Life Insurance For Veterans: Affordable Options Available

Life insurance is an important consideration for veterans and their families. While veterans can get a plan through the VA, which offers SGLI to active-duty members and VGLI with up to $500,000 in coverage, there are also other options available from private companies. These include Prudential Veterans' Group Life Insurance, which is our top pick overall due to its strong financial strength, positive ratings, and long history in the industry. With no medical exam requirements, Prudential simplifies the application process, giving veterans one less thing to worry about when transitioning from active duty. Other options include the American Armed Forces Mutual Aid Association (AAFMAA), which offers cheaper alternatives to VGLI, and the United Services Automobile Association (USAA), which caters to disabled veterans.

Servicemembers' Group Life Insurance (SGLI)

SGLI coverage is automatic for most active-duty service members, including those in the Army, Navy, Air Force, Space Force, Marines, and Coast Guard. It also extends to members of the National Oceanic and Atmospheric Administration (NOAA) and the U.S. Public Health Service (USPHS), as well as cadets and midshipmen of the U.S. military academies and the Reserve Officers Training Corps (ROTC). Additionally, members of the Ready Reserve or National Guard who are assigned to a unit and scheduled for at least 12 periods of inactive training per year are eligible for SGLI.

The SGLI program provides a range of benefits, including:

• Coverage of up to $500,000
• 120 days of free coverage after leaving the military
• A free coverage extension of up to 2 years for those who are totally disabled when they leave the military
• Part-time coverage for Reserve members who don't qualify for full-time coverage

The cost of SGLI is affordable, with a monthly premium of 6 cents per $1,000 of insurance coverage. This includes an additional $1 per month for Traumatic Injury Protection coverage (TSGLI). For example, for $500,000 in coverage, the monthly premium is $31.

Service members can manage their SGLI coverage through the SGLI Online Enrollment System (SOES) and choose their level of coverage, beneficiaries, and make any necessary changes.

Veterans' Group Life Insurance (VGLI)

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

• You had SGLI coverage while in the military and are within 1 year and 120 days of being released from active duty.
• 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 Inactive National Guard (ING).
• You are within 1 year and 120 days of being placed on the Temporary Disability Retirement List (TDRL).
• You had part-time SGLI coverage as a member of the National Guard or Reserve and suffered an injury or disability that disqualified you for standard premium insurance rates.

The amount of coverage provided by VGLI depends on the SGLI coverage the veteran had when they left the military, ranging from $10,000 to $500,000. Veterans can increase their coverage by $25,000 per year until they reach the maximum of $500,000, as long as they do so before turning 60 years old.

To apply for VGLI, veterans must submit their application within 1 year and 120 days of leaving the military. If the application is submitted within 240 days, no proof of good health is required. However, if the application is submitted after this period, evidence of good health must be provided.

VGLI premium rates are determined by the veteran's age and the desired amount of insurance coverage. For example, a 35-year-old veteran paying for $150,000 worth of coverage would pay a monthly premium of $19.50, while a 55-year-old veteran with the same coverage would pay $100.50 per month.

VGLI allows veterans to choose and update their beneficiaries as needed. Additionally, VGLI coverage can be converted to an individual insurance policy at standard premium rates without providing proof of good health. However, the conversion policy must be a permanent policy, such as whole life insurance, and cannot be converted into term, variable, or universal life insurance.

Service-Disabled Veterans' Life Insurance (S-DVI)

Service-Disabled Veterans Life Insurance (S-DVI) is a program that provides low-cost coverage to eligible service members. This program is no longer accepting new applications as of December 31, 2022. However, if you already have S-DVI, you can choose to keep it or apply for the new program called Veterans Affairs Life Insurance (VALife).

The premium (the amount you pay for your coverage) depends on the amount of insurance you have, the coverage plan you requested, and whether you pay once each month or once each year. In some cases, the basic S-DVI policy provides a premium waiver for veterans who are totally disabled. If you have supplemental S-DVI, you will need to pay premiums for this supplemental coverage, even if you have a waiver for your basic S-DVI premiums.

If you have S-DVI and want to switch to VALife, you can apply now and keep your S-DVI during the 2-year waiting period for VALife benefits. Your S-DVI will end when your full VALife coverage starts, and you must pay premiums for both policies during the waiting period. If you apply for VALife on or after January 1, 2026, your S-DVI will end when your VALife application is approved, and you will only need to pay VALife premiums during the waiting period. It is important to note that VALife does not offer premium waivers, so if you have a waiver for S-DVI premiums, it will not transfer to VALife.

Veterans Affairs Life Insurance (VALife)

VALife is available to veterans who are 80 years old or younger and have a VA service-connected disability rating. There is no time limit to apply after getting a disability rating. If you are 81 or older, you may still be eligible for VALife if you applied for VA disability compensation before turning 81 and received a rating for that disability after turning 81. In this case, you must apply for VALife within two years of getting the disability rating.

The cost of VALife depends on your age when you apply and the amount of coverage you want. The older you are, the higher your premium rate will be. Coverage is available in increments of $10,000, with a maximum coverage of $40,000. You can pay your premium monthly or yearly, and your premium rate will never increase as long as you keep your VALife policy.

VALife also offers benefits such as cash value, which starts to accumulate two years after your application is approved. It is important to note that VALife does not offer loans or premium waivers.

If you have Service-Disabled Veterans Life Insurance (S-DVI), you can choose to apply for VALife or keep your existing S-DVI policy. However, if you apply for VALife before December 31, 2025, you can keep your S-DVI during the two-year waiting period for VALife benefits. If you apply on or after January 1, 2026, your S-DVI will end when your VALife application is approved, and you will only need to pay VALife premiums during the waiting period.

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 available to veterans who have a severe service-connected disability and have adapted a home to fit their needs. To qualify for VMLI, veterans must meet the following requirements:

• They must have a severe disability that was caused or worsened by their military service.
• They must have received a Specially Adapted Housing (SAH) grant to buy, build, or modify a home (e.g. installing ramps or widening doorways) to live more independently.
• They must hold the title to the home.
• They must have a mortgage on the home.
• They must be under 70 years old.

VMLI provides up to $200,000 in mortgage life insurance, which is paid directly to the bank or lender that holds the mortgage. The amount of coverage equals the outstanding mortgage balance but does not exceed $200,000. It is important to note that VMLI is a decreasing-term insurance, meaning that the coverage amount decreases as the mortgage balance is paid off. If the mortgage is fully paid off, the VMLI coverage will end. Additionally, VMLI does not have any loan or cash value, and it does not pay dividends.

To apply for VMLI, veterans must first apply for an SAH grant. If approved for the SAH grant, the loan guaranty agent will inform the veteran if they qualify for VMLI. The veteran will then need to complete a Veterans' Mortgage Life Insurance Statement (VA Form 29-8636). It is important to note that veterans must apply for VMLI before their 70th birthday. The VMLI premium is calculated based on the current mortgage balance, the remaining number of mortgage payments, and the amount of VMLI coverage needed.

Frequently asked questions