Life Insurance For Veterans: What You 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, life insurance options are available to cater to their unique needs and circumstances. The US Department of Veterans Affairs (VA) offers a range of life insurance programs, including the Servicemembers' Group Life Insurance (SGLI) and Veterans' Group Life Insurance (VGLI), ensuring financial protection for veterans, service members, and their families. With various plans, eligibility criteria, and benefits, veterans can choose the most suitable option for themselves and their dependents. Understanding these life insurance offerings is essential for veterans to make informed decisions and secure their financial future.

Veterans' Group Life Insurance (VGLI)

Eligibility

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

• You had 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 you for standard premium insurance rates.
• You had SGLI while in the military and are within 1 year and 120 days of being released from an active-duty period of 31 or more days.
• You are within 1 year and 120 days of retiring or being released from the Ready Reserve or National Guard.
• You are within 1 year and 120 days of assignment to the Individual Ready Reserve (IRR) of a branch of service or to the Inactive National Guard (ING). This includes members of the United States Public Health Service Inactive Reserve Corps (IRC).
• You are within 1 year and 120 days of being put on the Temporary Disability Retirement List (TDRL).

Benefits

With VGLI, you can receive between $10,000 and $500,000 in term life insurance benefits, depending on how much SGLI coverage you had when you left the military. You can also increase your coverage by $25,000 every 5 years, up to $500,000, until you turn 60.

Applying for VGLI

To apply for VGLI, you must do so within 1 year and 120 days of leaving the military. If you apply within 240 days, you won't need to prove you're in good health. After this period, you will need to submit evidence of good health. You can apply through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website or by mail/fax using the Application for Veterans' Group Life Insurance (SGLV 8714).

Premium Rates

VGLI premium rates are based on your age and the amount of insurance coverage you want. As of April 1, 2021, the monthly premium rates range from $0.05 per $1,000 of coverage for those under 25 years old to $2.48 per $1,000 of coverage for those over 70.

Choosing and Updating Beneficiaries

You can choose your beneficiaries and change them as needed. To update your beneficiary information, you can access your policy online through the Prudential Life Insurance Company of America or fill out a VGLI Beneficiary Designation form (SGLV 8721).

Converting to a Commercial Policy

You can convert your VGLI policy into a commercial (civilian) policy at any time. The conversion policy must be a permanent policy, such as a whole life policy, and you'll be able to convert at standard premium rates without providing proof of good health.

Servicemembers' Group Life Insurance (SGLI)

SGLI participants can always make changes to their coverage amount or beneficiary (the person who receives the money in the event of the insured person's death) by using the SGLI Online Enrollment System (SOES), which is available on the Defense Manpower Data Center website. Participants can reduce their insurance by $50,000 increments or cancel it entirely.

SGLI costs 6 cents per $1,000 of coverage, with an additional $1 monthly charge for Traumatic Injury Protection (TSGLI), which provides coverage for losses due to traumatic injuries. This brings the monthly premium to $31 for $500,000 worth of coverage.

When a service member leaves the military, their SGLI coverage will remain in effect for 120 days after their discharge. After leaving the military, they can convert their SGLI to VGLI (Veterans' Group Life Insurance), a similar program.

SGLI also includes TSGLI, which provides financial assistance to members so their loved ones can be with them during their recovery from injuries. The coverage ranges from $25,000 to $100,000, depending on the nature of the injury.

Family Servicemembers' Group Life Insurance (FSGLI)

To be eligible for FSGLI, the servicemember must be on active duty and covered by full-time SGLI or be a member of the National Guard or Ready Reserve covered by full-time SGLI. Spouses of servicemembers covered under SGLI and their dependent children are eligible for FSGLI. Dependent children are defined as any unmarried, natural, legally adopted, or stepchildren who are members of the servicemember's household and are under the age of 18, or between the ages of 18 and 23 if they are full-time students.

Dependent children are automatically covered at no cost until the age of 18, and coverage may be extended if the child is a full-time student or becomes permanently and totally disabled before turning 18. Spouses can be covered for up to $100,000, and the premium for their coverage will increase as they age. Servicemembers can make changes to spousal coverage, such as reducing or cancelling it, through the SGLI Online Enrollment System (SOES).

Spouses can convert their FSGLI coverage to a permanent, individual insurance policy within 120 days of the servicemember's separation from the military or the end of their SGLI coverage. To convert the policy, spouses must choose a company from the list of participating companies, apply at their local sales office, and provide documentation of the servicemember's coverage and separation.

Traumatic Injury Protection Life Insurance (TSGLI)

To be eligible for TSGLI benefits, individuals must meet specific requirements:

• They must be insured by SGLI at the time of the traumatic injury.
• The injury must result in a scheduled loss, such as amputations, blindness, or paraplegia, that is directly caused by the traumatic event.
• The traumatic injury must occur before midnight of the day the individual separates from the uniformed services.
• The scheduled loss must occur within two years (730 days) of the traumatic injury.
• The individual must survive for at least seven full days from the date and time of the traumatic injury.

The premium for TSGLI is $1 per month for most service members. To file a claim, individuals can download and complete the SGLV 8600 Application for TSGLI Benefits form. If a claim has been denied in the past, individuals can file a new claim or submit an appeal using the SGLV 8600A TSGLI Appeal Request Form.

TSGLI has recently been expanded to include benefits for limb reconstruction surgeries, inpatient hospital care at critical care facilities, and therapeutic passes to aid in the transition from an inpatient facility to living at home. These expanded benefits are available for eligible individuals who file a new claim.

Veterans' Mortgage Life Insurance (VMLI)

VMLI offers up to $200,000 in mortgage life insurance, which is paid directly to the bank or lender that holds the mortgage. The amount of coverage is equal to the outstanding mortgage balance but does not exceed $200,000. It is important to note that VMLI is a decreasing-term insurance, meaning that the coverage amount decreases as the mortgage balance is paid off, and the coverage ends once the mortgage is fully paid off. Additionally, VMLI does not have any loan or cash value, and it does not pay dividends.

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

• Have a severe disability that is service-related, meaning it was caused or aggravated by their military service.
• Have received an SAH grant.
• Hold the title to the home.
• Have a mortgage on the home.
• Be under 70 years old.

To apply for VMLI, veterans need to complete and submit Form 29-8636, Application for Veterans Mortgage Life Insurance (VMLI), following the included instructions. It is important to note that VMLI must be applied for before the veteran's 70th birthday. The VMLI Premium Calculator can be used to estimate the premium.

VMLI provides valuable financial protection for eligible disabled veterans and their families, ensuring that their loved ones will not be burdened by the mortgage in the event of the veteran's death.

Frequently asked questions