Life Insurance For Military Members: Private Options Explored

Military members can purchase life insurance from private insurers, but they are also provided with Servicemembers' Group Life Insurance (SGLI) coverage. SGLI offers low-cost term coverage of up to $500,000 to eligible service members, with the option to increase coverage by $50,000 increments. However, for some military members, particularly those with families, SGLI coverage may not be sufficient. In such cases, it is recommended to get additional life insurance from private insurers. When purchasing private life insurance, military members should be mindful of their deployment status, job responsibilities, and station of duty, as these factors can impact their application and premium rates.

Servicemembers' Group Life Insurance (SGLI)

To be eligible for full-time SGLI coverage, an individual must meet at least one of the following requirements:

• Be an active-duty member of the Army, Navy, Air Force, Space Force, Marines, or Coast Guard
• Be a commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS)
• Be a cadet or midshipman of the U.S. military academies or the Reserve Officers Training Corps (ROTC)
• Be a member of the Ready Reserve or National Guard, assigned to a unit, and scheduled for at least 12 periods of inactive training per year
• Be a volunteer in the Individual Ready Reserve (IRR) mobilisation category

For those in non-pay status with the Ready Reserve or National Guard, there are additional requirements for full-time SGLI coverage. These individuals must be scheduled for 12 periods of inactive training per year and drilling for points rather than pay. In this case, premiums are paid directly to the SGLI policy rather than being deducted from military pay.

SGLI provides several benefits, including:

• Coverage of up to $500,000
• 120 days of free coverage after leaving the military
• A free coverage extension of up to 2 years for those who are totally disabled when they leave the military
• Part-time coverage for Reserve members who don't qualify for full-time coverage

Service members can also opt for Servicemembers' Group Life Insurance Traumatic Injury Protection (TSGLI) as part of their SGLI coverage. TSGLI provides payments for certain losses during active duty, such as blindness or amputation. This coverage is billed at a flat rate of $1 per month.

Additionally, service members who are totally disabled at the time of discharge may be eligible for the Servicemembers' Group Life Insurance Disability Extension (SGLI-DE). This allows them to retain their life insurance coverage for up to 2 years after discharge at no additional cost.

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). VGLI provides an opportunity for veterans to continue their Servicemembers' Group Life Insurance (SGLI) coverage after leaving the military. This means that if you had SGLI coverage while on active duty, you may be eligible for VGLI.

To be eligible for VGLI, you must apply within a year and 120 days of being discharged, retired, or released from active duty. The amount of coverage you can get with VGLI depends on the amount of SGLI coverage you had when you left the military, ranging from $10,000 to $500,000. You can increase your coverage by $25,000 every five years until you reach $500,000 or turn 60 years old, whichever comes first.

VGLI premiums are based on your age and the amount of insurance coverage you choose. If you sign up for VGLI within 240 days of leaving the military, you won't need to prove that you're in good health. However, if you sign up after this 240-day period, you will need to provide evidence of good health.

You can apply for VGLI through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website or by mail/fax. You can also convert your VGLI policy into a commercial (civilian) policy at any time without providing proof of good health.

Private life insurance

Military personnel can purchase private life insurance policies, but there are some additional considerations to keep in mind during the application process. Your deployment status, job responsibilities, and station of duty will all be factors in the insurer's evaluation of your application.

Private insurance companies assess risk factors such as your job duties, rank, and deployment location to determine your premiums. Some insurers have specific coverage limits based on your rank, while others will follow the same income guidelines that apply to civilians, allowing you to buy a certain multiple of your income.

If you are a pilot or aviation crew member, you will likely be subject to flat extra fees, which are additional charges per $1,000 of coverage due to higher insurance risks. Military pilots and crew members typically pay a flat extra fee ranging from $2 to $12 per $1,000 of coverage.

When applying for private life insurance, insurers will ask if you have orders for deployment and about your job title and duties. If you are deploying to a country with a State Department-issued warning or cannot disclose your location, your application is more likely to be declined. Similarly, if your job involves combat or you are a member of Special Forces, Rangers, SEALs, or similar units, you may be declined a private policy.

