Jane Dotson
Veterans Affairs (VA) Life Insurance offers financial security for veterans, service members, and their spouses and dependent children. There are several types of VA life insurance, including Servicemembers' Group Life Insurance (SGLI) and Veterans' Group Life Insurance (VGLI), which provide affordable rates for coverage up to $400,000. These plans pay a death benefit but do not build cash value. In addition, there are five types of permanent life insurance through the VA, including Service-Disabled Veterans Insurance (S-DVI), which is exclusively for veterans with service-connected disabilities, and Veterans Affairs Life Insurance (VALife), a new program for veterans with service-connected disabilities. While VA life insurance can be a valuable benefit, there may be reasons why someone would want to cancel their policy.
| Characteristics | Values |
|---|---|
| Cancellation Period | You can cancel your VA life insurance policy within 31 days of enrollment and receive a full refund of the premiums paid. |
| Refund Policy | If you cancel your policy within the 31-day cancellation period, you will receive a full refund of the premiums paid. |
| Coverage Period | The full coverage amount takes effect two years after enrollment, as long as premiums are paid during this period. |
| Grace Period | There is a grace period of 31 days to pay the premium. The policy will lapse if you do not pay within 61 days of the due date. |
| Reinstatement | If the policy lapses, you must reapply within 2 years from the lapse date and pay back all premiums plus interest to reinstate your policy. Veterans aged 81 or older cannot reinstate a lapsed policy. |
| Coverage Amount | The maximum coverage amount is $40,000, with the option to choose lesser coverage in increments of $10,000. |
| Premium Payments | Premium payments can be made through various methods, including automatic deductions from VA compensation, military retirement pay, checking account, debit card, credit card, PayPal, or Amazon Pay. |
| Premium Waiver | VALife does not offer premium waivers. |
| Payment Frequency | Premium payment options include monthly and annual payments. Monthly payments are the only option for certain payment methods. |
| Discounts | There is a 2.5% discount for paying premiums annually. |
| Loan Option | VALife does not offer loans against the policy. |
| Cash Value | The policy starts earning cash value after being in force (all premiums paid) for two years. If you cancel the policy after this period, you can receive the cash value. |
| Beneficiary Update | You can update your beneficiary information by completing VA Form 29-336 and uploading the signed form through the secure document portal. |
What You'll Learn
Cancelling VGLI Auto Pay
VGLI Auto Pay is a payment option for your Veterans' Group Life Insurance (VGLI) premiums. With VGLI Auto Pay, premium payments are automatically deducted from your bank account on the day they are due. You can enrol in VGLI Auto Pay via your VGLI Online Account if your premiums are paid up to date.
Billing and Notifications
You will receive an email notification 2 business days before funds are withdrawn from your bank account. The notification will provide you with the date and amount of the withdrawal. You will not receive VGLI billing statements in the mail while enrolled in VGLI Auto Pay. If you want to receive VGLI billing statements in the mail, you should not enrol in VGLI Auto Pay.
To receive timely notifications, you will need to keep your email address current and update email filters that may prevent you from receiving the notifications. Even if emails are returned undeliverable, or if the email address provided is not a valid address, the Office of Servicemembers' Group Life Insurance (OSGLI) will continue to initiate electronic fund transfers for paying your VGLI premium until you cancel the authorization.
Your payment history will be available for viewing via your VGLI Online Account.
You can opt out of VGLI Auto Pay at any time via your VGLI Online Account. If a payment is due at the time you opt out, you will be responsible for making such a payment to ensure your VGLI coverage continues uninterrupted. You will also be opted out if a withdrawal request is not honoured by your bank. OSGLI will send you a notification and will request payment of the amount due.
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Cashing out a VA life insurance policy
If you have one of these permanent life insurance policies, you can cash it out in three ways. Firstly, you can take out a loan for up to 94% of your policy's reserve value. The Veterans Benefits Administration (VBA) will determine the loan amount by subtracting any unpaid premiums or debts. Loans carry interest rates from 5 to 12 percent. Secondly, you can surrender your policy and receive the cash surrender value, which is the total amount of cash value accrued. After this, you will no longer have life insurance coverage. Finally, there are three endowment options under the supplemental RH programs. The first option involves paying level premiums for 20 years, after which coverage ends. The other two options end when the policyholder reaches 60 or 65 years of age. If you outlive the term, you will receive a check for the policy's face value, minus any loans taken out against it.
To apply for a VA cash-out surrender or loan, complete and mail the Application for Cash Surrender Value or Policy Loan (Form 29-1526) to the Department of Veterans Affairs. You will need your policy number(s), contact information, and banking information if you want to receive payment via direct deposit. It is important to note that you cannot cash out policies issued through Servicemembers' Group Life Insurance (SGLI) or Veterans' Group Life Insurance (VGLI). However, you may be able to convert them into a permanent cash-value life policy.
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Cancelling VA life insurance within the two-year waiting period
Veterans Affairs Life Insurance (VALife) is a guaranteed acceptance product, which means that the face amount of coverage takes effect two years after enrolment, as long as premiums are paid during the two-year period. If you decide to cancel your VALife policy, you can receive a full refund of the premiums paid if you cancel within 31 days of enrolment. However, if you cancel within the two-year waiting period, there will be no return of funds (unless cancelled within 31 days of enrolment), as there is no cash value.
If you cancel your VALife policy more than two years after enrolment, you can receive the cash value of your policy or use it for extended term insurance. The cash value is less than the amount of premiums paid. It's important to note that if you later want to reinstate your policy, you will have to apply for a new VALife policy and wait for a new two-year period before the full amount of coverage takes effect.
