Life Insurance For Veterans: Who Qualifies And What's Covered?

Life insurance is a crucial aspect of financial planning, and for veterans, understanding their options is essential. The US government offers various life insurance programs to cater to the needs of veterans and their families, providing financial security and peace of mind. These programs include Veterans' Group Life Insurance (VGLI) and Servicemembers' Group Life Insurance (SGLI), with the latter being automatic for active-duty service members. Additionally, there is the option of Family Servicemembers' Group Life Insurance (FSGLI) for spouses and dependent children. With these options, veterans can ensure their loved ones are taken care of in the event of their death or a traumatic injury.

Servicemembers' Group Life Insurance (SGLI)

The maximum amount of coverage provided by SGLI is $500,000, although Servicemembers can choose to reduce their coverage or opt out entirely. The cost of SGLI is 6 cents per $1,000 of coverage, or $31 per month for the maximum coverage of $500,000. This makes it a very affordable option compared to many private life insurance policies.

SGLI also includes Traumatic Injury Protection (TSGLI), which provides financial assistance to members who suffer a severe or traumatic injury, whether on or off duty. The coverage ranges from $25,000 to $100,000 depending on the nature of the injury and costs $1 per month.

When a Servicemember leaves the military, their SGLI coverage will remain in effect for 120 days after their discharge (or up to two years if they are totally disabled at separation). After leaving the service, they can convert their SGLI to a Veterans Group Life Insurance (VGLI) policy, although the rates for VGLI are based on age and can become unaffordable as the veteran gets older.

Veterans' Group Life Insurance (VGLI)

To be eligible for VGLI, veterans must apply within 1 year and 120 days of leaving the military and 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 an active-duty period 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 through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website or by mailing/faxing the Application for Veterans' Group Life Insurance (SGLV 8714). If applying within 240 days of leaving the military, proof of good health is not required. After this period, veterans must submit evidence of good health with their application. VGLI premium rates are based on the age of the veteran and the amount of insurance coverage they choose.

VGLI allows veterans to convert their SGLI to a civilian program of lifetime renewable term coverage after separation from service. VGLI policies can also be converted into commercial (civilian) policies at any time, with standard premium rates and without providing proof of good health.

Family Servicemembers' Group Life Insurance (FSGLI)

To qualify 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 service members covered under SGLI and dependent children of service members covered under SGLI may be eligible for FSGLI. A "dependent child" includes any unmarried child who is a natural child of the Servicemember, a legally adopted child, a stepchild who is a member of the Servicemember's household, or a child who is a full-time student between the ages of 18 and 22, or a child who became permanently incapable of self-support before age 18.

If a Servicemember has full-time SGLI coverage and their spouse is not automatically covered, they can apply for coverage for their spouse using the SGLI Online Enrollment System (SOES). To access SOES, the Servicemember can go to Benefits, Life Insurance SOES- SGLI Online Enrollment System. The Servicemember can log in with their CAC or DS Logon as soon as they receive notice that they can start using SOES.

If a Servicemember wants to make changes to their spouse's coverage, they can submit their changes online through SOES. They can also check their coverage and beneficiary information and make any needed updates. If a Servicemember wants to cancel their spouse's coverage, they can do so through SOES. It's important to note that dependent children's coverage cannot be turned down, reduced, or canceled.

In the unfortunate event of a Servicemember's death, their spouse can convert the spousal FSGLI policy to an 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. The spouse becomes solely responsible for all aspects of the policy, including premium payments. They must choose a company from the list of participating companies, apply at their local sales office, and provide a copy of the most recent Leave and Earnings Statement (LES) showing the deduction for spousal SGLI, along with proof of coverage.

Traumatic Injury Protection (TSGLI)

TSGLI benefits were expanded on April 14, 2023, to include coverage for:

• Limb reconstruction surgeries
• Inpatient hospital care at critical care facilities, rehabilitation facilities, and skilled nursing facilities
• Care to help transition from an inpatient facility to living at home (therapeutic pass)

To be eligible for TSGLI, 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 on the day you leave the military.
• You must suffer a scheduled loss within 2 years (730 days) of the traumatic injury.
• You must survive for a period of no less than 7 full days from the date of the traumatic injury.

It's important to note that certain injuries are excluded from TSGLI coverage. These include injuries that are self-inflicted, involve the use of illegal drugs or controlled substances without medical advice, result from medical treatment of an illness or disease, occur while committing or attempting to commit a felony, or are caused by a physical or mental illness or disease (excluding some exceptions).

TSGLI provides financial support of $25,000 to $100,000 to aid in recovery from a traumatic injury. To receive payments, including retroactive TSGLI payments, you must apply using the Application for TSGLI Benefits (SGLV 8600). You can fax, email, or mail this form to the relevant branch of service.

Veterans Affairs Life Insurance (VALife)

Eligibility for VALife

Veterans aged 80 or younger with a VA service-connected disability rating are eligible for VALife, even with a 0% rating. There is no time limit to apply after receiving a disability rating. Veterans aged 81 or older may still be eligible if they meet the following requirements:

• Before turning 81 years old, they applied for VA disability compensation for a service-connected disability.
• After turning 81, they received a rating for the same disability.
• They apply for VALife within 2 years of getting their disability rating.

Benefits of VALife

VALife offers up to $40,000 in whole life insurance coverage, available in $10,000 increments. The cash value of the policy starts to accumulate 2 years after the application is approved. VALife is a guaranteed acceptance whole life insurance program, meaning that if veterans meet the eligibility requirements, their application will be automatically approved without the need to prove good health. Policyholders can keep their coverage for the rest of their lives.

Premium Rates for VALife

The premium rates for VALife depend on the veteran's age when they apply and the amount of coverage they choose. The premium rate will never increase as long as the policy is maintained. If more than 6 months have passed since the policyholder's last birthday, they will be considered 1 year older when determining the premium rate. For example, a 59-year-old and 6-month-old veteran will pay the rate for a 60-year-old.

When Benefits Start

The full life insurance coverage under VALife starts 2 years after the application is submitted. Policyholders must pay the premiums during those 2 years. If the veteran passes away during the 2-year waiting period, their beneficiaries will receive the total amount of premiums paid, plus interest. If the veteran passes away after the 2-year waiting period, the beneficiaries will receive the full coverage amount of the policy.

Frequently asked questions