Life Insurance And Veteran Benefits: What's The Connection?

Life insurance is a crucial aspect of financial planning, and for veterans, understanding their options for securing their families' future is essential. Veterans' benefits encompass various programs, including life insurance plans, that cater to the specific needs of those who have served. These insurance policies are designed to provide financial security and peace of mind to veterans and their loved ones. With several options available, such as the Servicemembers' Group Life Insurance (SGLI) and Veterans' Group Life Insurance (VGLI), it is important to explore the eligibility criteria, coverage details, and application processes to ensure veterans can make informed decisions about their future. This introduction will delve into the range of life insurance benefits available to veterans, highlighting the importance of timely enrollment and the potential for seamless transitions from military service to civilian life.

Servicemembers' Group Life Insurance (SGLI)

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

• You're an active-duty member of the Army, Navy, Air Force, Space Force, Marines, or Coast Guard.
• You're a commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS).
• You're a cadet or midshipman of the U.S. military academies.
• You're a member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises.
• You're 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.
• You're a volunteer in an Individual Ready Reserve (IRR) mobilization category.

If you're in nonpay 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're scheduled for 12 periods of inactive training for the year.
• You're drilling for points rather than pay. (Note that you must pay your premiums directly in this case.)

SGLI offers benefits such as coverage up to $500,000 in $50,000 increments, 120 days of free coverage from the date you leave the military, and an extension of free coverage for up to 2 years if you're totally disabled when you leave the military. 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, which includes an additional $1 per month for Traumatic Injury Protection coverage (TSGLI).

You can manage your SGLI coverage through the SGLI Online Enrollment System (SOES). This allows you to choose your level of coverage, decline coverage, or choose your beneficiaries (the people you pick to receive the money from your life insurance policy if you die).

Veterans' Group Life Insurance (VGLI)

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

• They had part-time 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.
• They had SGLI while in the military and are within 1 year and 120 days of being released from active duty of 31 or more days.
• They are within 1 year and 120 days of retiring or being released from the Ready Reserve or National Guard.
• They are within 1 year and 120 days of assignment to the Individual Ready Reserve (IRR) or Inactive National Guard (ING), including members of the US Public Health Service Inactive Reserve Corps (IRC).
• They are within 1 year and 120 days of being put on the Temporary Disability Retirement List (TDRL).

Veterans can apply for VGLI within 1 year and 120 days of leaving the military. If they apply within 240 days, they don't need to provide proof of good health; otherwise, they must submit evidence of good health. Applications can be made online through the Office of Servicemembers' Group Life Insurance (OSGLI) or by mail/fax using the Application for Veterans' Group Life Insurance (SGLV 8714).

VGLI premium rates are based on the veteran's age and the desired amount of insurance coverage. The coverage amount can be increased by $25,000 every 5 years, up to a maximum of $500,000, until the veteran turns 60. VGLI also allows veterans to choose their beneficiaries and change them as needed. Additionally, VGLI coverage can be converted to an individual insurance policy at standard premium rates without providing proof of good health.

Family Servicemembers' Group Life Insurance (FSGLI)

Family Servicemembers Group Life Insurance (FSGLI) is a type of life insurance offered by the US government to family members of service members covered under full-time Servicemembers' Group Life Insurance (SGLI). This includes the spouse and dependent children of the service member.

Eligibility

To be eligible for FSGLI, the service member 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. The spouse of a service member with SGLI coverage may qualify for FSGLI regardless of their own status (i.e. active duty, retired, or civilian). Dependent children of service members covered under SGLI are also eligible for FSGLI.

Coverage

FSGLI provides up to a maximum of $100,000 of coverage for the spouse, not exceeding the service member's SGLI coverage, and $10,000 for each dependent child. Dependent children receive free coverage. The service member will pay a premium for spousal coverage, which increases as the spouse ages. Dependent coverage is provided at no cost until the child is 18 years old, or sometimes longer if the child is a full-time student between 18 and 22 years old, or becomes permanently and totally disabled before turning 18. In some cases, coverage for dependent children can be extended indefinitely.

Applying for FSGLI

If you are the civilian spouse of a service member signed up for full-time SGLI, you will be automatically insured under FSGLI, and the premium will be deducted from the service member's pay. If you are a military spouse married on or after January 2, 2013, you will need to be signed up by your service member through the SGLI Online Enrollment System (SOES). The service member can log in to SOES using their CAC or DS Logon.

Making Changes to Coverage

The service member can make changes to spousal coverage, such as reducing or cancelling it, through SOES. Dependent coverage cannot be turned down, reduced, or cancelled.

Traumatic Injury Protection (TSGLI)

Servicemembers' Group Life Insurance Traumatic Injury Protection (TSGLI) is an insurance program administered by the Department of Veterans Affairs. It provides short-term financial support to help eligible service members recover from severe injuries. TSGLI is not only for combat injuries but covers injuries incurred on or off duty.

TSGLI is an automatic feature of SGLI, meaning that all service members insured by SGLI are automatically covered by TSGLI. To be eligible for payment, you must meet the following requirements:

• You must be insured by SGLI when you experience a traumatic injury.
• You must incur a scheduled loss, and that loss must be a direct result of a traumatic injury.
• You must suffer the traumatic injury before midnight of the day you separate from the uniformed services.
• You must suffer a scheduled loss within 2 years (730 days) of the traumatic injury.
• You must survive for a period of not less than 7 full days from the date of the traumatic injury.

TSGLI benefits can be used to cover expenses connected to recovery and rehabilitation, including limb reconstruction surgeries, inpatient hospital care at critical care facilities, and care to help transition from an inpatient facility to living at home.

The premium for TSGLI is a flat rate of $1 per month for most service members. To file a claim for TSGLI benefits, download and complete form SGLV 8600, the Application for TSGLI Benefits.

Veterans' Mortgage Life Insurance (VMLI)

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

• Have a severe disability that is service-related or has been aggravated by their service.
• Have received an SAH grant to buy, build, or modify a home (e.g., installing ramps or widening doorways) to accommodate their needs and live more independently.
• Hold the title to the home.
• Have a mortgage on the home.
• Be under 70 years old.

VMLI provides up to $200,000 in mortgage life insurance, which is paid directly to the bank or lender holding the mortgage. The coverage amount equals 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 down, and the coverage ends once the mortgage is fully paid off. Additionally, VMLI does not offer loan value, cash value, or dividends.

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. The agent will then assist the veteran in completing the Veterans' Mortgage Life Insurance Statement (VA Form 29-8636). It is important to note that VMLI applications must be submitted before the veteran's 70th birthday. The VMLI premium is calculated based on the current mortgage balance, the remaining mortgage term, and the required VMLI coverage amount.

VMLI offers financial security to eligible veterans and ensures that their families are protected in the event of their death. It is a valuable benefit that helps severely disabled veterans adapt to their needs and maintain their independence.

Frequently asked questions