This guide was written by

Michael Galvin

Military servicemembers know to expect the unexpected. They’ve learned through training and experience to protect themselves and those around them in any situation. Life insurance fits that mission.

Active duty servicemembers, veterans and their families have options when it comes to life insurance, including government-sponsored programs and private-sector policies. Whatever coverage you choose, it’s important to know exactly what your insurance policy covers. Here’s your guide to making good choices.

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Life Insurance for Active Duty Military

The U.S. government automatically provides a life insurance policy for active duty servicemembers, but it’s not the only option for servicemembers seeking coverage. Some military members stick with the standard coverage. Others want a little more coverage than the government-sponsored policy offers and purchase a supplemental private-sector policy. Still others opt out of the government program completely and buy a private-sector policy.

Life Insurance Coverage Through the VA

Here are the life insurance programs automatically provided by the U.S. government’s Veterans Affairs (VA) Department for active duty servicemembers, the National Guard and Ready Reserve and other military and government-related parties.

Active duty servicemembers are automatically signed up for this term life insurance, though they can choose to decline the coverage.

Eligibility

The following groups are eligible for SGLI coverage:

  • Active duty Army, Navy, Marines, Air Force or Coast Guard

  • Active National Guard & Ready Reserve and Inactives with 12 periods of training per year

  • Military academy cadets & midshipmen

  • ROTC in training

  • Individual Ready Reserve (IRR) volunteers

  • National Oceanic and Atmospheric Administration and US Public Health Service commissioned members

Coverage

This term life insurance pays benefits for death and disablement. Coverage is automatically set at the maximum $400,000, but servicemembers can choose to take less coverage, in increments of $50,000.

Application

Coverage is automatic when you enroll in the military, so you won’t have to complete a separate application process. But you will need to contact your military branch personnel office to designate beneficiaries.

Changing Coverage

To reduce or decline your coverage, or to designate your beneficiaries, complete form SGLV 8286 – Servicemembers Group Life Insurance Election & Certification. Once you’ve completed the form, submit it to your military branch Personnel Office.

If servicemembers are enrolled in SGLI, they’re also automatically enrolled in TSGLI, which provides financial assistant in the event of a traumatic injury.

Eligibility

Anyone automatically eligible for SGLI is also eligible for this traumatic injury insurance. They must have SGLI at the time of the injury.

Coverage

VA payment is between $25,000 to $100,000 for a servicemember who has received a traumatic injury on duty or off duty.

Application

TSGLI is automatic for any SGLI-covered servicemember, with no application process necessary.

Changing Coverage

To reduce or decline your coverage, or to designate your beneficiaries, complete form SGLV 8286 – Servicemembers Group Life Insurance Election & Certification. Once you’ve completed the form, submit it to your military branch Personnel Office.

SGLI and TSGLI Premium Rates

Coverage Amount SGLI Monthly Premium TSGLI Monthly Premium Total Monthly Premium
$50,000 $3.50 $1.00 $4.50
$100,000 $7.00 $1.00 $8.00
$150,000 $10.50 $1.00 $11.50
$200,000 $14.00 $1.00 $15.00
$250,000 $17.50 $1.00 $18.50
$300,000 $21.00 $1.00 $22.00
$350,000 $24.50 $1.00 $25.50
$400,000 $28.00 $1.00 $29.00

Source: U.S. Dept of Veterans Affairs, rates effective July 1, 2014

Premiums and coverage for National Guard and Ready Reserve in different categories can vary. You’ll need to contact your military branch personnel office for information about coverage and rates.

Do You Need Additional Coverage or Private Life Insurance?

While you’re automatically enrolled in SGLI, you do have the option to change your coverage. You can add additional coverage on top of your SGLI coverage with a private-sector policy, or you can opt to drop your SGLI coverage completely.

Tip

While considering your options, you should take a look at your family’s expenses. For example, if the combination of your housing, utilities, school and other expenses is $3,500 per month, then a $400,000 maximum value insurance policy would cover those expenses for 9 1/2 years. If you want more coverage than that, you’ll need to look elsewhere: the VA program maxes out at $400,000.

Some private providers offer policies in which you combine your SGLI coverage (including TSGLI) with their coverage. For example, you could set your base SGLI policy to $100,000 and purchase a private sector supplemental policy of $400,000 for a total of $500,000 in life insurance. Private sector policies are priced competitively, so that $500,000 in coverage might cost about the same or even less than $400,000 of coverage from the VA.