It is important to note that some insurers do not have exclusions that void life insurance coverage if the insured is killed while deployed or in combat. In such cases, beneficiaries of military members will still receive death benefits.

Spouse and dependent coverage

Military members are provided with Servicemembers' Group Life Insurance (SGLI) coverage. However, this may not be sufficient for everyone. For instance, if you're married, have children, or care for elderly parents, you may need to get additional life insurance.

The Family Servicemembers' Group Life Insurance (FSGLI) plan is designed for spouses and dependent children of SGLI members. This plan provides up to $100,000 in term life insurance coverage for spouses and $10,000 per dependent child. The cost of spousal coverage is based on the spouse's age and coverage amount, while dependent children are insured at no additional cost.

Civilian spouses of service members signed up for full-time SGLI are automatically covered under FSGLI, and the premium is deducted from the service member's pay. On the other hand, military spouses married on or after January 2, 2013, are not automatically covered and must be enrolled by the service member through the SGLI Online Enrollment System (SOES).

The coverage for dependent children is free and cannot be turned down, reduced, or cancelled. It lasts until the child is 18 years old, but there are cases where coverage may be extended. For instance, if the child is a full-time student between the ages of 18 and 22, or if they become permanently and totally disabled before turning 18 and are no longer able to support themselves.

Spouses covered under FSGLI have the option to convert their coverage to a permanent, individual insurance policy within 120 days of the service member's separation from the military, written election to end spousal SGLI coverage, or written election to end their SGLI coverage. To convert the policy, the spouse must choose a company from the list of participating companies, apply at their local sales office, and provide the necessary documentation.

Eligibility and costs

The Department of Veterans Affairs offers Servicemembers' Group Life Insurance (SGLI) to active-duty members of the military. SGLI is a low-cost term coverage option for eligible service members. If you meet certain criteria, you will be automatically signed up for SGLI. You may be eligible for full-time SGLI coverage if you meet at least one of the following requirements:

• You are an active-duty member of the Army, Navy, Air Force, Space Force, Marines, or Coast Guard.
• You are a commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS).
• You are a cadet or midshipman of the U.S. military academies.
• You are a member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises.
• You are a member of the Ready Reserve or National Guard, assigned to a unit, and scheduled to perform at least 12 periods of inactive training per year.
• You are a volunteer in an Individual Ready Reserve (IRR) mobilization category.

If you are in non-pay status with the Ready Reserve or National Guard, you may still be eligible for full-time SGLI coverage if you meet both of the following requirements:

• You are scheduled for 12 periods of inactive training for the year.
• You are drilling for points rather than pay.

Note that if you are in non-pay status, you must pay your premiums directly.

SGLI offers coverage up to a maximum of $500,000, in increments of $50,000. The current basic SGLI premium rate is $0.06 per $1,000 of insurance coverage, which is automatically deducted from your base pay. This works out to $30 per month for the maximum coverage of $500,000. The premium includes an additional $1 per month for Traumatic Injury Protection coverage (TSGLI), which provides benefits for certain losses during active duty, such as blindness or amputation.

When you leave the military, you can apply for Veterans' Group Life Insurance (VGLI) within one year and 120 days from your discharge. VGLI allows you to keep your life insurance coverage for as long as you continue to pay the premiums. The amount of coverage you can get with VGLI is based on how much SGLI coverage you had when you left the military, ranging from $10,000 to $500,000. VGLI premium rates are based on your age and the amount of coverage you choose.

In addition to SGLI and VGLI, military members can also purchase private life insurance from commercial providers. However, there may be additional considerations during the application process, such as deployment status, job responsibilities, and physical location. Private insurance companies will assess risk factors such as job duties, rank, and deployment station to determine premiums. Some companies have specific coverage limits based on military rank, while others follow civilian income guidelines. It's important to compare rates and policies from different providers to find the best option for your needs.

Frequently asked questions