The U.S. Department of Veterans Affairs (VA) and Prudential Financial Inc. have come up with servicemembers’ and veterans’ life program beneficiary protection rules.

The Servicemembers’ Group Life Insurance (SGLI) and Veterans’ Group Life Insurance (VGLI) programs will be using new documents that ask the beneficiary to choose between getting a lump-sum check, a lump sum in an Alliance Account retained asset account (RAA), or a stream of 36 monthly benefits payments.

Prudential, Newark, N.J. (NYSE:PRU), has agreed to make the adjustments, according to VA Chief of Staff John Gingrich

The VA also is updating SGLI and VGLI information, such as lists of frequently asked questions and handbooks, to give better explanations of the RAA benefits payout option.

The department will require Prudential to contact beneficiaries with RAAs that stay open 6 months or longer to confirm that the beneficiary understands the terms of the account.

The VA also will work harder to encourage beneficiaries to use the free financial counseling service, officials say.

“The most important thing we can do is ensure that beneficiaries have options that are clear, competitive, and come at no personal cost during a time of emotional stress,” Gingrich says in a statement.

In related news, Bloomberg is reporting that the VA gave prudential permission in 2009 to use RAAs as the default life benefits payout option.