You’ll have many potential providers to choose from. You might start with military mutual aid associations like the Army & Air Force Mutual Aid Association or the Navy Mutual Aid Association. You should also check out commercial insurance companies such as USAA, the Military Benefit Association, Mutual of Omaha, The Hartford and US Bank.

Tip

Most commercial insurance policies exclude conditions that are part of military life such as acts of war or terrorism, military deployment and flights on military aircraft. You’ll need to find a private insurance provider that caters to the military and offers life and disability insurance at rates that are competitive with VA-sponsored insurance.

How to Transition Your Coverage After Retiring from Active Duty

When you leave the military, you have 1 year plus 120 days from the date of separation to apply for VGLI coverage. In that first 120 days, you will still be covered under your SGLI policy, but the coverage will be free for this time period. To convert to VGLI coverage without having a health checkup, you’ll need to apply within 240 days of your separation from the military. After that point, you’ll need a health checkup during the remaining application window.

If you’re totally disabled, you can extend your SGLI coverage for up to two years by applying for SGLI-DE, the Disability Extension, which entitles you to two years of life insurance protection, free of charge (see the Life Insurance for Veterans section below for more on SGLI-DE). After two years, a disabled servicemember is automatically eligible for VGLI.

The Ready Reserve also receives 120 days of part-time coverage after separation, but the servicemember must continue to pay premiums.

A servicemember who wants to convert SGLI coverage to a private-sector insurance policy after leaving the military must do the following:

  • Convert within the 120-day period following separation

  • Select a provider from a list of Participating Companies

  • Choose a permanent policy, such as whole life – not term, variable or universal life insurance

  • Provide the insurance agent a copy of separation papers – Form DD-214, NGB-22 or written Reservist orders – and a copy of the last Leave & Earnings Statement (LES)

Life Insurance for Military Families

The U.S. government’s VA Department provides term life insurance for families of servicemembers who are enrolled in SGLI. Dependent children are covered at no additional cost, but coverage for a spouse costs extra.

Eligibility

The following groups are eligible for FSGLI:

  • An active duty, National Guard and Ready Reserve servicemember with full-time SGLI coverage

  • Dependent children

  • Civilian, active duty or retired spouse

  • A civilian spouse is automatically covered. A spouse in uniform must apply if the marriage date is on or after January 2, 2013

Coverage

This term life insurance pays benefits for death and disablement. Dependent children up to age 18, disabled children and full-time students are covered up to $10,000 for each dependent. A spouse is covered for up to $100,000. Servicemembers can choose to take less spousal coverage, in increments of $10,000.

Application

FSGLI is coverage is automatic. Dependent children and a non-military spouse are automatically covered at the maximum coverage amount. Submit form SGLV 8286 to the military branch Personnel Office to designate beneficiaries or to register a military spouse..

Changing Coverage

Submit form SGLV 8286 to the military branch Personnel Office to alter or cancel life insurance coverage, change beneficiaries or register a spouse. A servicemember’s spouse who wants to convert to a private-sector insurance policy submits form SGLV 8286 or spousal declination form 8286A.

FSGLI Rates

Age of Spouse
Coverage
Amount
Under35 35-39 40-44 45-49 50-54 55-59 60 & Up
$10,000 $.50 $.65 $.85 $1.30 $2.50 $3.70 $5.00
$20,000 $1.00 $1.30 $1.70 $2.60 $5.00 $7.40 $10.00
$30,000 $1.50 $1.95 $2.55 $3.90 $7.50 $11.10 $15.00
$40,000 $2.00 $2.60 $3.40 $5.20 $10.00 $14.80 $20.00
$50,000 $2.50 $3.25 $4.25 $6.50 $12.50 $18.50 $25.00
$60,000 $3.00 $3.90 $5.10 $7.80 $15.00 $22.20 $30.00
$70,000 $3.50 $4.55 $5.95 $9.10 $17.50 $25.90 $35.00
$80,000 $4.00 $5.20 $6.80 $10.40 $20.00 $29.60 $40.00
$90,000 $4.50 $5.85 $7.65 $11.70 $22.50 $33.30 $45.00
$100,000 $5.00 $6.50 $8.50 $13.00 $25.00 $37.00 $50.00

Source: U.S. Dept of Veterans Affairs, rates effective July 1, 2014

Premiums for National Guard and Ready Reserve in non-pay status vary from branch to branch – contact your military branch personnel office for coverage and rate information.

