Veterans Group Life Insurance: Taxable Or Not?

is veterans group life insurance taxable

Veterans' Group Life Insurance (VGLI) is a program that allows service members to convert their Servicemembers' Group Life Insurance (SGLI) coverage to term life insurance that is renewable every five years. VGLI is overseen by the Department of Veterans Affairs and administered by the Office of Servicemembers' Group Life Insurance. Members with full-time SGLI coverage are eligible for VGLI when they leave the service. But is VGLI taxable?

Characteristics	Values
What is Veterans' Group Life Insurance?	A life insurance program that allows service members to convert their SGLI coverage to term life insurance that is renewable every five years.
Who is eligible for VGLI?	1. A service member who was on active duty for more than 30 days and had SGLI. 2. A member of the Ready Reserve who had SGLI and is being separated or released from drilling assignment. 3. A member assigned to the Individual Ready Reserve (IRR) or to the Inactive National Guard (ING) of a branch of service. 4. A member who had part-time SGLI and who, while performing duty (or traveling directly to or from duty), suffered an injury or disability that renders him/her uninsurable at standard premium rates.
How do I apply for VGLI?	Within approximately 45 to 60 days following your separation from service, you should receive a VGLI application from the SGLI office. You have one year and 120 days from your date of separation from service to apply for VGLI.
When are VGLI premiums due?	Once your VGLI application is approved, you will get a certificate of coverage and you will begin receiving bills on a monthly basis (unless you are a retiree and choose to have the premium payments taken directly from your retirement pay).
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.

Eligibility for VGLI

Veterans' Group Life Insurance (VGLI) is a program that allows veterans to convert their Servicemembers' Group Life Insurance (SGLI) to a civilian program of lifetime renewable term coverage after leaving the military. To be eligible for VGLI, you must meet at least one of the following requirements:

You had part-time Servicemembers' Group Life Insurance (SGLI) as a member of the National Guard or Reserve, and you suffered an injury or disability while on duty that disqualified you from standard premium insurance rates. This includes direct travel to and from duty.
You had SGLI while you were in the military and are within 1 year and 120 days of being released from an active-duty period of 31 or more days.
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) 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 are within 1 year and 120 days of being put on the Temporary Disability Retirement List (TDRL).

It is important to note that to be eligible for VGLI, you must apply within 1 year and 120 days of leaving the military. If you sign up within 240 days, you won't need to prove you're in good health. However, if you sign up after this period, you will need to submit evidence of your good health.

VGLI provides term life insurance benefits ranging from $10,000 to $500,000. The amount is based on your SGLI coverage when you left the military. You can also increase your coverage by $25,000 every 5 years, up to $500,000, until you turn 60. VGLI premium rates are determined by your age and the desired amount of insurance coverage.

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Applying for VGLI

Veterans' Group Life Insurance (VGLI) allows veterans to retain their life insurance coverage after leaving the military, provided they continue to pay the premiums. To apply for VGLI, you must meet at least one of the following eligibility requirements:

You had part-time Servicemembers' Group Life Insurance (SGLI) as a member of the National Guard or Reserve and suffered an injury or disability while on duty that disqualified you from standard premium insurance rates.
You had SGLI while serving in the military and are within 1 year and 120 days of being released from an active-duty period of 31 or more days.
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 the Inactive National Guard (ING), including the United States Public Health Service Inactive Reserve Corps (IRC).
You are within 1 year and 120 days of being placed on the Temporary Disability Retirement List (TDRL).

To apply for VGLI, you must do so within 1 year and 120 days of leaving the military. If you apply within 240 days, you are not required to provide proof of good health. However, if you apply after this period, you must submit evidence of being in good health.

There are two ways to apply for VGLI:

Online Application: You can apply through the Office of Servicemembers' Group Life Insurance (OSGLI) using the Prudential website.
Mail or Fax Application: You can download and fill out the Application for Veterans' Group Life Insurance (SGLV 8714) and send it to the following address:

OSGLI

PO Box 41618

Philadelphia, PA 19176-9913

If you need assistance with your application, customer service professionals are available at 800-419-1473, Monday through Friday, between 8:00 a.m. and 5:00 p.m. Eastern Time.

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VGLI coverage amounts

Veterans' Group Life Insurance (VGLI) coverage is issued in multiples of $10,000, with a maximum of $500,000. The amount of coverage a veteran is eligible for depends on the Servicemembers' Group Life Insurance (SGLI) coverage they had while in the military.

It is important to note that VGLI premium rates increase with age and can become expensive for older veterans. The coverage amount can be increased by $25,000 every five years until the veteran reaches 60 years of age.

To be eligible for VGLI, one must have had SGLI coverage during their military service and apply for VGLI within one year and 120 days of separation from service. Additionally, those who apply within 240 days of leaving the service are not required to provide evidence of good health, while those who apply after this period must submit proof of good health.

VGLI is a valuable option for veterans who want to continue their life insurance coverage after leaving the military, especially if they have pre-existing medical conditions or smoke, as VGLI rates are based solely on age and do not factor in health status. However, for healthy applicants seeking long-term coverage, a civilian term life insurance policy may offer better value.

