Va Life Insurance: Worth The Cost?

Veterans Affairs Life Insurance (VALife) is a whole life insurance program that offers cash value and competitive premium rates to service-connected veterans aged 80 and under. The maximum coverage under VALife is $40,000, with no medical exams or health questions required for enrollment. While VALife provides peace of mind and financial security for veterans and their families, some may question the value of whole life insurance policies in general, suggesting that term life insurance or other investment strategies may offer better returns. This article will explore the features, benefits, and potential drawbacks of VALife to help veterans make an informed decision about their life insurance needs.

Pros and cons of VA life insurance

VA life insurance is a guaranteed acceptance whole life insurance program for service-connected veterans aged 80 and under. It provides low-cost coverage to veterans with service-connected disabilities. Here are some pros and cons of VA life insurance:

Pros:

• Guaranteed acceptance for eligible veterans, with no need to prove good health.
• Coverage of up to $40,000 in whole life insurance, with the option to choose lesser amounts in $10,000 increments.
• The policy can be kept for the rest of the veteran's life.
• Premium rates will never increase as long as the policy is maintained.
• Offers financial security for veterans, service members, and their spouses and dependent children.
• Provides peace of mind and ensures beneficiaries receive financial support in the event of the veteran's death.

Cons:

• The coverage amount is limited compared to other insurance options.
• Premiums are paid for the length of the policy, which may be a significant expense over time.
• Does not offer loans or premium waivers.
• The coverage may not be sufficient for veterans with higher income or extensive financial obligations.
• The waiting period of two years before full coverage takes effect may be a concern for some veterans.
• Other insurance options may provide better returns or more flexibility.

Eligibility criteria

Eligibility for VALife depends on the applicant's age and disability rating.

Veterans aged 80 or younger with any level of service-connected disability (0-100%) are eligible to apply at any time. There is no time limit to apply after getting your disability rating.

Veterans aged 81 or older may also be eligible for VALife if they meet the following requirements:

• Before turning 81 years old, they applied for VA disability compensation for a service-connected disability.
• After turning 81, they received a rating for the same disability.
• They apply for VALife within 2 years of getting notification of their disability rating.

VALife is not available to spouses or dependents of eligible veterans.

Cost of premiums

The cost of premiums for Veterans Affairs Life Insurance (VALife) depends on the age of the applicant and the amount of coverage desired. VALife offers up to $40,000 in coverage, available in $10,000 increments. The monthly premium rates vary with age, with older applicants paying higher premiums. For example, an 18-year-old applicant would pay $10.90 per month for $10,000 of coverage, while a 70-year-old applicant would pay $50.00 for the same amount of coverage. The rates are locked in at the time of enrollment and do not increase with age.

There is a discount of 2.5% for paying premiums annually instead of monthly. Additionally, applicants have the option to pay premiums through deductions from their VA compensation, military retirement pay, or checking account. If paying directly through e-billing, applicants can choose to pay monthly or annually.

It is important to note that VALife is a whole life insurance policy, which means that it has a cash value that starts to accumulate two years after the policy is approved. This cash value can be accessed by the policyholder during their lifetime. In the event of the policyholder's death 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 coverage amount will be paid out to the beneficiary.

Compared to similar private sector programs, VALife's maximum coverage of $40,000 is higher, and the cost per $1,000 is competitive or lower. The program offers guaranteed acceptance without the need for medical exams or health questions, making it a viable option for veterans who may have difficulty obtaining life insurance through other means.

How to apply

Veterans Affairs Life Insurance (VALife) is a whole life insurance program that offers cash value and competitive premium rates. It is available to veterans with service-connected disabilities who are aged 80 or younger. Veterans aged 81 and above may also be eligible under certain conditions.

To apply for VALife, you can follow these steps:

Check your eligibility:

• Confirm that you meet the age requirement of being 80 or younger.
• Ensure you have a VA service-connected disability rating, even if your rating is 0%.

Gather required information:

• Have your VA disability rating information ready, as this will be needed for the application.
• Decide on the amount of coverage you want, as premiums will depend on your age and the coverage amount selected.

Complete the online application:

• Visit the VALife website at https://www.benefits.va.gov/insurance/valife.asp.
• Fill out the online application form, providing the required information, including your disability rating and chosen coverage amount.

Submit your application:

• After completing the application, submit it through the website.
• You will receive an instant automated decision about your eligibility for the program.

Enroll and manage your policy:

If accepted, you can enroll in the program and manage most aspects of your VALife policy online.

Make your first premium payment:

• When you apply, you will need to submit your first premium payment.
• You can choose to pay monthly or annually, with a 2.5% discount offered for annual payments.

Update your beneficiary information:

Ensure your beneficiary information is up to date, as this will make it easier for your beneficiaries to file a claim if needed.

Access your policy:

• Once your application is approved, you will receive an confirmation email or text.
• You can then access and download a copy of your policy pages by logging into your online account within 4-5 days.

It is important to note that there is a two-year waiting period for VALife coverage to take full effect. During this period, you must continue to pay the premiums. If the veteran passes away within this waiting period, the designated beneficiary will receive all premiums paid plus interest. After the two-year period, the full face value of the policy will be paid to the beneficiary.

Comparison to other insurance programs

Veterans Affairs Life Insurance (VALife) is a whole life insurance program that offers cash value and competitive premium rates. It is available to veterans with service-connected disabilities who are aged 80 or younger. The maximum coverage under VALife is $40,000, with no medical exams or health questions required for enrollment. The policy has a cash value that builds over time after the first two years of enrollment. During the two-year waiting period, veterans must pay premiums, and if they pass away during this time, their designated beneficiary will receive all premiums paid plus interest. After the two-year period, the full face value of the policy will be paid out.

VALife can be compared to other VA insurance programs such as Service-Disabled Veterans Life Insurance (S-DVI) and Veterans' Group Life Insurance (VGLI). S-DVI offers $10,000 in basic coverage, while VALife provides up to $40,000 in coverage. Additionally, VALife premiums are locked in at the rate paid upon enrollment and do not increase over time. In contrast, S-DVI premiums may increase with time, as it is a term insurance policy. VALife does not offer premium waivers, while S-DVI does provide this option. However, it is important to note that by law, veterans cannot be insured under both S-DVI and VALife beyond the initial two-year enrollment period in VALife.

VGLI, on the other hand, is available to veterans who separate from service and want to convert their Servicemembers' Group Life Insurance (SGLI) to a renewable term policy. Unlike VALife, VGLI does not have a maximum age limit for enrollment. VGLI is closer to term life insurance, as it does not have a cash value plan, and rates continuously rise as the veteran ages. However, VGLI offers higher coverage amounts than VALife, with maximum coverage of $400,000.

In summary, when comparing VALife to other insurance programs, it offers a higher maximum coverage amount than S-DVI and is more accessible to veterans with service-connected disabilities. However, VGLI provides higher coverage amounts and does not have an age limit for enrollment, making it a more flexible option for some veterans. Ultimately, the choice between these insurance programs depends on individual needs and circumstances.

Frequently asked questions