How to Transition Spousal Coverage Following Military Service

When a servicemember retires from active duty and converts his or her life insurance coverage to a corresponding veterans policy, or VGLI, all children are automatically covered by the new VGLI policy. However, VGLI coverage doesn’t include spouses.

A spouse can convert his or her FSGLI policy into a private-sector insurance policy by following certain guideline requirements:
  1. Policy must be a permanent whole life policy – not term, variable or universal
  2. Policy must be issued by a provider from a list of approved Participating Companies
  3. Policy does not require a health examination
  4. Policy must be purchased within 120 days from the date of the servicemember’s separation from the military, or divorce, or death
  5. 120 days from the date of voluntary termination of SGLI coverage – form SGLV-8286 or 8286A

You’ll need to provide documentation to the insurance agent, including the following:

  1. Servicemember’s most recent Leave & Earning Statement showing Spousal SGLI deduction
  2. Servicemember’s form DD-214, NGB-22 or written orders of separation
  3. If applicable, a document that certifies a change in status such as divorce or death

Life Insurance for Veterans

The U.S. government offers veterans a variety of life insurance options, including coverage for disabled veterans and home mortgage payments in the event of a veteran’s death. As an alternative to VA-sponsored life insurance, veterans can also choose coverage from a private-sector provider.

Veterans Life Insurance Coverage Through the VA

Here are the types of life insurance coverage provided by the VA.

After leaving the service, servicemembers and other military personnel who had SGLI coverage while on active duty have the option to apply for Veterans Group Life Insurance, which provides the same level of coverage as SGLI.

Application Deadlines

A servicemember has 1 year plus 120 days from date of separation to apply for VGLI. Servicemembers who apply for coverage within 240 days of separation will not need a health report; those who apply after 240 days are required to answer health questions.

To apply, download application form SGLV 8714, fill it out and mail to the Office of Servicemembers Group Life Insurance:
OSGLI, PO Box 41618, Philadelphia PA 19176-9913

You can also apply online by going to the VA Benefits homepage, then clicking on “Apply”, then “Insurance”.

Eligibility

The following groups are eligible for VGLI coverage:

  • Servicemembers who had SGLI coverage and are being released from active duty or active duty for training under a call or order to duty that does not specify a period of less than 31 days

  • National Guard, Ready and Individual Ready Reserve, and Public Health Service Inactive Reserve Corps with full-time SGLI or TSGLI coverage at the time of separation from service

  • Servicemembers who have part-time SGLI and suffer an injury or disability while performing a duty, including travel to or from duty

Coverage

VGLI is term life insurance, paying benefits of up to $400,000 for death and disablement. VGLI coverage is equal to what you had with your SGLI policy, unless you change it. Children are automatically covered up to $10,000 per child. Veterans can opt out of VGLI and choose commercial term or permanent coverage, or none at all.

Your initial VGLI coverage cannot exceed the amount of coverage you had in your SGLI policy at the time of separation from service. Once you have a VGLI policy, you can increase (or decrease) your coverage in increments of $25,000 upon each five-year policy renewal up to the age of 60, with no health status questions. VGLI pays a death benefit even if you are a smoker, suffer from PTSD or commit suicide.

Cost

VGLI premiums are based on a veteran’s age and the amount of coverage desired. A veteran age 29 or younger pays $32 a month for full $400,000 coverage; a vet 65-69 pays $600. You can choose to reduce coverage – the lowest level is $10,000 at a cost of 80 cents a month for those 29 and under, $15 for those in their late 60s.

Vets who pay quarterly, semiannually or annually get a discount up to five percent.

Premiums for National Guard and Ready Reserve in non-pay status vary from branch to branch – contact your military branch Personnel Office for coverage and rate information .

You can choose to pay a monthly bill or have the premium amount deducted from retirement pay.

Changing Coverage

Submit form SGLV 8286 to the Personnel Office to alter or cancel life insurance coverage or to change beneficiaries. Veterans can choose to opt out of VGLI and purchase a private-sector whole life insurance policy (not term, universal or variable life) by obtaining a letter, called a VGLI Conversion Notice, from OSGLI, that verifies current coverage. If choosing to convert to a private policy, you must use a provider from a list of approved Participating Companies. In a conversion, supplementary benefits like Accidental Death & Dismemberment or Waiver of Premium for Disability are not included.

