What is Veterans’ Mortgage Life Insurance (VMLI)?

Veterans’ Mortgage Life Insurance (VMLI) is an insurance protection program that has been designed to provide mortgage life insurance to both eligible disabled veterans and eligible service members who are severely disabled. Assisting the families of disabled veterans and service members in paying off a mortgage in the untimely event of their death is VMLI’s main focus. This insurance program ensures that the loved ones of a disabled veteran or service member are not financially burdened with mortgage payments while mourning a loss in their family. VMJI focuses its efforts on new and existing mortgages, refinanced mortgages, second mortgages, and construction loans instead of reverse mortgages or home equity lines of credit. Unlike Veterans’ Group Life Insurance, though, it is not available to all military veterans. However, VMLI is a great program many military families take advantage of.

Who is Eligible for Veterans’ Mortgage Life Insurance?

Before applying for VMLI, you should be aware that only severely disabled veterans and service members receiving a Specially Adapted Housing Grant (SAH) from the Veterans Administration will be eligible for the Veterans’ Mortgage Life Insurance program. The Specially Adapted Housing Grant is used to assist the severely disabled veteran or service member in building or modifying their existing home to accommodate his or her disabilities. Since the disabilities these veterans and service members suffer from are service-connected, permanent and total disability compensation is made available. The U.S. Department of Veterans Affairs’ eligibility requirements for VMLI are outlined below:

1. Receive a Specially Adapted Housing Grant (SAH) to assist in building, remodeling, or purchasing a house
2. Own the title to the house
3. Secure a mortgage on the house
4. Apply before a veteran’s 70th birthday

If a recipient decides to eventually sell their house to purchase another, he or she would be eligible to apply again for Veterans’ Mortgage Life Insurance. PL 110-289 Extends VMLI Coverage: Effective July 30, 2008, PL 110-289 extended VMLI to disabled active duty service members as well as service members and veterans who suffer from a severe burn injury.

Applying for VMLI

To initiate the Specially Adapted Housing Grant application process, applicants should fill out VA Form 26-4555, or “Veteran’s Application in Acquiring Specially Adapted Housing or Special Home Adaptation Grant.” This application can easily be completed online or manually submitted to the VA regional office where the applicant’s original claim file is stored. Veterans and service members receiving a grant through Specially Adapted Housing are notified by Loan Guaranty personnel during their interview if they’re eligible for the Veterans’ Mortgage Life Insurance for the purpose of covering the unpaid portion of the mortgage on their home. The Specially Adapted Housing Agent will assist the veteran or service member in completing the required forms for the Veterans’ Mortgage Life Insurance at that time. Applicants should complete and submit Form 29-8636, or Application for Veterans’ Mortgage Life Insurance, and be prepared to answer any questions regarding their current mortgage. If the severely disabled veteran or service member chooses not to apply for the coverage at the time of the loan origination, the Veterans Administration will send a letter to them informing them of their eligibility for the insurance coverage. Information on their current mortgage will also be required for documentation.

VMLI Cost and Coverage

The Veterans’ Mortgage Life Insurance program will provide the severely disabled veteran or service member with up to $200,000 in mortgage life insurance. However, recipients may select the level of insurance coverage that best accommodates the needs of family members. This amount is payable to the mortgage holder (such as the lender or the bank) in the untimely event of the severely disabled veteran’s death or service member’s death. Beneficiaries will not need to be named with the VMLI program. The coverage amount will be equal to the amount of money still owed on the mortgage and the maximum will never exceed $200,000. Veterans’ Mortgage Life Insurance is a term life insurance which decreases in value as the amount of the loan is reduced. It’s also important to note that VMLI has no inherent loan or cash values. This mortgage life insurance also does not pay dividends, unlike other forms of life insurance. Once a recipient’s mortgage is paid in full or they lose the title to their house, VMLI coverage will be terminated. If a recipient cancels VMLI, their insurance coverage will also end.

Filing a VMLI Claim

The U.S. Department of Veterans Affairs suggests the following plan of action to expedite claims processing:

1. Contact the VA Insurance Center (VAIC) and report the death of your veteran.
2. Locate your Veteran’s Claim Number.
3. Obtain your Veteran’s Death Certificate (non-certified copies are acceptable).
4. Gather a Payoff or Account Statement including mortgage balance upon final payment before veteran’s passing, mortgage company address for VMJI payment delivery, and per diem rate (prorated interest amount needing to be paid for remaining days in the month following a death).
5. Send all required documents from Step 4 to the VA Claim Address at P.O. Box 7208, Philadelphia, PA 19101. Or, send required documentation via VA Claim Fax at 1(888) 748-5822.

When initiating the VMLI claims process, do not allocate other funds or forms of insurance toward paying off your mortgage. But, do continue paying off the mortgage while anticipating your VMLI coverage.

VMLI Premium Calculator

Premium calculators are available to assist you in determining your insurance rates. You can use the VMLI Premium Calculator in conjunction with the U.S. Department of Veterans Affairs for more details on calculating your VMLI premium amount. As with all calculator tools, the premium amount computed only constitutes an estimate, not a guaranteed premium amount. Since premiums are offered at a standard rate, individuals will not be issued higher premiums due to their disability status. Using the VMLI Premium Calculator tool, your VMLI premium amount estimate will be determined based on the following criteria:

• Age: Enter an age closely matching your birthday within a six-month span of time (past or future) from today’s current date. For instance, if today is April 1 but your birthday is June 30, what age will you be on June 30?
• Loan Duration: To make things simple, loan duration equals the number of years you will be required to make mortgage payments. Make sure to round this number off for insurance purposes (i.e., 5 years and 3 months remaining would translate to 5 years).
• Current Mortgage Balance: For this calculator, make sure to round off your current mortgage balance to the nearest dollar. Don’t include any decimal points or a dollar sign in your entry.
• Requested Coverage Amount: As mentioned above, your coverage amount cannot surpass your current mortgage balance or the maximum $200,000 VMLI coverage permitted. Just like your current mortgage balance entry, round off to the nearest dollar. Don’t include any decimal points or a dollar sign in your entry.

You will more than likely be asked to provide mortgage documentation during the VMLI application process so an exact premium amount can be determined.

Additional Information on Veterans’ Mortgage Life Insurance

For more information on Veterans’ Mortgage Life Insurance, visit their website to download a free VMLI brochure. On their website you can also find more detailed information on mortgage protection insurance and how it financially relieves the families of disabled veterans or service members when they need it most. If Veterans’ Mortage Life Insurance is not the best option for you and your family, there are other VA sponsored insurance programs to consider. These programs include Service-Disabled Veterans Insurance (S-DVI), Supplemental S-DVI, and Veterans’ Group Life Insurance.