Vgli Life Insurance: Can Retirees Have Additional Coverage?

Veterans' Group Life Insurance (VGLI) is a life insurance program that allows US service members to continue the Servicemembers' Group Life Insurance (SGLI) coverage they had while in active military service. VGLI is a term policy for ex-members of the military that offers many benefits not available in the private life insurance market. Premium rates are age-based only and do not consider gender, tobacco use, job, or recreational activities—factors that can increase premiums with private insurance policies. VGLI coverage is issued in multiples of $10,000 up to a maximum of $400,000 to $500,000, based on the amount of SGLI coverage the veteran had upon leaving the military. Members with full-time SGLI coverage are eligible for VGLI when they leave the service, and they have one year and 120 days from their date of separation from service to apply. However, if retirees can medically qualify, there are alternatives to VGLI, such as AAFMAA, which can save them thousands of dollars in premiums.

Converting SGLI to VGLI

Servicemembers' Group Life Insurance (SGLI) is a type of term life insurance offered to members of the military during active service. Veterans' Group Life Insurance (VGLI) is a renewable term policy for ex-members of the military that allows them to carry over their SGLI policy after leaving the service, for as long as they continue to pay the premiums.

To convert SGLI to VGLI, you must meet certain eligibility requirements and follow specific steps. Here is a detailed guide:

Eligibility:

• You must have held an SGLI policy while in the military.
• You must be within one year and 120 days of leaving the military. This includes being released from active duty, retiring, or being released from the Ready Reserve or National Guard.
• If you had part-time SGLI as a member of the National Guard or Reserve and suffered an injury or disability while on duty that disqualified you for standard premium rates, you may still be eligible for VGLI.

Steps to Convert:

• Apply for VGLI within one year and 120 days of leaving the military. The sooner you apply, the fewer requirements you need to meet.
• If you apply within 240 days of leaving the service, you won't need to provide proof of good health. After this period, you will need to submit evidence of good health.
• Apply through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website or by mail/fax.
• You can download and fill out the Application for Veterans' Group Life Insurance (SGLV 8714) and send it to OSGLI at their Philadelphia address.
• If your VGLI policy has expired, you will need to fill out an Application for Reinstatement of VGLI Coverage (SGLV 180).

Benefits of Converting:

• VGLI offers $10,000 to $400,000 in life insurance benefits, based on the amount of SGLI coverage you had when leaving the military.
• You can increase your coverage by $25,000 every five years up to $500,000 until you turn 60.
• VGLI premium rates are based only on age and amount of coverage, not gender, tobacco use, job, or recreational activities, which are common factors with private insurance policies.
• Your VGLI coverage will not end or decrease at a specific age unless you request it or fail to pay premiums.
• There is no exclusion for applicants with mental health issues, PTSD, or TBI.
• VGLI offers a 5% discount on annual premium payments and smaller discounts for quarterly and semi-annual payments.
• Premiums can be automatically deducted from military retirement pay, VA compensation payment, or your bank account.
• VGLI has no contestable period, meaning there is no waiting period between when coverage begins and when a claim would be paid.

In summary, converting SGLI to VGLI allows eligible veterans to continue their life insurance coverage from active service into their post-military lives, with the option to increase coverage over time and benefit from premium rates that are not influenced by certain personal factors.

VGLI premium rates

Veterans' Group Life Insurance (VGLI) is a term policy for ex-members of the military that allows them to continue the group coverage they had while in active service. VGLI premium rates are based on age and the amount of insurance coverage desired. The rates are the same for smokers and non-smokers, and they do not consider gender.

As of April 1, 2021, the monthly premium rates for VGLI are as follows:

• For $10,000 in coverage, the monthly premium rate is $6.50 for those under 29 years old, $7.20 for those between 30-34, $8.10 for those between 35-39, and so on.
• For $50,000 in coverage, the monthly premium rate is $32.50 for those under 29 years old, $35.20 for those between 30-34, $39.60 for those between 35-39, and so on.
• For $100,000 in coverage, the monthly premium rate is $65.00 for those under 29 years old, $70.40 for those between 30-34, $79.20 for those between 35-39, and so on.
• For $400,000 in coverage, the monthly premium rate is $260.00 for those under 29 years old, $281.60 for those between 30-34, $318.40 for those between 35-39, and so on.

The maximum coverage available is $500,000, and the rates increase with age. VGLI premium rates can be found on the Veterans Affairs website, with different rates for policies effective or renewed before and after October 1, 2002.