Servicemembers who are unable to work due to a disability at the time of their discharge from military services may be eligible for a two-year extension of their SGLI coverage.

Eligibility

To be eligible for SGLI-DE coverage, you must be totally disabled—which means your disability prevents you from being employed—at the time of your discharge, or have permanent loss of hearing, speech, or some combination of limbs. Please see the VA Benefits website for the full list of conditions covered under SGLI-DE.

Coverage

SGLI-DE is a continuation of your SGLI coverage. SGLI-DE is an extension of an existing service-connected disability policy; it does not cover a new disability or an upgraded level of a previous service-connected disability.

Cost

SGLI-DE coverage is free, with no premium payments, for up to two years from the date you separate from military service.

Application

To apply for coverage, complete and submit form SGLV-8715, Application for the Servicemembers Group Life Insurance (SGLI) Disability Extension.

At the end of your two years of extended coverage, you’ll automatically be eligible for VGLI.

Servicemembers who are unable to work and generate income due to a disability are eligible for S-DVI, which covers disabled veterans. A servicemember with an S-DVI policy can also apply for a VGLI policy.

Eligibility

Service-Disabled Veterans Insurance provides financial assistance for veterans who have service-connected disabilities and are unable to work and generate income. S-DVI has four eligibility criteria:

  • You were released from duty under other than dishonorable status on or after April 25, 1951

  • You were rated by the VA for a service-connected injury, condition or disability

  • You are in good health other than your service-connected condition

  • 4.You applied within two years from the date the VA granted you service-connected disability status

The VA will not approve S-DVI for an existing service-connected disability that gets worse. You’re eligible for S-DVI even if you’ve been rejected by a private-sector insurance company.

Coverage

S-DVI is term or whole life insurance that pays up to $10,000. Policies include term insurance, with lower premiums and a payout to beneficiaries at the time of your death; and permanent plans, which have higher premiums but gain additional cash value that is paid out at the time of disbursement to your beneficiaries. These policies have an “RH” at the beginning of their name.

Unlike most commercial carriers, S-DVI will cover major trauma, PTSD and other service-connected disabilities.

Veterans under age 65 who are totally disabled can purchase a Supplemental S-DVI plan, which provides an additional $30,000 in coverage.

Cost

S-DVI premiums are based on your age, the face value of the insurance policy and whether you choose term life insurance (with lower premiums) or whole life (with higher premiums, a portion of which is paid out to your beneficiaries). Rates are based on a premium cost of $2.57 per $1000 in coverage, meaning a $10,000 policy costs $25.70 per month. You can purchase coverage in increments of $500. The VA provides a table of premium rates in VA Pamphlet 29-9.

Veterans with total disability under age 65 and unable to work for the past six months or more may be able to waive premiums on a $10,000 policy. The cost of a supplemental S-DVI depends on age, the amount of coverage and the type of plan (term or a whole life policy). You can find your rate in VA Pamphlet 29-9.

Changing Coverage

To apply for Supplemental S-DVI, file an Application for Supplemental Service-Related Veterans (RH) Life Insurance, using VA form 29-0188, within one year of VA designation of your disability status, or send a signed letter to the Office of Servicemembers Group Life Insurance (OSGLI) to:
PO Box 41618, Philadelphia PA 19176-9913

In addition to the other types of life insurance coverage available from the VA, severely disabled servicemembers or veterans can also purchase mortgage protection insurance to help their families pay off a home mortgage in the event of their death.

Eligibility

VMLI is restricted to severely disabled servicemembers and veterans who build, remodel or purchase a home using a Specially Adapted Housing grant (SAH), hold title to the home and have an outstanding mortgage balance.

Coverage

VMLI is a term insurance policy that pays up to $200,000 to a mortgage holder, such as a bank or mortgage lender. VMLI coverage and premiums decrease as the mortgage balance declines.

Cost

VMLI premiums are based on a veteran’s age, the current mortgage loan balance, the amount of time left to pay off the mortgage and the amount of VMLI coverage desired. The VA provides a VMLI Premium Calculator to determine the premium cost for your situation.

