Life insurance is an important thing to have, as it prepares everyone for the possibility of dying and leaving loved ones behind. Life insurance gives more peace of mind because you can rest easy, knowing that if you were to die, your family and loved ones would be helped. While there are many different places that offer life insurance, the best place for a servicemember or a veteran to receive it from is the Department of Veteran Affairs. As part of the VA’s mission to serve servicemembers, veterans and their families, the VA provides very good life insurance. The VA life insurance program was developed to provide financial security for your family given the extraordinary risks involved in military service.
Most servicemember’s should already have insurance from the VA. This insurance is called the Servicemembers’ Group Life Insurance (SGLI). SGLI is a low-cost group term life insurance program strictly for servicemembers. On top of being covered while providing service to our country, the coverage can be extended for up to two years if the servicemember is totally disabled at separation from service.
The great thing about the SGLI coverage is that it is automatic for most people in the service of their country. Those who are automatically covered are active duty members of the Army, Navy, Air Force, Marines, or Coast Guard, Commissioned members of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS), cadets or midshipmen of the U.S. military academies, members, cadets, or midshipmen of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises, members of the Ready Reserve or National Guard that are scheduled to perform at least 12 periods of inactive training per year, and servicemembers who volunteer for mobilization category in the Individual Ready Reserve (IRR).
Those servicemembers who are automatically issued the SGLI are issued the maximum SGLI coverage. SGLI is low-cost, and as was previously mentioned, if the servicemember falls into any of the automatic categories, he or she are automatically enrolled and do not need to apply for anything. They can make changes to the SGLI coverage if they wish to not receive the maximum coverage. For example, servicemembers can decline SGLI coverage, select a lesser amount than maximum coverage, designate beneficiaries, and/or make other changes.
The maximum coverage that the SGLI covers is up to $400,000, with a minimum of $50,000. As you are searching for the right amount, note that the coverage is only available in increments of $50,000. Servicemembers who are covered receive 120 days of free coverage from their date of separation from service. Part-time coverage is also provided to Reserve members who do not qualify for full-time coverage. It is important to note that members covered part-time do not receive 120 days of free coverage.
If the servicemember is totally disabled at the time of separation, or unable to work, coverage can be extended for up to two years through the SGLI Disability Extension. At the end of the extension period, the servicemember would automatically become eligible for Veterans’ Group Life Insurance, subject to premium payments.
SGLI is considered low-cost, and if you have SGLI coverage, you pay a monthly premium that is automatically deducted from your base pay. The current premium rate for the SGLI is 6.5 cents per $1,000 of insurance. So for example, if the servicemember signed up for the minimum of $50,000, that servicemember would only pay $3.25 a month, plus $1.00 per month for Traumatic Injury Protection coverage, which the premium includes.
Eventually, all servicemembers end their career in the military and become veterans. When this happens, they will qualify to receive the Veterans Group Life Insurance (VGLI). Unlike the SGLI, the VGLI is not automatic and you have to apply to convert your SGLI to VGLI. You only have one year and 120 days from discharge to apply to convert life insurances. Any veterans who submit their application within 240 days of their discharge are not required to submit evidence of good health, while those veterans who apply after 240 day of their discharge are required to answer questions about their health and provide evidence.
Although the VA provides the option to convert their SGLI into VGLI, it is not required. The veteran is free to choose a commercial policy if they so desire. To find out more about VGLI and converting it to other life insurances, visit benefits.va.gov.