Life Insurance For Soldiers: What You Need To Know

Soldiers going to war can get life insurance through the military, which is known as Servicemembers' Group Life Insurance (SGLI). SGLI is offered through the Department of Veterans Affairs (VA) and underwritten by Prudential, one of the largest life insurers in the US. It provides coverage of up to $500,000, with the option to reduce this in $50,000 increments. SGLI includes traumatic injury protection, which pays out varying amounts of short-term financial support in the event of a severe injury. The premium for the maximum coverage is $31 per month, which is automatically deducted from the soldier's military pay. It's important to note that some private life insurance policies may not pay out if the insured dies as a result of war, so soldiers should carefully review the terms and conditions before purchasing.

Servicemembers' Group Life Insurance (SGLI)

SGLI is available to active-duty members of the Army, Navy, Air Force, Marines, Space Force, or Coast Guard; commissioned members of the U.S. Public Health Service (USPHS) or the National Oceanic and Atmospheric Administration (NOAA); members, cadets, or midshipmen of the U.S. military academies, Reserve Officers Training Corps (ROTC), the Ready Reserve, or National Guard; and volunteers in the Individual Ready Reserve (IRR) mobilisation category.

SGLI is a good option for those who may be considered too high-risk by private insurance companies due to age, health conditions, or other factors. However, some families may need an additional policy as SGLI may not provide sufficient coverage. When leaving the military, you can convert your SGLI policy to a Veterans' Group Life Insurance (VGLI) policy, although VGLI rates are based on age and can become unaffordable as you get older.

Veterans' Group Life Insurance (VGLI)

Veterans Group Life Insurance (VGLI) is a group life insurance policy offered by the U.S. Department of Veterans Affairs (VA). It is available to veterans who have been discharged from active duty within one year and 120 days of applying for coverage. VGLI provides coverage for up to the amount of Servicemembers' Group Life Insurance (SGLI) that the veteran had while enlisted and continues as lifetime renewable term coverage.

Part-time SGLI policyholders who suffered an injury or disability that disqualifies them from standard premium insurance rates may also be eligible for VGLI coverage. Additionally, members of the Temporary Disability Retirement List (TDRL) who were placed on the list within one year and 120 days may also qualify for VGLI.

VGLI offers term life insurance benefits ranging from $10,000 to $500,000, based on the amount of SGLI coverage the veteran had when they left the military. Policyholders can increase their coverage by $25,000 every five years until they reach the age of 60. The premium rates for VGLI are based on the age of the veteran and the amount of insurance coverage they choose.

To apply for VGLI, veterans must do so within one year and 120 days of leaving the military. If applying within 240 days, proof of good health is not required. However, if applying after this period, evidence of good health must be submitted. Applications can be made online, by mail, or by fax.

VGLI policies can be converted into commercial (civilian) policies at any time, with standard premium rates and without providing proof of good health.

Traumatic Injury Protection (TSGLI)

TSGLI provides $25,000 to $100,000 in short-term financial support to help in recovery from a traumatic injury. This includes a therapeutic pass to help transition from an inpatient facility to living at home.

To be eligible for TSGLI, you must meet the following requirements:

• Be insured by Servicemembers' Group Life Insurance (SGLI) when you experience a traumatic injury.
• Incur a scheduled loss that is a direct result of the traumatic injury.
• Suffer the traumatic injury before midnight on the day you leave the military.
• Suffer a scheduled loss within 2 years (730 days) of the traumatic injury.
• Survive for a period of not less than 7 full days from the date of the traumatic injury.

You are automatically covered by TSGLI if you are signed up for full-time SGLI. To receive TSGLI payments, you will need to apply using the Application for TSGLI Benefits (SGLV 8600). Once complete, you can fax, email, or mail it to the VA.

The premium for TSGLI is a flat rate of $1 per month for most service members.

War clauses in life insurance policies

War exclusion clauses in insurance policies specifically exclude coverage for acts of war, such as invasions, insurrections, revolutions, military coups, and terrorism. These clauses are included because insurance companies cannot accurately compute the premiums to charge for damages sustained by war, and the cost of the claims could potentially bankrupt the company.

War exclusion clauses were expanded and became standard after the September 11 terrorist attacks. Before the attacks, most war exclusion clauses applied only to those contractually assuming liability, such as soldiers and military contractors. However, after September 11, "war and terrorism" exclusions were quickly added to liability policies, widening the scope of the war exclusion clause.

Life insurance policies for military personnel will often include a war exclusion clause. However, some policies, such as those offered by USAA, do not contain a war clause. It is important for service members to carefully review their life insurance policies and ensure that their families will receive benefits in the event of their death as a result of combat duty.

Private life insurance for soldiers

Soldiers have access to group life insurance through the military, known as Servicemembers' Group Life Insurance (SGLI). However, this may not be sufficient for those with families or other financial commitments. Private life insurance can be purchased to supplement SGLI, but there are several factors soldiers should be aware of when applying for private life insurance.

Deployment Status and Job Responsibilities

To be eligible for private life insurance, soldiers must be in the U.S. when applying. Additionally, if a soldier has orders for deployment to a country with a State Department-issued warning, their application may be declined. Soldiers in non-combat roles are more likely to be approved for private life insurance. Those in Special Forces, Rangers, SEALs, and similar units are more likely to be declined coverage.

Military Rank

Some insurance companies have specific coverage limits based on military rank, with higher-ranking officials considered lower risk due to their reduced likelihood of seeing combat. Coverage limits vary, but an example is $250,000 for pay grades E1 to E5, $500,000 for pay grades E6 to E9 and W1 to W5, and $1,000,000 for pay grades O-1 to O-10. However, some insurers will follow civilian income guidelines, which allow individuals to buy up to a certain multiple of their income, e.g., up to 25 times their income if under 40 years old.

Aviation Crew Members

Most pilots and aviation crew members are subject to higher life insurance rates or flat extra fees due to occupational hazards. Military pilots and crew typically pay an extra $2 to $12 per $1,000 of coverage, while non-frontline crew members may pay up to $2 extra per $1,000.

War Clauses

Some private life insurance policies include war clauses, meaning the company will not pay out if the insured dies as a result of war. It is important to review the policy carefully to ensure it provides the desired coverage.

Spouses and Dependents

Spouses and dependent children of soldiers are not covered by SGLI but can be covered under the Family Servicemembers' Group Life Insurance (FSGLI) plan. FSGLI provides up to $100,000 in term life insurance coverage for spouses and $10,000 per dependent child, with child coverage typically free and spousal coverage based on age and amount. Spouses of soldiers can also explore private life insurance options available to other civilians.

In conclusion, while soldiers have access to SGLI, private life insurance may be necessary to meet their financial needs. When considering private life insurance, it is important to be aware of the factors that may affect eligibility and coverage, such as deployment status, job responsibilities, rank, aviation involvement, war clauses, and options for spouses and dependents.

Frequently asked questions