Military Life Insurance: Discharge And Your Coverage

Military life insurance is a complex topic, and it's important to understand the various options available to service members and veterans. When it comes to the question of whether military life insurance ends upon discharge, the answer is a bit nuanced. While some types of military life insurance policies may provide coverage for a limited period after separation from service, others may need to be converted or replaced with alternative options.

One common type of military life insurance is the Servicemembers' Group Life Insurance (SGLI) program offered by the Department of Veterans Affairs (VA). SGLI provides low-cost group life insurance to active-duty military personnel, and it is automatically included for eligible service members. This coverage extends for 120 days after discharge, giving individuals time to explore their options for continuing life insurance coverage.

During this 120-day period, individuals can choose to convert their SGLI policy into a Veterans' Group Life Insurance (VGLI) policy, which is also offered by the VA. VGLI provides similar coverage to SGLI but is available to veterans who have left active duty. It's important to note that VGLI can be more expensive than SGLI, especially as individuals get older.

Alternatively, discharged service members can also explore purchasing a commercial term life insurance policy from private insurers. This option may provide more flexibility in terms of coverage amounts and rates, but it's important to carefully evaluate the different plans available.

In summary, while military life insurance coverage may not abruptly end upon discharge, individuals need to be proactive in managing their life insurance needs during and after their military service. Exploring options, comparing rates, and understanding the specific terms and conditions of different policies are crucial steps in ensuring continuous life insurance coverage.

Servicemembers' Group Life Insurance (SGLI)

SGLI coverage is automatic for eligible servicemembers, and the premium is deducted directly from their military pay. The current basic premium rate is 6 cents per $1,000 of insurance coverage, or $30 for the maximum coverage amount. This premium includes an additional $1 per month for Traumatic Injury Protection (TSGLI), which provides additional coverage in the event of certain losses during active duty, such as blindness or amputation.

Upon leaving the military, SGLI coverage remains in effect for 120 days. After discharge, individuals have the option to convert their SGLI to Veterans' Group Life Insurance (VGLI), a similar program offered by the VA. VGLI is available to all service members leaving active duty and provides lifetime renewable term coverage. Acceptance is guaranteed if coverage is elected within 120 days of discharge, and no proof of insurability is required during this period. However, VGLI can be expensive, especially as individuals get older, with premiums increasing every five years.

Alternatively, servicemembers have the option to convert their SGLI to a permanent commercial policy within 120 days of separation from service, although this may be significantly more expensive than term insurance. Another option is the SGLI Disability Extension, which provides free coverage for up to two years after separation for those who are totally disabled at the time of discharge.

Veterans' Group Life Insurance (VGLI)

VGLI provides term life insurance benefits ranging from $10,000 to $500,000, based on the amount of SGLI coverage the service member had when they left the military. The policyholder can increase their coverage by $25,000 every 5 years until they turn 60, with the maximum coverage amount being $500,000.

To apply for VGLI, individuals must do so within 1 year and 120 days of leaving the military. If the application is submitted within 240 days of discharge, proof of good health is not required. However, if the application is made after this 240-day period, evidence of good health must be provided. 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 determined by the policyholder's age and the desired amount of insurance coverage. Policyholders can choose their beneficiaries and make changes as needed. Additionally, VGLI policies can be converted into commercial (civilian) policies at any time, without providing proof of good health, although the conversion policy must be a permanent policy such as whole life insurance.

SGLI Traumatic Injury Protection (TSGLI)

Servicemembers' Group Life Insurance Traumatic Injury Protection (TSGLI) is a rider under Servicemembers' Group Life Insurance (SGLI). It provides short-term financial support to service members who suffer certain serious traumatic injuries while serving in the military. TSGLI is not disability compensation and does not affect entitlement to disability benefits from the Department of Veterans Affairs or Defense Department.

TSGLI coverage is automatic for those with full-time SGLI coverage. It applies to active-duty members, reservists, National Guard members, funeral honours duty, and one-day muster duty. To be eligible for a TSGLI payment, the following requirements must be met:

• The service member must be insured by SGLI when the injury occurs.
• The injury must cause a loss that is covered by the policy.
• The injury must occur while in service.
• The covered loss must occur within two years (730 days) of the injury.
• The service member must survive for a period of at least seven full days from the date of the injury.

TSGLI benefits can range from $25,000 to $100,000. To apply for TSGLI benefits, complete the Application for TSGLI Benefits (SGLV 8600). If you are denied benefits, you can appeal the decision by filling out the TSGLI Appeal Request Form (SGLV 8600A).

The TSGLI premium is included in the SGLI premium and is a flat rate of $1 per month.

SGLI Disability Extension

The Servicemembers' Group Life Insurance (SGLI) is a benefit for active-duty military members, which provides life insurance coverage. This coverage is offered through the Department of Veterans Affairs (VA) and underwritten by Prudential, a large US life insurer.

The SGLI Disability Extension (SGLI-DE) allows service members who are totally disabled at the time of their discharge to retain their SGLI coverage for up to two years at no additional cost. To be eligible, a service member must meet the definition of "totally disabled", which means having a disability that prevents gainful employment, or one of the following conditions, regardless of employment status:

• Permanent loss of use of both hands, feet, or eyes
• Permanent loss of use of one hand and one foot, or one hand or foot and one eye
• Total loss of hearing in both ears
• Organic loss of speech, where the ability to express oneself, even in a whisper, is lost

To apply for the SGLI Disability Extension, fill out the SGLI Disability Extension Application (SGLV 8715) and send it to the OSGLI address listed on the form. If approved, the coverage can be retained for up to two years, after which the option to pay a premium for Veterans' Group Life Insurance (VGLI) is offered.

Family Servicemembers' Group Life Insurance (FSGLI)

For non-military spouses, FSGLI coverage is automatic and provided at no additional cost to the service member. However, for military spouses, enrollment through the SGLI Online Enrollment System (SOES) is required, and the service member will be responsible for paying the premium, which will increase as the spouse ages.

In the unfortunate event of the service member's terminal illness or death, specific forms need to be filed to request advance insurance payments or receive insurance payouts. These include the Claim for Accelerated Benefits (SGLV 8284A) and the Claim for Family Coverage Death Benefits (SGLV 8283A), respectively.

It is worth noting that FSGLI coverage can be converted to an individual insurance policy within 120 days of the service member's separation from the military or their decision to end SGLI coverage. This conversion option is available for spousal FSGLI coverage, allowing the spouse to continue their life insurance protection outside of the FSGLI program.

Frequently asked questions