Active Military: Life Insurance Coverage And Benefits

Life insurance is a crucial aspect of financial planning, especially for those serving in the military. Active-duty military members have access to Servicemembers' Group Life Insurance (SGLI), a valuable benefit that provides low-cost term coverage. This insurance is underwritten by Prudential, a leading US insurer, and offers a maximum coverage of $500,000, with the option to choose coverage amounts in $50,000 increments. SGLI also includes Traumatic Injury Protection (TSGLI), providing additional benefits for losses incurred during active duty, such as amputation or blindness. The premium for SGLI is affordable at six cents for every $1,000 of coverage, with the TSGLI coverage costing a flat rate of $1 per month. Upon leaving the military, service members can apply for Veterans' Group Life Insurance (VGLI), which allows them to retain their life insurance coverage by continuing to pay premiums. Understanding and effectively utilizing these insurance options can provide financial security and peace of mind for military personnel and their families.

Servicemembers' Group Life Insurance (SGLI)

Eligibility

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

• Active-duty member of the Army, Navy, Air Force, Space Force, Marines, or Coast Guard
• Commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the US Public Health Service (USPHS)
• Cadet or midshipman of the US military academies
• Member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises
• 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
• Volunteer in an Individual Ready Reserve (IRR) mobilization category

If an individual is in non-pay status with the Ready Reserve or National Guard, they must meet two additional requirements for full-time SGLI coverage: they must be scheduled for 12 periods of inactive training for the year, and they must be drilling for points rather than pay. It is important to note that they will need to pay their premiums directly in this case.

Benefits

SGLI provides a range of benefits, including:

• Coverage up to $500,000, in $50,000 increments
• 120 days of free coverage from the date of leaving the military
• Extension of free coverage for up to 2 years if the member is totally disabled when they leave the military
• Part-time coverage for Reserve members who don't qualify for full-time coverage

Cost

The current basic SGLI premium rate is 6 cents per $1,000 of insurance coverage, with an additional $1 per month for Traumatic Injury Protection coverage (TSGLI). This means that the total monthly premium deduction for $500,000 of coverage is $31.

Applying and Managing Coverage

If eligible, individuals will be automatically signed up for SGLI through their service branch. They can manage their coverage and beneficiaries online through the SGLI Online Enrollment System (SOES).

Veterans' Group Life Insurance (VGLI)

Veterans Group Life Insurance (VGLI) is a group life insurance policy that the U.S. Department of Veterans Affairs (VA) offers to veterans. This policy allows you to retain your life insurance coverage after leaving the military as long as you continue to pay the premiums. The amount of coverage you can get ranges from $10,000 to $500,000 in term life insurance benefits, which is based on your previous Servicemembers' Group Life Insurance (SGLI) coverage amount.

To be eligible for VGLI, you must meet at least one of the following requirements:

• You had part-time SGLI coverage as a member of the National Guard or Reserve, and a duty-related injury or disability disqualified you from standard premium insurance rates.
• You had SGLI coverage while serving in the military and are within one year and 120 days of being released from active duty of 31 or more days.
• You are within one year and 120 days of retiring or being released from the Ready Reserve or National Guard.
• You are 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 are within one year and 120 days of being placed on the Temporary Disability Retirement List (TDRL).

If you sign up for VGLI within 240 days of leaving the military, you are not required to provide proof of good health. However, if you sign up after this period, you must submit evidence of your good health. You can apply for VGLI by applying online through the Office of Servicemembers' Group Life Insurance (OSGLI) or by mailing/faxing the Application for Veterans' Group Life Insurance (SGLV 8714).

VGLI premium rates are determined by your age and the desired amount of insurance coverage. You can increase your coverage by $25,000 every five years until you reach the age of 60, up to a maximum of $500,000. Additionally, you have the option to convert your VGLI coverage to an individual insurance policy at standard premium rates without providing health information.

