payments for qualifying losses between the severity of a qualifying loss of a dominant hand and of a qualifying loss of a nondominant hand.

(e)(1) During any period in which a member is insured under this section and the member is on active duty, there shall be deducted each month from the member’s basic or other pay until separation or release from active duty an amount determined by the Secretary (which shall be the same for all such members) as the share of the cost attributable to provided coverage under this section, less any costs traceable to the extra hazards of such duty in the uniformed services.

(2) During any month in which a member is assigned to the Ready Reserve of a uniformed service under conditions which meet the qualifications set forth in section 1965(5)(B) of this title and is insured under a policy of insurance purchased by the Secretary under section 1966 of this title, there shall be contributed from the appropriation made for active duty pay of the uniformed service concerned an amount determined by the Secretary (which shall be the same for all such members) as the share of the cost attributable to provided coverage under this section, less any costs traceable to the extra hazards of such duty in the uniformed services. Any amounts so contributed on behalf of any member shall be collected by the Secretary concerned from such member (by deduction from pay or otherwise) and shall be credited to the appropriation from which such contribution was made in advance on a monthly basis.

(3) The Secretary shall determine the premium amounts to be charged for traumatic injury protection coverage provided under this section.

(4) The premium amounts shall be determined on the basis of sound actuarial principles and shall include an amount necessary to cover the administrative costs to the insurer or insurers providing such insurance.

(5) Each premium rate for the first policy year shall be continued for subsequent policy years, except that the rate may be adjusted for any such subsequent policy year on the basis of the experience under the policy, as determined by the Secretary in advance of that policy year.

(6) The cost attributable to insuring members under this section for any month or other period specified by the Secretary, less the premiums paid by the members, shall be paid by the Secretary concerned to the Secretary. The Secretary shall allocate the amount payable among the uniformed services using such methods and data as the Secretary determines to be reasonable and practicable. Payments under this paragraph shall be made on a monthly basis or at such other intervals as may be specified by the Secretary and shall be made within 10 days of the date on which the Secretary provides notice to the Secretary concerned of the amount required.

(7) For each period for which a payment by a Secretary concerned is required under paragraph (6), the Secretary concerned shall contribute such amount from appropriations available for active duty pay of the uniformed service concerned.

(8) The sums withheld from the basic or other pay of members, or collected from them by the Secretary concerned, under this subsection, and the sums contributed from appropriations under this subsection, together with the income derived from any dividends or premium rate adjustments received from insurers shall be deposited to the credit of the revolving fund established in the Treasury of the United States under section 1869(d)(1) of this title.

(f) When a claim for benefits is submitted under this section, the Secretary of Defense or, in the case of a member not under the jurisdiction of the Secretary of Defense, the Secretary concerned, shall certify to the Secretary whether the member with respect to whom the claim is submitted—

(1) was at the time of the injury giving rise to the claim insured under Servicemembers’ Group Life Insurance for the purposes of this section; and

(2) has sustained a qualifying loss.

(g)(1) Payment for a loss resulting from traumatic injury may not be made under the insurance coverage under this section if the member dies before the end of a period prescribed by the Secretary, by regulation, for such purpose that begins on the date on which the member sustains the injury.

(2) If a member eligible for a payment under this section dies before payment to the member can be made, the payment shall be made to the beneficiary or beneficiaries to whom the payment would be made if the payment were life insurance under section 1967(a) of this title.

(h) Coverage for loss resulting from traumatic injury provided under this section shall cease at midnight on the date of the termination of the member’s duty status in the uniformed services that established eligibility for Servicemembers’ Group Life Insurance. The termination of coverage under this section is effective in accordance with the preceding sentence, notwithstanding any continuation after the date specified in that sentence of Servicemembers’ Group Life Insurance coverage pursuant to section 1968(a) of this title for a period specified in that section.

(i) Insurance coverage provided under this section is not convertible to Veterans’ Group Life Insurance.

(j) Regulations under this section shall be prescribed in consultation with the Secretary of Defense.

(k) Designation of Fiduciary or Trustee.—(1) The Secretary concerned, in consultation with the Secretary, shall develop a process for the designation of a fiduciary or trustee of a member of the uniformed services who is insured against traumatic injury under this section. The fiduciary or trustee so designated would receive a payment for a qualifying loss under this section if the member is medically incapacitated (as determined pursuant to regulations prescribed by the Secretary concerned in consultation with the Secretary) or experiencing an extended loss of consciousness.

(2) The process under paragraph (1) may require each member of the uniformed services who is insured under this section to—

(A) designate an individual as the member’s fiduciary or trustee for purposes of subsection (a); or

(B) elect that a court of proper jurisdiction designate an individual as the member’s fiduciary or trustee for purposes of subsection (a) in the event that the member becomes medically incapacitated or experiences an extended loss of consciousness.

(l)(1) If a claim for benefits under this section is denied, the Secretary concerned shall provide to the member at the same time as the member is informed of such denial a description of the following:

(A) Each reason for that denial, including a description of all the information upon which the denial is based and a description of the applicable laws, regulations, or policies, with appropriate citations, and an explanation of how such laws, regulations, or policies affected the denial.

(B) Each finding that is favorable to the member.

(2) Any finding favorable to the member as described in paragraph (1)(B) shall be binding on all subsequent reviews or appeals of the denial of the claim, unless clear and convincing evidence is shown to the contrary to rebut such favorable finding.