VGLI eligibility criteria

Veterans' Group Life Insurance (VGLI) is a life insurance program that allows service members to convert their Servicemembers' Group Life Insurance (SGLI) coverage to term life insurance that is renewable every five years.

• You must have had SGLI while in the military and be within one year and 120 days of being released from an active-duty period of 31 or more days.
• You must be within one year and 120 days of retiring or being released from the Ready Reserve or National Guard.
• You must be within one year and 120 days of assignment to the Individual Ready Reserve (IRR) or the Inactive National Guard (ING). This includes members of the United States Public Health Service Inactive Reserve Corps (IRC).
• You must be within one year and 120 days of being put on the Temporary Disability Retirement List (TDRL).
• You must have had part-time SGLI as a member of the National Guard or Reserve and suffered an injury or disability while on duty that disqualified you for standard premium insurance rates.

It's important to note that you have one year and 120 days from the date you leave the service to apply for VGLI. If you apply within 240 days, you won't need to provide evidence of good health. However, if you apply after the 240-day period, you will need to submit proof of good health.

VGLI vs. other insurance plans

Veterans' Group Life Insurance (VGLI) is a life insurance program that allows US service members to convert their Servicemembers' Group Life Insurance (SGLI) coverage to term life insurance that is renewable every five years.

When considering VGLI, it is important to evaluate whether it will meet your life insurance needs. Ask yourself:

• Will the premiums be affordable?
• Is the coverage enough to meet your needs or will it serve as a supplement to other coverage?
• Is term insurance your best option?
• Does the plan contain features that are important to you?

Anyone meeting the VGLI eligibility criteria should consider making VGLI part of their insurance portfolio. However, members with medical conditions that may affect their insurability should make obtaining VGLI a priority in their insurance planning. Most insurance plans use a health review to determine eligibility for insurance coverage, and certain medical conditions can make it difficult to pass this health review. In the case of VGLI, eligible members can apply during the "240-day no-health" application period and be approved without any health review, regardless of the severity of their health conditions.

VGLI offers many benefits not available in the private life insurance market. Premium rates are age-based only and do not consider gender, tobacco use, job, or recreational activities—all factors that can increase premiums with private insurance policies. In addition, the policy does not terminate at a certain age (such as 65); it remains in force for as long as the policyholder pays the premiums.

However, if you can medically qualify, there are alternatives to VGLI that may be more cost-effective, such as AAFMAA. An AAFMAA Level Term II policy can save you thousands of dollars in premiums over the life of the policy.

Within 120 days of leaving service, you have the option to convert your current SGLI policy into a civilian one. Several commercial insurance carriers have special policies for ex-members of the armed forces. You can also convert a VGLI policy to a commercial individual policy. However, the conversion policy must be a permanent policy, such as a whole life policy, and offered by a select group of carriers.

VGLI application process

The VGLI application process is straightforward. Veterans' Group Life Insurance (VGLI) is a program that allows former military members to continue their life insurance coverage after leaving the service. The program is administered by the Department of Veterans Affairs (VA) and underwritten by the Prudential Insurance Company of America.

To apply for VGLI, eligible service members must complete the SGLV 8714 form, also known as the Application for Veterans' Group Life Insurance. Alternatively, they can apply through the OSGLI (Office of Servicemembers' Group Life Insurance) using the Prudential website. The application must be submitted within one year and 120 days from the date of separation from military service.

If you apply within 240 days of your separation, you won't need to provide evidence of good health. However, if you apply after 240 days, you'll need to answer health questions to determine your eligibility, and your health will be taken into consideration. It's important to note that the sooner you apply for VGLI, the more likely you are to secure coverage without the need for a medical examination.

VGLI offers $10,000 to $400,000 in life insurance benefits, based on the amount of coverage the veteran had upon leaving the military. The maximum amount of coverage a veteran may initially qualify for is the same as their Servicemembers' Group Life Insurance (SGLI) policy. Veterans may opt for lower levels of coverage in $10,000 increments. Coverage can be increased after enrolment by $25,000 every five years up to a maximum of $500,000 until the veteran reaches 60.

VGLI premium rates are based on age and coverage amount only. They do not consider gender, tobacco use, job, or recreational activities, which can increase premiums with private insurance policies. VGLI premiums can be paid monthly, quarterly, semi-annually, or annually, with a 5% discount for annual payments.

In summary, VGLI is a valuable option for veterans seeking to continue their life insurance coverage after leaving the military, especially those with health issues or high-risk jobs. The application process is simple and can be completed online or by mail within one year and 120 days of separation from service. Applying within 240 days ensures no health review is required, making it a priority for those with medical conditions.

Frequently asked questions