Service-Disabled Veterans' Insurance (S-DVI)

Service-Disabled Veterans Insurance (S-DVI) is a type of life insurance coverage offered by the Department of Veterans Affairs (VA) to veterans with a service-connected disability. The program provides low-cost permanent or term life insurance plans with a maximum face value of $10,000. It is important to note that the S-DVI program stopped accepting new applications after December 31, 2022, but existing beneficiaries can retain their coverage.

To be eligible for S-DVI, veterans must meet specific criteria:

• Released from active duty without a dishonorable discharge on or after April 25, 1951.
• Rated for a service-connected disability, even if the rating is 0%.
• In good health, excluding any service-related conditions.
• Application submitted within two years of receiving the disability rating from the VA.

Veterans who are totally disabled may be eligible for a waiver of the monthly premiums. Additionally, those who qualify for the premium waiver can obtain an additional policy of up to $30,000 if they pay the premiums. This supplemental S-DVI coverage is also available to veterans under 65 years of age, who must apply within a year of receiving the premium waiver approval.

The premium rates for S-DVI plans are determined by the veteran's age, the amount of insurance coverage, and the chosen coverage plan. It is recommended to compare these rates with those offered by commercial insurance companies, especially if the disability is not severe, as better rates may be available elsewhere.

Gratuitous S-DVI is a posthumous benefit granted to veterans who met the basic eligibility requirements but did not apply due to continued mental incompetence caused by a service-connected disability. In such cases, the VA must receive the application for payment within two years of the veteran's death.

Veterans' Mortgage Life Insurance (VMLI)

To be eligible for VMLI, veterans must meet several requirements. Firstly, they must have a severe disability that has been determined to be caused or exacerbated by their military service. Secondly, they must have received an SAH grant to modify their home to enhance their independent living. Thirdly, they must hold the title to the home and have a mortgage on it. Lastly, they must be under 70 years of age.

The VMLI program offers up to $200,000 in mortgage life insurance coverage, which is paid directly to the bank or lender that holds the mortgage. The coverage amount is determined by the outstanding balance on the mortgage and decreases as the loan is paid off. VMLI does not have any loan or cash value, nor does it pay dividends to policyholders.

To apply for VMLI, veterans must first apply for an SAH grant. If approved for the grant, the loan guaranty agent will inform them of their eligibility for VMLI. Veterans who already have an SAH grant can inquire about VMLI with their agent, who will assist in completing the necessary forms. It is important to note that VMLI applications must be submitted before the veteran's 70th birthday.

The cost of VMLI premiums is based on several factors, including the current mortgage balance, the remaining term of the mortgage, and the amount of coverage required. Veterans can use the VMLI Premium Calculator to estimate their potential premium.

In summary, VMLI is a valuable program that provides mortgage protection insurance to disabled veterans who have adapted their homes to accommodate their service-related disabilities. It offers peace of mind and financial security to veterans and their families by ensuring that their mortgages will be paid off in the event of their passing.

Family Servicemembers' Group Life Insurance (FSGLI)

Non-military spouses are covered automatically for $100,000 or the amount of the member's coverage, whichever is less. Military spouses must apply for coverage, and the premiums are based on the spouse's age and amount of coverage. Dependent children are covered for $10,000 each at no cost to the member.

To qualify for FSGLI, the servicemember must be on active duty and covered by full-time SGLI, or they must be a member of the National Guard or Ready Reserve covered by full-time SGLI. Spouses of servicemembers covered under SGLI and dependent children of servicemembers covered under SGLI may be eligible for FSGLI.

The coverage amount for spouses under FSGLI is up to a maximum of $100,000, not exceeding the servicemember's SGLI coverage. Dependent children can receive up to $10,000 in coverage and are automatically covered. The coverage for dependent children can be extended in some cases. 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 can convert their FSGLI coverage to a permanent, individual insurance policy within 120 days from the date of the servicemember's separation from the military or written election to end spousal or SGLI coverage. However, only certain types of policies can be converted, and supplementary policy benefits are not considered part of the conversion policy. To convert FSGLI coverage, spouses must choose a company from the list of participating companies and apply at their local sales office. They must also provide a copy of the most recent Leave and Earnings Statement (LES) and proof of coverage.

Frequently asked questions