Understanding Military Group Life Insurance Cash Benefits

Servicemembers' Group Life Insurance (SGLI) is a Department of Veterans Affairs program that provides low-cost group life insurance to all military members. The maximum benefit was raised from $400,000 to $500,000 in March 2023, with a monthly premium of $31 for full coverage. When you leave the military, your SGLI coverage stays in effect for 120 days, after which you can convert it to Veterans' Group Life Insurance (VGLI), which allows you to maintain your coverage as long as you continue paying premiums.

Eligibility for Servicemembers' Group Life Insurance (SGLI)

Servicemembers' Group Life Insurance (SGLI) is a Department of Veterans Affairs program that provides low-cost group life insurance to eligible military members. If you meet the criteria, you will be automatically signed up for SGLI.

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

• You are an active-duty member of the Army, Navy, Air Force, Space Force, Marines, or Coast Guard.
• You are a commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS).
• You are a cadet or midshipman of the U.S. military academies.
• You are a member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises.
• You are a member of the Ready Reserve or National Guard, assigned to a unit, and are scheduled to perform at least 12 periods of inactive training per year.
• You are a volunteer in an Individual Ready Reserve (IRR) mobilization category.

If you are in nonpay status with the Ready Reserve or National Guard, you may still be eligible for full-time SGLI coverage if you meet the following two requirements:

• You are scheduled for 12 periods of inactive training for the year.
• You are drilling for points rather than pay.

Please note that if you are in nonpay status, you must pay your premiums directly.

Benefits of SGLI

If you are eligible for SGLI, you can receive benefits such as:

• Coverage up to the top limit of $500,000—in $50,000 increments.
• 120 days of free coverage from the date you leave the military.
• Extension of free coverage for up to 2 years (if you are totally disabled) when you leave the military.
• Part-time coverage (if you are a Reserve member who doesn’t qualify for full-time coverage).

Managing Your SGLI Coverage

If you qualify for SGLI, you will be automatically signed up through your service branch. You can check with your unit’s personnel office for more information.

You can make changes to your SGLI coverage, such as choosing your level of coverage or refusing coverage completely. You can also choose your beneficiaries (the people you pick to receive the money from your life insurance policy if you die) and change them as needed.

To make changes to your SGLI coverage or beneficiaries, please submit your requests online through the SGLI Online Enrollment System (SOES).

SGLI costs and coverage

Servicemembers' Group Life Insurance (SGLI) is a Department of Veterans Affairs program that provides low-cost group life insurance to all military members. The maximum benefit amount was raised from $400,000 to $500,000 in March 2023, with eligible service members automatically insured for the maximum amount unless they choose otherwise. 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). This means that the monthly premium for $500,000 worth of coverage is $31.

SGLI coverage is offered in $50,000 increments, with the new coverage amounts being $450,000 for $27 a month and $500,000 for $30 a month. TSGLI coverage is included automatically with SGLI coverage, adding $1 to the premium amounts. Service members who had previously declined SGLI coverage will now automatically have TSGLI coverage at a cost of $1 per month.

SGLI offers a range of benefits to eligible service members, including:

• Coverage up to the top limit of $500,000
• 120 days of free coverage from the date of leaving the military
• Extension of free coverage for up to 2 years if totally disabled when leaving the military
• Part-time coverage for reserve members who don't qualify for full-time coverage

Service members can make changes to their SGLI coverage, such as reducing the insurance by $50,000 increments or cancelling it entirely, through the SGLI Online Enrollment System (SOES). They can also choose their beneficiaries and change them as needed.

Converting SGLI to Veterans' Group Life Insurance (VGLI)

Servicemembers' Group Life Insurance (SGLI) is a low-cost term coverage that protects active service members and spouses. Veterans' Group Life Insurance (VGLI), on the other hand, is reserved for military veterans and their spouses, allowing them to maintain their life insurance coverage after leaving the military as long as they continue to pay the premiums.

Converting SGLI to VGLI:

To convert your SGLI coverage to VGLI, you must meet specific requirements and follow certain steps. Here's a detailed guide to help you through the process:

Eligibility:

• You must have had SGLI coverage while serving in the military.
• You should be within one year and 120 days of being released from active duty, retiring, or being released from the Ready Reserve, National Guard, or other specified assignments.
• If you were a part-time member of the National Guard or Reserve and suffered an injury or disability while on duty that disqualified you from standard premium rates, you may also be eligible.

Timing:

• Apply for VGLI conversion within one year and 120 days of leaving the military.
• If you apply within 240 days of leaving the military, you won't need to provide proof of good health.
• After 240 days, you will need to submit evidence of good health along with your application.

