Understanding Military Life Insurance Calculations And Benefits

Military life insurance is a crucial aspect of financial planning for service members and veterans, offering peace of mind and financial security for their families. The US government provides various life insurance options specifically designed for military personnel, including Servicemembers' Group Life Insurance (SGLI) and Veterans' Group Life Insurance (VGLI). SGLI offers automatic enrolment and low-cost term coverage of up to $500,000 for active-duty service members, while VGLI allows individuals to maintain their life insurance coverage after leaving the military by paying premiums. Additionally, supplemental life insurance policies are available to meet the unique needs of military families, ensuring comprehensive protection during both active service and the transition to civilian life. This article will delve into the details of military life insurance, exploring eligibility, benefits, and the steps to calculate the coverage required.

Servicemembers' Group Life Insurance (SGLI)

Servicemembers Group Life Insurance (SGLI) is a low-cost term life insurance program for members of the uniformed services. SGLI provides up to $400,000 of coverage for active-duty military members, with the option to purchase additional insurance depending on their personal situation.

SGLI coverage is available in $50,000 increments up to the maximum of $400,000. The current basic SGLI premium rate is 6 cents per $1,000 of insurance coverage. The premium includes an additional $1 per month for Traumatic Injury Protection coverage (TSGLI). For the member who carries the maximum coverage of $400,000, the monthly SGLI premium is $28. In addition, there will be an extra premium charge of $1 for TSGLI coverage, which is automatic, making the maximum premium $29 per month for $400,000 of coverage.

SGLI coverage is automatic for active-duty personnel, beginning on the first day of service or enlistment. Eligible individuals include:

• Members of the Navy, Marines, Army, Air Force, Space Force, or Coast Guard serving on active duty
• Commissioned members of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS)
• Cadets or midshipmen of any of the U.S. military academies
• Members, cadets, or midshipmen of the Reserve Officers Training Corps engaged in authorized training and practice cruises
• Members of the Ready Reserve or National Guard, assigned to a unit, and scheduled to perform at least 12 periods of inactive training per year
• Volunteers in an Individual Ready Reserve mobilization category

SGLI coverage can also be extended to those in non-pay status with the Ready Reserve or National Guard who meet certain requirements.

If you qualify for SGLI, you are automatically enrolled through your service branch on the first day of your service and do not need to apply for coverage. You can, however, choose to decline or reduce your coverage by completing Form SGLV-8286, the Servicemembers' Group Life Insurance Election and Certificate. If you have previously declined or reduced your coverage and wish to increase it, you can apply online at the SGLI Online Enrollment System (SOES) or by completing Form SGLV 8286.

You can also make changes to your beneficiaries (the people you pick to receive the money from your life insurance policy if you die) online through the SOES system.

Veterans' Group Life Insurance (VGLI)

Veterans Group Life Insurance (VGLI) is a life insurance program that allows service members to convert their Servicemembers' Group Life Insurance (SGLI) coverage to term life insurance that is renewable every five years. Members with full-time SGLI coverage are eligible for VGLI when they leave the service.

Eligibility for VGLI

To be eligible for VGLI, you must meet at least one of the following 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) 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.

VGLI Coverage Amounts

VGLI coverage is issued in multiples of $10,000 up to a maximum of $500,000. However, a service member's VGLI coverage amount can't be more than the SGLI they had when they left the service.

Applying for VGLI

You can apply for VGLI within 1 year and 120 days of leaving the military. If you apply within 240 days of leaving the military, you won't need to prove you're in good health. If you apply after 240 days, you'll need to submit evidence of good health.

You can apply for VGLI through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website, or by mail or fax.

Traumatic Servicemembers' Group Life Insurance (TSGLI)

Traumatic Servicemembers Group Life Insurance (TSGLI) provides automatic traumatic injury coverage to all Servicemembers covered under the SGLI program. It provides short-term financial assistance to severely injured Servicemembers and Veterans to assist them in their recovery from traumatic injuries. TSGLI is not only for combat injuries but provides insurance coverage for injuries incurred on or off duty.

TSGLI benefits include:

• $25,000 to $100,000 in short-term financial support to help in your recovery from a traumatic injury.
• Limb reconstruction surgeries.
• Inpatient hospital care at critical care facilities, rehabilitation facilities, and skilled nursing facilities.
• Care to help you transition from an inpatient facility to living at home (called a therapeutic pass).

