Vgli Vs Civilian Life Insurance: What's The Difference?

Veterans' Group Life Insurance (VGLI) is a type of life insurance offered to former members of the military. It allows them to continue their Servicemembers' Group Life Insurance (SGLI) coverage after leaving the service. VGLI is a term life insurance policy, which means it only provides death benefits without any cash value accumulation. The main advantage of VGLI is that it guarantees coverage for veterans, regardless of their health conditions, if they apply within 240 days of leaving the service. However, the premiums for VGLI increase significantly as the veteran ages, which may make it less cost-effective compared to civilian life insurance policies in the long run. Civilian life insurance policies may offer permanent coverage, cash value accumulation, and lower premiums for healthy individuals. Therefore, when comparing VGLI to civilian life insurance, it is essential to consider factors such as health status, desired coverage amount, and long-term cost-effectiveness.

VGLI eligibility and application process

Veterans' Group Life Insurance (VGLI) is a program that allows you to continue your life insurance coverage after you separate from military service. VGLI was established in 1974 as part of the Veterans' Insurance Act of 1974 and has been administered by The Prudential Insurance Company of America for the Department of Veterans Affairs since the program's inception.

Eligibility

You are eligible to apply for VGLI if you meet at least one of the following requirements:

• You had Servicemembers' Group Life Insurance (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).
• 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.

Application Process

To apply for VGLI, you must do so within 1 year and 120 days of leaving the military. If you apply within 240 days of leaving the military, you are not required to provide proof of good health. After the 240-day period, you will need to submit evidence of being in good health.

You can apply for VGLI in one of the following ways:

• Apply online through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website.
• Apply by mail or fax by filling out the Application for Veterans' Group Life Insurance (SGLV 8714).

If your VGLI policy has expired, you can reinstate it by filling out an Application for Reinstatement of VGLI Coverage (SGLV 180).

Benefits of VGLI

VGLI offers several benefits, including:

• Renewable Coverage: You can retain your VGLI coverage regardless of changes to your health or job status as long as premiums are paid.
• No Medical Questions: If you apply within 240 days of your date of separation, no medical questions are asked.
• No Exclusions: VGLI does not exclude veterans for reasons related to mental health, PTSD, or TBI, and it does not exclude applicants based on their occupation or recreational activities.
• Standard Premium Rates: VGLI premium rates are based only on age and coverage amount. Rates are the same regardless of gender or smoker status.
• Five-year Coverage Increase Option: You can increase your VGLI coverage by $25,000 every five years up to $500,000 until the age of 60.

VGLI premiums and costs

Veterans' Group Life Insurance (VGLI) is a type of term life insurance that allows veterans to continue their Servicemembers' Group Life Insurance (SGLI) coverage after leaving the military. VGLI is a renewable term policy that offers death benefits ranging from $10,000 to $500,000, based on the amount of SGLI coverage the veteran had upon leaving the military.

VGLI premium rates are based on age and the amount of coverage, with rates increasing as the insured person gets older. For example, a $100,000 policy might cost $12 a month at age 35 but increase to $60 a month at age 55. The premiums do not factor in gender, tobacco use, job, or recreational activities, which can influence rates with private insurance policies.

VGLI premiums are discounted by 5% if paid annually, with smaller discounts for quarterly and semi-annual payments. Premiums can be paid monthly, quarterly, semi-annually, or annually, and can be automatically deducted from military retirement pay, VA compensation payment, or a bank account. There are no enrollment or membership fees.

While VGLI offers guaranteed acceptance and no medical exam if enrolled in within 240 days of leaving the military, the premiums can become expensive for older veterans, especially compared to standard term life rates. For example, a healthy 30-year-old might pay $3,036 annually for a $500,000 whole life policy, totalling $151,800 by age 80. With VGLI, the same person would pay $315,300 by age 80.

VGLI may be a good choice for those who cannot medically qualify for regular life insurance, but healthy individuals may find better value with a civilian term life insurance policy, especially if they want coverage for a specific period.

VGLI coverage and benefits

Veterans' Group Life Insurance (VGLI) is a type of group term life insurance offered to former members of the military. It is a continuation of the Servicemembers' Group Life Insurance (SGLI) coverage offered to active military personnel, and allows them to keep their term insurance for life as long as they continue to pay the premiums.

Eligibility

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

• 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) or 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).
• 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.

Benefits

VGLI offers several benefits to eligible veterans:

• No health exam required: If you apply for VGLI within 240 days of leaving the military, you don't need to provide proof of good health. After this period, you'll need to submit evidence that you're in good health.
• Guaranteed acceptance: As long as you're an eligible veteran and apply within 1 year and 120 days of separation, you can't be turned down for VGLI.
• Low premiums: VGLI premium rates are based on age and the amount of coverage, and are generally affordable for younger veterans.
• No membership fees: There are no enrollment or membership fees for VGLI.
• Flexible coverage: You can get between $10,000 and $500,000 in term life insurance benefits, based on your SGLI coverage when you left the military. You can increase your coverage beyond this limit by $25,000 every 5 years until you turn 60.
• No coverage limit based on age: VGLI coverage does not end or decrease based on age, as long as premium payments are made on time.
• Accelerated death benefit: VGLI policies include an accelerated death benefit feature, which allows you to access part of your policy's payout if you become terminally ill.
• Online policy management: VGLI has a full-service website where you can manage your coverage.

