Military members have access to Servicemembers Group Life Insurance (SGLI), which is an excellent life insurance program. It is low cost, and because it is a group life insurance program, it doesn’t require a medical exam, or base rates on health, age, gender, or other factors. Unfortunately, it isn’t a benefit you can take with you when you leave the military. Thankfully, though, the VA offers a cost-effective alternative called Veterans Group Life Insurance (VGLI).
Veterans’ Group Life Insurance Benefits
Veterans Group Life Insurance has several similarities to SGLI, its active military counterpart. But there are a couple of key differences.
The most important similarity is that it is a group health insurance program. That means all members are rolled into one group, regardless of health, gender, and other factors.
The key difference is that VGLI premiums are based on age.
Health conditions won’t prevent you from buying a VGLI policy – if you apply right away. If you apply for a VGLI policy within 120 days of separating from the service, you won’t have to take a physical or submit your medical history. That means you can still get coverage if you are a smoker, have medical or physical problems, etc. You also won’t be excluded for having Post-Traumatic Stress Disorder (PTSD) or similar military-related issues. You will need to submit a statement of health if you apply for VGLI more than 120 days after leaving the military.
Veterans Group Life Insurance coverage limits. You can buy up to $400,000 worth of VGLI coverage in $10,000 increments. It’s important to understand that you can only buy the same amount of coverage you had with your SGLI plan. So if you only had $50,000 in SGLI coverage, you would only be able to buy $50,000 of VGLI coverage. It’s a good idea to max out your SGLI coverage before you separate from the military if you plan on maxing out your VGLI policy.
It’s easy to convert your SGLI coverage. The VA makes it easy to convert your Servicemembers Group Life Insurance plan to a Veterans Group Life Insurance when you leave military service. Here is more info about how to convert SGLI to VGLI.
Reasonably affordable premiums. The rates are reasonable, especially if you have health conditions which may prohibit you from purchasing life insurance elsewhere. The premiums are only based on age, not on gender or health conditions. Here is the full list of VGLI premiums.
That said, rates do become more expensive as you age. Many veterans find full coverage to be cost-prohibitive as they reach the higher age groups. I encourage veterans to look into buying their own term life insurance policy as they are nearing the end of their service commitment. They may be able to find a more affordable policy since the premiums never increase under a term life policy.
Should you buy Veterans Group Life Insurance?
VGLI is a great opportunity for many veterans, but it may not be the best in terms of cost. I encourage you to look into your personal needs to determine how much life insurance you need, then run some quotes from various insurance providers before making your purchase. This page has recommendations and reviews from over 65 life insurance companies. You should be able to find a good match on that site.
There are a few groups of people who should strongly consider VGLI. If you have health conditions which might make it difficult to buy life insurance on the outside, then you might want to consider a VGLI policy. Just be sure to roll over your SGLI policy within the 120-day window to avoid having to submit evidence of good health.
Additional Veteran’s Group Life Insurance information. The VA is the best place to get more info on VGLI benefits and policies. Here is their website: http://www.insurance.va.gov/sgliSite/VGLI/VGLI.htm You can also contact them via phone to ask specific questions.