To be eligible for payment of 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 have suffered the traumatic injury before midnight on the day that you left the military.
• You must suffer a scheduled loss within 2 years (730 days) of the traumatic injury.
• You must survive for a period of at least 7 full days from the date of the traumatic injury. The 7-day period begins on the date and time of the traumatic injury and ends 168 hours later.

The premium for TSGLI is a flat rate of $1 per month for most Servicemembers. This is included in the SGLI premium, which is automatically deducted from the member's base pay.

To file a claim for TSGLI benefits, download and complete form SGLV 8600 Application for TSGLI Benefits.

Service-Disabled Veterans' Insurance (S-DVI)

Service-Disabled Veterans Life Insurance (S-DVI) is a program that provides low-cost coverage to eligible service members. The Department of Veterans Affairs stopped accepting new applications for S-DVI in December 2022, but beneficiaries who already had the plan were allowed to keep it.

Eligibility for S-DVI

To be eligible for S-DVI, veterans must meet the following criteria:

• Released from active duty under conditions other than dishonorable.
• Rated for a service-connected disability (even if rated at 0%).
• In good health, except for any service-connected conditions.
• Apply within two years from the date the VA grants a service-connected disability.

S-DVI Premium Rates

The premium rates for S-DVI plans are based on the amount of insurance coverage, the coverage plan requested, and whether premiums are paid monthly or annually. Veterans who are totally disabled may be eligible for a premium waiver.

Supplemental S-DVI

Veterans who are eligible for the premium waiver can apply for an additional policy of up to $30,000 if they pay the premiums. To be eligible, veterans must be under 65 years of age and apply for supplemental S-DVI within one year of the approved premium waiver.

Switching from S-DVI to VALife

The VA introduced a new program called Veterans Affairs Life Insurance (VALife) in 2023 for veterans with service-connected disabilities. If you have S-DVI, you can either apply for VALife or choose to keep your existing S-DVI coverage. If you apply for VALife before December 31, 2025, you can retain your S-DVI coverage during the two-year waiting period for VALife benefits. However, you will need to pay premiums for both policies during this period.

Veterans' Mortgage Life Insurance (VMLI)

Veterans Mortgage Life Insurance (VMLI)

Veterans Mortgage Life Insurance (VMLI) is a type of mortgage protection insurance offered by the United States government. It is designed to provide financial security for the families of veterans with severe service-connected disabilities who have adapted their homes to accommodate their needs.

Eligibility Criteria for VMLI:

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

• Have a severe disability that the Department of Veterans Affairs recognises as being caused or aggravated by their military service.
• Have received a Specially Adapted Housing (SAH) grant, which is used to purchase, construct, or modify a home to enhance independent living. This could include installing ramps or widening doorways.
• Hold the title to the home.
• Have a mortgage on the home.
• Be under 70 years of age.

Benefits of VMLI:

VMLI provides up to $200,000 in mortgage life insurance, which is paid directly to the bank or lender that holds the mortgage. The coverage amount is determined by the outstanding balance on the mortgage and will not exceed $200,000. It is important to note that VMLI is a decreasing-term insurance, meaning that the coverage decreases as the mortgage balance is paid off.

Applying for VMLI:

To apply for VMLI, individuals must first apply for an SAH grant. If approved, the loan guaranty agent will inform them of their eligibility for VMLI. The agent will then assist in completing the necessary paperwork, including the Veterans' Mortgage Life Insurance Statement (VA Form 29-8636). It is important to note that VMLI applications must be submitted before the applicant's 70th birthday.

Cost of VMLI:

The premium for VMLI is based on several factors, including the current balance of the mortgage loan, the remaining number of mortgage payments, and the required amount of VMLI coverage. The VMLI Premium Calculator, available on the official website, can help individuals estimate their potential premium.

Maintaining VMLI Coverage:

To maintain VMLI coverage, individuals must notify the Department of Veterans Affairs of any significant changes to their mortgage or primary residence. This includes transferring the mortgage to another lender, refinancing the home, or moving to a new primary residence.

Frequently asked questions