Considerations

While VGLI offers many benefits, there are also some considerations to keep in mind:

• Increasing premiums: VGLI rates increase significantly as you age, and can become expensive for older veterans compared to standard term life rates.
• No permanent policy options: VGLI only offers term life insurance, which means it has a death benefit but doesn't build any cash value.
• Low coverage amounts: VGLI has a relatively low death benefit cap of $500,000, so you may need additional coverage if you want a higher payout.

VGLI vs. civilian term life insurance

Veterans' Group Life Insurance (VGLI) is a type of term life insurance that allows former military members to continue their Servicemembers' Group Life Insurance (SGLI) coverage after leaving the service. Here's a detailed comparison of VGLI with civilian term life insurance:

Eligibility:

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

• Have SGLI coverage while in the military and apply within 1 year and 120 days of being released from active duty.
• 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 placed on the Temporary Disability Retirement List (TDRL).
• Have part-time SGLI coverage as a member of the National Guard or Reserve and suffered an injury or disability while on duty.

Civilian Term Life Insurance: Eligibility requirements vary among insurance providers but generally include age limits and health assessments.

Application Process:

VGLI: Veterans can apply for VGLI through the Office of Servicemembers' Group Life Insurance (OSGLI) online, by mail, or by fax. If applying within 240 days of leaving the military, no health questions or exams are required.

Civilian Term Life Insurance: The application process typically involves a health questionnaire, medical exam, and underwriting to determine eligibility and premium rates.

Coverage Amount:

VGLI: Offers term life insurance benefits ranging from $10,000 to $500,000, based on the SGLI coverage the veteran had upon leaving the military. Coverage can be increased by $25,000 every five years until the age of 60.

Civilian Term Life Insurance: Provides a wider range of coverage options, often including higher benefit amounts than VGLI.

Premiums:

VGLI: Premium rates are based on age and coverage amount, increasing as the insured person ages. VGLI offers discounted rates for annual payments.

Civilian Term Life Insurance: Premium rates vary by provider and are influenced by factors such as age, gender, health, and smoking status. Rates may be level for a specified term or increase periodically.

Exclusions:

VGLI: Does not exclude applicants for reasons related to mental health, PTSD, or TBI. VGLI also does not consider tobacco use when determining premium rates.

Civilian Term Life Insurance: May exclude applicants or charge higher rates based on health conditions, tobacco use, hazardous hobbies, or certain occupations.

Flexibility:

VGLI: Offers the ability to convert VGLI coverage to a commercial whole life insurance policy at any time without providing evidence of good health.

Civilian Term Life Insurance: Provides flexibility in choosing the type of policy (term, whole life, universal life, etc.) and the option to add supplementary benefits.

Cost-Effectiveness:

VGLI: May be more expensive for older veterans due to increasing premium rates with age.

Civilian Term Life Insurance: Can offer more competitive rates, especially for healthy individuals who lock in level premiums for a specified term.

In summary, VGLI is a valuable option for veterans who may have health conditions or who want a seamless transition from their SGLI coverage. However, civilian term life insurance may provide more flexibility in coverage options, premium rates, and policy features. It is important for individuals to compare their options and consider their specific needs when deciding between VGLI and civilian term life insurance.

VGLI vs. whole life insurance

Veterans' Group Life Insurance (VGLI) is a type of term life insurance that is often confused with whole life insurance. While both have their advantages, there are some key differences to consider when deciding between the two.

Features of VGLI

VGLI is a renewable term policy that offers death benefits to beneficiaries upon the death of the veteran. It is available to former members of the military who wish to continue the group life coverage they had while in active service. VGLI offers $10,000 to $500,000 in life insurance benefits, based on the amount of coverage the veteran had upon leaving the military.

VGLI has relatively low premium rates, which do not consider gender, tobacco use, job, or recreational activities. The policy does not terminate at a certain age and remains in force as long as premiums are paid. There are no membership or enrollment fees, and the death benefit does not decrease unless requested. VGLI also has an accelerated death benefit feature, allowing the veteran to access part of the policy's payout if they become terminally ill.

However, VGLI rates increase significantly as the veteran ages, and the coverage amount is relatively low compared to other policies. VGLI also does not build any cash value over time.

Features of Whole Life Insurance

Whole life insurance provides death benefits as well as a cash value accumulation that builds during the life of the policy. Whole life insurance premiums are generally higher at younger ages but remain level for the life of the policy.

While a health exam may be required, whole life insurance can sometimes be purchased without a medical exam, albeit at a higher cost. The cash value is based on how long the policy has been in force, and a portion of the cash value can usually be withdrawn or borrowed against.

If you are a veteran separating from service, VGLI may be a good option if you have health conditions or disabilities that may affect your ability to obtain an individual policy. VGLI does not require a health questionnaire if applied for within 240 days of separation and ensures a death benefit payable to a beneficiary.

On the other hand, if you want your premiums to remain the same and are interested in a policy with cash or loan value, a whole life insurance policy may be more suitable. It is important to evaluate your specific needs and consider the features and costs of both options before making a decision.

Frequently asked questions