Application Process:

• You can apply for VGLI through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website or by mail/fax.
• Fill out the "Application for Veterans' Group Life Insurance" (SGLV 8714).
• If your VGLI policy has expired and you wish to reinstate it, complete the "Application for Reinstatement of VGLI Coverage" (SGLV 180).

Benefits:

• With VGLI, you can obtain term life insurance benefits ranging from $10,000 to $500,000. The amount is based on your previous SGLI coverage.
• You can increase your coverage by $25,000 after the first year of VGLI and then every five years until you turn 60, up to a total of $500,000.
• VGLI premium rates are determined by your age and the desired amount of insurance coverage.

Converting VGLI to an Individual Policy:

• If you decide to convert your VGLI coverage to an individual policy, you can do so at any time.
• Choose a company from the list of participating companies.
• Apply to the local sales office of your chosen company.
• Obtain a VGLI Conversion Notice letter from OSGLI, verifying your coverage, and provide it to the agent taking your application.
• Remember, the conversion policy must be a permanent policy, such as whole life insurance. Term, variable, or universal life insurance policies are not allowed for conversion.

For more detailed information and specific forms, please refer to the Veterans Affairs website and other official sources.

Applying for VGLI

When you leave the military, you can apply for Veterans' Group Life Insurance (VGLI) within 1 year and 120 days from your date of discharge for up to the amount of coverage you had through Servicemembers' Group Life Insurance (SGLI).

To apply for VGLI, you must meet at least one of the following eligibility requirements:

• You had SGLI while you were in the military and you’re within 1 year and 120 days of being released from an active-duty period of 31 or more days.
• You’re within 1 year and 120 days of retiring or being released from the Ready Reserve or National Guard.
• You’re 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’re within 1 year and 120 days of being put on the Temporary Disability Retirement List (TDRL).
• You had part-time SGLI as a member of the National Guard or Reserve, and you suffered an injury or disability while on duty that disqualified you for standard premium insurance rates.

You can apply for VGLI in one of two ways:

• Online: Apply through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website.
• By mail or fax: Fill out the Application for Veterans' Group Life Insurance (SGLV 8714) and send it to the OSGLI address listed on the application.

If you apply for VGLI within 240 days of leaving the military, you won't need to prove you're in good health. However, if you apply after the 240-day period, you'll need to submit evidence of your good health status.

VGLI Benefits

With VGLI, you can get between $10,000 and $500,000 in term life insurance benefits, based on your SGLI coverage amount when you left the military. You can increase your coverage by $25,000 one year after obtaining VGLI and then every five years after that until you reach a total of $500,000 or turn 60 years old.

VGLI premium rates are based on your age and the amount of insurance coverage you want. You can choose your beneficiaries and change them as needed.

VGLI costs and coverage

Veterans’ Group Life Insurance (VGLI) is a term life insurance program offered to military veterans as a continuation of Servicemembers' Group Life Insurance (SGLI). VGLI allows veterans to maintain their life insurance coverage after leaving the military, provided they continue to pay the premiums. The amount of coverage provided ranges from $10,000 to $500,000, based on the SGLI coverage held during active service.

VGLI premium rates are determined by the age of the veteran and the desired amount of insurance coverage. For example, a 40-year-old veteran seeking $500,000 in coverage can expect to pay a monthly premium of approximately $112. As the veteran ages, the premium increases; by age 60, the monthly premium for the same coverage amount rises to $432, and at age 75, it skyrockets to $1,840. It is important to note that VGLI premiums increase every five years, and the lack of health incentives results in uniform premiums for all policyholders.

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

• Possess SGLI coverage while serving in the military and apply within 1 year and 120 days of discharge from active duty lasting 31 or more days.
• Apply within 1 year and 120 days of retiring or being released from the Ready Reserve or National Guard.
• Apply within 1 year and 120 days of assignment to the Individual Ready Reserve (IRR) or the Inactive National Guard (ING).
• Apply within 1 year and 120 days of being placed on the Temporary Disability Retirement List (TDRL).
• Have had part-time SGLI coverage as a member of the National Guard or Reserve and suffered an injury or disability during duty that disqualified them for standard premium insurance rates.

It is important to note that veterans who apply for VGLI within 240 days of leaving the military are exempt from providing proof of good health. After this period, submitting evidence of good health becomes a requirement for enrollment.

While VGLI offers a seamless transition and guaranteed acceptance for eligible veterans, it may not be the most cost-effective option in the long term. Private term life insurance and whole life insurance policies may provide healthier veterans with lower premiums, higher coverage amounts, and additional benefits such as investment growth and cash value accumulation.

Frequently asked questions