One of the most important things you need to consider when making the transition from military service to civilian life is how much life insurance you need and to make sure you are covered when you leave active duty service. Military members may need more life insurance than civilians, or it may be the opposite for your situation.
Life insurance is there to make sure your family will have a source of income if you are no longer alive to provide for them. The last thing you want is to leave active duty service and leave your family without a lifeline. Thankfully, there is a group life insurance program in place that allows military veterans to transfer their Servicemembers Group Life Insurance (SGLI) to a similar low cost group life insurance program called Veterans’ Group Life Insurance (VGLI).
Comparing SGLI and VGLI
The important distinction between SGLI and VGLI is who is eligible for either program. While SGLI is a low cost program for group life insurance covering active servicemembers, VGLI is a low cost life insurance program for military veterans, with premiums are based on the servicemember’s age. VGLI allows servicemembers to convert their SGLI coverage to a VGLI renewable term life insurance. It’s easy to convert an SGLI Policy to VGLI policy if you follow these simple steps.
How to convert SGLI to VGLI
In order convert your SGLI to a VGLI policy, you must apply within one year and 120 days from your discharge from active military service. A servicemember who submits an application within 120 days of his discharge isn’t required to submit evidence of good health. No doctor examination is required as long as he applies for the conversion within this time frame. Should a servicemember wish to apply for the conversion after the 120 day period, however, he will be required to submit evidence of good health via a doctor’s examination.
According to the VA website, in order to convert your SGLI group life insurance policy to a VGLI group life insurance policy, a servicemember can apply for the coverage change online using the VA’s online application. The online application walks you through each step of the process, including providing a chart to determine the cost of your premium amount. Your application will be evaluated instantly online and they’ll let you know if your coverage is approved, or if your application will require further review in order to provide you with the VGLI coverage.
Should a servicemember not have access to the Internet, she may also apply for the SGLI/VGLI conversion via the US postal service using form SGLV 8714. The form should be mail to the Office of Servicemembers’ Group Life Insurance (OSGLI) at PO Box 41618, Philadelphia, PA 19176-9913. You’ll need to include the first month’s premium (listed on the form), and a copy of your DD 214 or other proof of service.
It’s important to meet all the qualifications in order to successfully convert your SGLI Policy to VGLI policy, so be sure to visit the VA site, read more about it and get your required forms submitted within one year and 120 days for the best results.
Should you convert Servicemembers Group Life Insurance to Veterans’ Group Life Insurance?
Advantages of converting SGLI to VGLI. Veterans’ Group Life Insurance has a few advantages over a civilian life insurance policy because if you apply within 120 days of leaving active duty service you will not be required to take a physical or make a statement of health. In addition, if you apply to VGLI directly after leaving the service and within the 120 day window, VGLI premium rates are only based on age, and not health, gender, smoker or non-smoker, or other factors. If you have health factors that may preclude you from life insurance eligibility, then you should strongly consider VGLI.
Disadvantages of converting SGLI to VGLI.The maximum amount of life insurance coverage you may convert to VGLI is limited to the max amount of coverage you had under SGLI. So if you are planning on converting to VGLI after you separate from the military it is a good idea to increase your SGLI coverage to the max limit allowed (currently $400,000). VGLI life insurance premiums may also be more expensive for some people, especially those who are young and in good health. It is a good idea to shop around before making a purchase.
Comparing VGLI to other civilian life insurance
The main advantage was previously listed – because VGLI is a group life insurance plan, it is possible to get your policy approved without having to take a physical or other medical tests. However, it is also possible that VGLI may be more expensive than a traditional term life insurance policy available to anyone. For this reason it is a good idea to shop around for free life insurance quotes and compare life insurance premiums before electing which life insurance policy to purchase.