Life Insurance And Veteran Suicide: What Families Need To Know

Life insurance is a crucial aspect of financial planning, providing peace of mind and security for individuals and their loved ones. For veterans, understanding their life insurance options and coverage is essential, especially in light of the challenges they face during and after their service. Veterans' life insurance policies often include unique provisions, and it is important to clarify whether suicide is covered under these policies. This topic is delicate and often misunderstood, but it is crucial to know what protections are in place for veterans and their beneficiaries.

Veterans' Group Life Insurance (VGLI)

Veterans Group Life Insurance (VGLI)

Veterans Group Life Insurance (VGLI) is a type of life insurance offered to veterans in the United States. It allows veterans to convert their Servicemembers' Group Life Insurance (SGLI) to a civilian program of lifetime renewable term coverage after separation from service.

Eligibility for VGLI

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

• Part-time Servicemembers' Group Life Insurance (SGLI) as a member of the National Guard or Reserve and suffered an injury or disability while on duty that disqualified them for standard premium insurance rates.
• Had SGLI while in the military and be within 1 year and 120 days of being released from an active-duty period of 31 or more days.
• Be within 1 year and 120 days of retiring or being released from the Ready Reserve or National Guard.
• Be within 1 year and 120 days of assignment to the Individual Ready Reserve (IRR) or Inactive National Guard (ING).
• Be within 1 year and 120 days of being put on the Temporary Disability Retirement List (TDRL).

Benefits of VGLI

VGLI provides term life insurance benefits ranging from $10,000 to $500,000. The amount is based on the SGLI coverage the veteran had when they left the military. Veterans can also increase their coverage by $25,000 every 5 years, up to $500,000, until they reach the age of 60.

Applying for VGLI

To apply for VGLI, veterans must do so within 1 year and 120 days of leaving the military. If applying within 240 days, no proof of good health is required. After the 240-day period, evidence of good health is necessary. Applications can be made through the Office of Servicemembers' Group Life Insurance (OSGLI) online or by mail/fax using the Application for Veterans' Group Life Insurance (SGLV 8714).

VGLI Premiums

VGLI premium rates are determined by the veteran's age and the desired amount of insurance coverage.

Updating Beneficiaries

Veterans have the option to choose their beneficiaries and can update them as needed. This can be done by accessing their policy online or by filling out a VGLI Beneficiary Designation form (SGLV 8721).

Converting VGLI to an Individual Policy

VGLI coverage can be converted to an individual insurance policy by choosing a new insurance company and applying at their local sales office. A confirmation letter from OSGLI is required, and the conversion policy must be a permanent policy, such as a whole life policy.

Suicide Clause

VGLI, along with SGLI, is unique in that it typically pays out the death benefit to the insured's beneficiaries regardless of the cause of death, including suicide. This means that even in cases of suicide, VGLI provides financial coverage for veterans' survivors.

Servicemembers' Group Life Insurance (SGLI)

SGLI offers benefits such as coverage up to $500,000 in $50,000 increments, 120 days of free coverage from the date a servicemember leaves the military, and the option to extend free coverage for up to two years if the servicemember is totally disabled when they leave. Part-time coverage is also available for Reserve members who don't qualify for full-time coverage.

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 for $500,000 of coverage, the monthly premium is $31.

Servicemembers can choose their level of coverage or even refuse it completely. They can also choose their beneficiaries and change them as needed. To make changes to their SGLI coverage, servicemembers can submit their requests online through the SGLI Online Enrollment System (SOES).

When a servicemember leaves the military, they can apply to convert their SGLI coverage to Veterans' Group Life Insurance (VGLI) within one year and 120 days from their date of discharge, for up to the amount of coverage they had through SGLI. They also have the option to convert their SGLI coverage to a permanent, individual insurance policy (such as whole life) within 120 days of their discharge without proof of good health.

In the unfortunate event of a servicemember's death, family members can file a Claim for Death Benefits (SGLV 8283) to receive an insurance payout.

Suicide clause

A life insurance suicide clause is a provision that directly impacts whether beneficiaries receive financial support or not. This clause typically applies during the first one to two years after a policy is issued, depending on the insurer and state regulations. During this exclusion period, if the policyholder dies by suicide, the insurer may limit or deny the death benefit payout. Instead, they might refund the premiums paid up to that point. After this exclusion period, most life insurance policies do cover suicide, and beneficiaries are entitled to the full death benefit.

The suicide clause is intended to protect the insurance company from financial risk by preventing an individual from taking out a policy with the intention of ending their life soon after. The exact duration of the suicide clause varies—while most states enforce a standard two-year period, some have shorter periods of one year.

It's important to note that different types of life insurance policies may have specific clauses and conditions that impact coverage in these circumstances. Military-focused life insurance policies, like those offered by Veterans' Group Life Insurance (VGLI) and Servicemembers' Group Life Insurance (SGLI), typically pay out the death benefit to the insured's beneficiaries regardless of the cause of death, including suicide.

For traditional life insurance policies, including term and permanent life insurance, there is usually a suicide clause that applies for a specific period. After this period expires, the policy generally covers suicide.

Veterans' Mortgage Life Insurance (VMLI)

To be eligible for VMLI, veterans must meet the following criteria:

• Have a severe disability that is concluded to be caused or worsened by their military service.
• Have received an SAH grant to buy, build, or modify a home to live more independently (e.g., installing ramps or widening doorways).
• Hold the title to the home.
• Have a mortgage on the home.
• Be under 70 years old.

The VMLI premium is calculated based on the current mortgage balance, the number of remaining mortgage payments, and the amount of VMLI coverage needed. It is important to note that VMLI does not have any loan or cash value, and it does not pay dividends.

To apply for VMLI, veterans must first apply for an SAH grant. If approved for the SAH grant, the loan guaranty agent will determine eligibility for VMLI. The next step is to complete the Veterans' Mortgage Life Insurance Statement (VA Form 29-8636) with the assistance of the agent. It is important to note that veterans must apply for VMLI before their 70th birthday.

VMLI provides valuable financial protection for eligible disabled veterans and their families, ensuring that their homes are protected in the event of the veteran's death.

Service-Disabled Veterans Life Insurance (S-DVI)

S-DVI policyholders can choose to either apply for the new Veterans Affairs Life Insurance (VALife) program or keep their existing S-DVI policy. If they apply for VALife before December 31, 2025, they can retain their S-DVI coverage during the 2-year waiting period for VALife benefits. However, they must pay premiums for both policies during this period. On the other hand, if they apply for VALife on or after January 1, 2026, their S-DVI coverage will end the day their VALife application is approved, and they will only need to pay VALife premiums during the waiting period.

The premium rates for S-DVI plans depend on the amount of insurance, the coverage plan requested, and whether payments are made monthly or annually. In certain cases, the basic S-DVI policy provides a premium waiver for veterans who are totally disabled. However, if a policyholder has supplemental S-DVI coverage, they must pay premiums for this supplemental coverage even if they have a waiver for their basic S-DVI premiums.

The S-DVI program is just one of the life insurance options offered by the Department of Veterans Affairs (VA). Other programs include Servicemembers' Group Life Insurance (SGLI), Veterans' Group Life Insurance (VGLI), and VALife, which was introduced in 2023 and offers guaranteed acceptance whole life coverage of up to $40,000 to veterans with service-connected disabilities.

Frequently asked questions