Application

You must first apply for a grant for Specially Adapted Housing (SAH). If approved, the SAH loan officer advises you if you are eligible for VMLI. If you are eligible, you will provide information about your current mortgage and submit an Application for Veterans Mortgage Life Insurance, VA form 29-8636.

Changing Coverage

Once you set your VMLI coverage amount, you cannot decrease it, although it will decrease as your mortgage shrinks. You have one opportunity to voluntarily increase your VMLI coverage, up to a policy maximum of $200,000. You can also change VMLI coverage if you refinance your mortgage or sell your current home and wish to cover your newly-purchased home.

Private Life Insurance for Veterans

Veterans may want to consider converting VGLI coverage to a private-sector insurance policy. These are available from military mutual aid associations like the Army & Air Force Mutual Aid Association (AAFMAA) and the Navy Mutual Aid Association (NMAA). Some commercial insurance companies such as USAA and the Military Benefit Association (MBA) also have policies designed for veterans.

Before choosing a private life insurance policy, however, a veteran should consider both the pros and cons:

Pros

Private programs are more flexible. For example, some offer lower coverage options than the minimum provided by the VA. With a private program, you can also buy more coverage than the VA allows.

A private insurer may be able to provide coverage equal to S-DVI at the same or lower cost.

Private insurance can usually be added to your government-issued policy.

Cons

Most commercial insurers will not write a policy for a veteran with a military-related injury or disability.

Most commercial insurers do not provide coverage for Accidental Death & Dismemberment, and they won’t waive premiums because of a disability.

What is the Accelerated Benefit Option?

Life insurance is designed to provide financial support to your family and beneficiaries when you die. However, a terminal illness may last for a considerable length of time, and costs can pile up before the very end. The Accelerated Benefit Option provides your beneficiaries with a lump-sum payment of a portion of your insurance value when you are terminally ill.

Eligibility

An Accelerated Benefit Option is available to an SGLI, FSGLI and VGLI policyholder who has a written prognosis from a physician that he or she has nine months or less to live. The benefit can be for the servicemember or for his or her covered spouse.

Coverage

The Accelerated Benefit is up to 50 percent of the face value of the member’s coverage. A member can choose to receive less than 50 percent, in increments of $5,000. The remainder of the value of the insurance policy is paid to beneficiaries upon the death of the member or spouse.

Cost

The Accelerated Benefit is available to any member with an SGLI, FSGLI or VGLI policy at no additional cost.

Application

An SGLI or VGLI policyholder should submit Servicemember/Veteran Accelerated Benefit Option, form 8284. For an FSGLI spouse, submit Servicemember Family Coverage Accelerated Benefit Option, form 8284A. Send your completed application to the Office of Servicemembers Group Life Insurance (OSGLI): 80 Livingston Avenue, Roseland NJ 07068-1733

Resources

State Veterans Affairs Offices

Servicemembers looking for help with VA benefits can locate trained service officers in their area by going to the Department of Veterans Affairs website for their state.

Army & Air Force Mutual Aid Association (AAFMAA)

An approved military mutual aid association since 1879, this VA insurer offers term and permanent policies.

Navy Mutual Aid Association (NMAA)

An approved military mutual aid association since 1879, this VA insurer offers term and permanent policies.

The American Legion

The Legion Education center has information written for and by military vets.

Insurance Information Institute (III)

The III is an insurance industry organization that promotes insurance education.

National Association of Insurance Commissioners (NAIC)

NAIC is the U.S. organization of chief insurance regulators that oversees state insurance regulators. The NAIC provides information on servicemember and veteran insurance in publications and on their website.

Veterans United Network

This insurer and lender is a division of insurance giant Nationwide. Their website has good tips and information on veteran finances, such as comparing term vs. permanent policies.

United Services Automobile Association (USAA)

An insurer and lender known for its auto insurance. USAA also offers home, health and life insurance, including SGLI Supplemental policies, a severe injury benefit for those going into action and a variety of veteran life insurance products.

Military.com

With 10 million registered servicemembers and veterans, Military.com is one of the largest online networking sites for the military, with financial planning tips, information and a job board.

Military Benefit Association (MBA)

Established in 1956, MBA is a nonprofit Voluntary Employee Benefit organization with more than 100,000 members representing large commercial insurers like MetLife, Liberty Mutual, The Hartford and US Bank. In addition to information on their website MilitaryBenefit.org, MBA provides will preparation and estate resolution services free of charge.