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Monthly premium rates

The monthly premium rates for Veterans' Group Life Insurance (VGLI) are based on the age of the insured person and the amount of insurance coverage they want. As of April 1, 2021, the monthly premium rates for different coverage amounts are as follows:

For coverage amounts between $10,000 and $500,000, the monthly premium rate ranges from $10.90 to $500.00 for those aged 18-30. For individuals aged 31-40, the monthly premium rate ranges from $15.90 to $63.60. Those aged 41-50 will pay between $22.80 and $91.20, while those aged 51-60 will be charged between $33.90 and $135.60. For those aged 61-70, the monthly premium rate ranges from $52.30 to $209.20, while for those aged 71-80, it ranges from $81.80 to $327.20. Finally, for individuals aged 81-95, the monthly premium rate ranges from $133.80 to $1,768.00.

It is important to note that these rates are subject to change and were last updated on April 1, 2021. Additionally, if more than six months have passed since the insured person's last birthday, they are considered one year older when determining the premium rate.

VGLI allows veterans to convert their Servicemembers' Group Life Insurance (SGLI) to a civilian program of lifetime renewable term coverage after they separate from service. VGLI coverage is issued in multiples of $10,000 up to a maximum of $500,000, and the amount cannot exceed the SGLI coverage they had while in the military.

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Updating VGLI policies

Veterans' Group Life Insurance (VGLI) is a valuable benefit that allows veterans to maintain their life insurance coverage after leaving the military, providing financial security for their loved ones. Here are some important instructions and guidelines for updating VGLI policies:

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

You had part-time Servicemembers' Group Life Insurance (SGLI) as a member of the National Guard or Reserve and suffered an injury or disability while on duty that disqualified you from standard premium insurance rates.
You had SGLI while you were in the military and are within 1 year and 120 days of being released from active duty of 31 or more days.
You are within 1 year and 120 days of retiring or being released from the Ready Reserve or National Guard.
You are within the specified time frame for assignment to the Individual Ready Reserve (IRR) or Inactive National Guard (ING), including the US Public Health Service Inactive Reserve Corps (IRC).
You are within 1 year and 120 days of being placed on the Temporary Disability Retirement List (TDRL).

Applying for VGLI: It is crucial to apply for VGLI within 1 year and 120 days of leaving the military. Applying within 240 days exempts you from providing health evidence, whereas applying after this period requires submitting proof of good health. You can apply through the Office of Servicemembers' Group Life Insurance (OSGLI) online or by mail/fax using the Application for Veterans' Group Life Insurance (SGLV 8714).
Reinstating Lapsed VGLI Policies: If your VGLI policy has expired, you can reinstate it by completing the Application for Reinstatement of VGLI Coverage (SGLV 180).
Benefit Amounts and Increases: With VGLI, you can receive term life insurance benefits ranging from $10,000 to $500,000. The benefit amount is based on your SGLI coverage when you left the military. You can increase your coverage by $25,000 every 5 years until you reach the maximum of $500,000, as long as you haven't turned 60.
Choosing and Updating Beneficiaries: VGLI allows you to choose your beneficiaries and modify them as needed. You can access your policy online or fill out and submit the VGLI Beneficiary Designation form (SGLV 8721) by fax or mail to OSGLI.
Converting VGLI to an Individual Policy: If desired, you can convert your VGLI coverage to an individual insurance policy by selecting a participating company and applying at their local sales office. Remember, the conversion policy must be a permanent policy, such as whole life insurance, and not term, variable, or universal life insurance.
Premium Rates: VGLI premium rates are determined by your age and desired coverage amount. Refer to the VGLI premium rates table to find the monthly premium rate applicable to your age and coverage amount.
Regular Review of Beneficiary Information: It is recommended to review your beneficiary information annually, even if the beneficiary remains the same, as their contact details may have changed. Life events such as marriage, divorce, or the birth of a child should also trigger a review of your beneficiary designations.
Online Access and Resources: You can access your VGLI policy online through the Prudential Life Insurance Company of America. Additionally, the Office of Servicemembers' Group Life Insurance (OSGLI) can be contacted at (800) 419-1473 for further information and assistance with VGLI policies.

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Frequently asked questions

What is Veterans' Group Life Insurance (VGLI)?

VGLI is a life insurance program that allows service members to convert their SGLI coverage to term life insurance that is renewable every five years.

Who is eligible for VGLI?

VGLI is available for:

- Service members who were on active duty for more than 30 days and had SGLI.

- Members of the Ready Reserve who had SGLI and are being separated or released from drilling assignment.

- Members assigned to the Individual Ready Reserve (IRR) or to the Inactive National Guard (ING) of a branch of service.

- Members who had part-time SGLI and who, while performing duty (or traveling directly to or from duty), suffered an injury or disability that renders them uninsurable at standard premium rates.

How do I apply for VGLI?

You will receive a VGLI application from the SGLI office within approximately 45 to 60 days following your separation from service. You have one year and 120 days from your date of separation from service to apply for VGLI. After this, you are no longer eligible.

When are VGLI premiums due?

Once your VGLI application is approved, you will get a certificate of coverage and will begin receiving bills on a monthly basis (unless you are a retiree and choose to have the premium payments taken directly from your retirement pay).

What are 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 cannot be more than the SGLI they had when they left the service.