In addition to VALife, the VA offers other life insurance options for active service members and veterans, including Servicemembers' Group Life Insurance (SGLI) and Veterans' Group Life Insurance (VGLI), which provide affordable rates for coverage up to $400,000. These plans pay a death benefit but do not build cash value. There are also five types of permanent life insurance through the VA, including Service-Disabled Veterans Insurance (S-DVI), which is exclusively for veterans with service-connected disabilities.
To manage your VA life insurance policy and benefits, you can update your information, check your policy's status, and pay your premium online. You can also sign up for automatic premium payments from your bank account.
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Cancelling VA life insurance after the two-year waiting period
Veterans Affairs Life Insurance (VALife) is a life insurance program offered by the Department of Veterans Affairs (VA) to veterans with service-connected disabilities. The maximum coverage under VALife is $40,000, with the option to choose lesser coverage in increments of $10,000. While VALife offers valuable financial security for veterans and their families, there may be reasons why an individual would want to cancel their policy. This guide will outline the process and considerations for cancelling VALife after the two-year waiting period.
Understanding the two-year waiting period:
The two-year waiting period for VALife is a guaranteed acceptance period during which the full amount of coverage takes effect. This means that if the insured passes away within the first two years of the policy, the beneficiary will receive all premiums paid plus interest. After the two-year waiting period, the full amount of coverage is in effect, and the beneficiary will receive the full insurance amount elected by the policyholder in the event of their death.
Cancelling after the two-year waiting period:
If you decide to cancel your VALife policy after the initial two-year waiting period, you can do so at any time. However, it's important to note that you will not receive a full refund of your premiums. After two years, your policy begins to earn cash value, and you can choose to receive the cash value of your policy when you cancel. The cash value will be less than the total amount of premiums paid. To cancel your VALife policy, you can submit a request through the Online Policy Access portal or contact the VA Insurance Center at 1-800-669-8477.
Impact on other VA life insurance policies:
It's important to note that if you have other VA life insurance policies, such as Service-Disabled Veterans Insurance (S-DVI), your coverage options may be impacted. According to VA regulations, veterans cannot be insured under both VALife and S-DVI beyond the initial two-year enrollment period in VALife. Therefore, if you decide to cancel your VALife policy after the two-year waiting period, you may need to consider the implications for your other VA life insurance coverage.
Considerations before cancelling:
Before cancelling your VALife policy, it's essential to carefully consider your insurance needs and explore alternative options. Life insurance provides financial security for your loved ones in the event of your death. Review your current financial situation, future goals, and the needs of your dependents to determine if cancelling is the right decision for you. Additionally, consider seeking financial advice or consulting with a Veterans Service Organization (VSO) to explore other insurance options that may be available to you.
In conclusion, while it is possible to cancel your VALife policy after the two-year waiting period, it is a decision that requires careful consideration. Understand the implications for your coverage, explore alternative options, and weigh them against your financial needs and goals to make an informed choice. Remember that life insurance is an important tool to protect your family's financial stability, and there may be other solutions better suited to your circumstances.
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Cancelling VA life insurance and getting a refund
VA life insurance offers financial security for veterans, service members, and their spouses and dependent children. There are several types of life insurance offered by the VA, including:
- Servicemembers' Group Life Insurance (SGLI)
- Veterans' Group Life Insurance (VGLI)
- Service-Disabled Veterans Insurance (S-DVI)
- United States Government Life Insurance (USGLI)
- National Service Life Insurance (NSLI)
- Veterans' Special Life Insurance (VSLI)
- Veterans Reopened Insurance (VRI)
If you have a permanent life insurance plan through the VA, you may be able to cash out your policy. The VA offers five types of permanent life insurance plans, and only SGLI and VGLI plans cannot be cashed out. To cash out your life insurance policy, you must have had the policy for more than a year. You can cash out your policy in one of two ways:
- Taking out a loan for up to 94% of your policy's reserve value. The Veterans Benefits Administration (VBA) will determine the cash value of your policy by subtracting any unpaid premiums or debts from the total amount. Interest rates on these loans range from 5 to 12 percent.
- Surrendering your policy and receiving the cash surrender value. After surrendering your policy, you will no longer have life insurance coverage.
To apply for a VA cash-out surrender or loan, complete and mail the Application for Cash Surrender Value or Policy Loan (Form 29-1526) to the Department of Veterans Affairs. You will need your policy number(s), contact information, and banking information if you wish to receive payment via direct deposit. Please note that if you cancel your VALife coverage, you will only receive a refund of your premiums if you submit a written request within 31 days of approval.
In addition to cashing out your VA life insurance policy, you can also cancel your VGLI Auto Pay enrollment at any time through your VGLI Online Account. If payment is due when you opt out, you will be responsible for making the payment to ensure uninterrupted coverage.
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Frequently asked questions
You can cancel your VA life insurance by contacting the Office of Servicemembers' Group Life Insurance (OSGLI). You may also be able to cancel through your VGLI Online Account.
If you cancel your VA life insurance policy within 31 days of enrollment, you will receive a full refund of the premiums paid. If you cancel after this period but within the first two years, there will be no return of funds as there is no cash value.
If you cancel your VA life insurance policy more than two years after enrollment, you can receive the cash value of your policy or use it for extended term insurance. The cash value will be less than the amount of premiums paid.
Yes, you may decrease your coverage at any time through your VGLI Online Account. You will have five years from the date of the decrease to request that your coverage be restored to the previous level. Evidence of good health will be required.
