Life Insurance Options for Military Members

Military members have special life insurance needs. The following life insurance options are available to military members and their family members.
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Life Insurance options for Military Members

You most likely have insurance policies on your home, vehicles, personal property, and even your cell phone to protect yourself financially if damages or an accident were to occur. Do you have life insurance to protect your family?

If you don’t yet have a life insurance policy, now is the time to consider your options carefully and make sure that your family will be just as protected as your home or car in the event of a tragedy. A good life insurance policy can mean the difference between your loved ones struggling to make ends meet or being able to cope with your absence.

Deciding to purchase life insurance is one of the most important decisions you will ever make for your family. As such, it’s important to understand your options, because there are several different types of life insurance to choose from. You also need to decide which company or service to use for your coverage and how much insurance you should purchase.

This military life insurance guide gives you a much more thorough overview of the types of insurance, why you need it and how much to buy.

You may want to start your search for a life insurance policy with a company that knows the ins and outs of the military lifestyle.

The following life insurance options are policies available only to service members and their eligible family members. They are broken down into life insurance options through the government (SGLI and VGLI) and life insurance options available through military organizations and military-related companies. If you are a service member or veteran and choose one of these programs, you can rest a little easier, knowing that your family will be covered.

Servicemembers Group Life Insurance (SGLI)

The Service Members Group Life Insurance (SGLI) is a low-cost benefits program that provides affordable life insurance options to eligible service members. According to the U.S. Department of Veterans Affairs, you are an eligible member if you are:

  • Active duty member of the Army, Navy, Air Force, Marines, or Coast Guard
  • Commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS)
  • Cadet or midshipman of the U.S. military academies
  • Member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises
  • Member of the Ready Reserve or National Guard and are scheduled to perform at least 12 periods of inactive training per year
  • Servicemember who volunteers for a mobilization category in the Individual Ready Reserve (IRR)

If you are eligible, you are automatically insured with maximum SGLI coverage; you don’t have to apply for the coverage. Also, even though you are issued maximum coverage, you don’t have to maintain the maximum (which is $400,000). You can make changes to your policy at any time, designate your beneficiaries, decline SGLI coverage altogether or simply opt for a lesser amount of coverage.

SGLI is very valuable for military members because it is a guaranteed life insurance policy at a flat rate. Members do not need to go through underwriting when applying for SGLI (underwriting is an application process that assesses your specific risks to the insurer and determines whether you are insurable, and the premiums you will need to pay).

Almost all other life insurance policies require an underwriting process that can make it more costly or more difficult to obtain life insurance. In some cases, military members or veterans find that obtaining life insurance outside of SGLI or VGLI is impossible.

There are two primary downsides to SGLI:

SGLI Rates

You can see the current SGLI rates here.

SGLI Coverage AmountMonthly premium rateTSGLI PremiumTotal Monthly Premium Deduction
$400,000$24.00$1.00$25.00
$350,000$21.00$1.00$22.00
$300,000$18.00$1.00$19.00
$250,000$15.00$1.00$16.00
$200,000$12.00$1.00$13.00
$150,000$9.00$1.00$10.00
$100,000$6.00$1.00$7.00
$50,000$3.00$1.00$4.00

Veterans Group Life Insurance

Veterans’ Group Life Insurance (VGLI) is another government-backed life insurance policy available only to service members. However, it is different from SGLI coverage since it only becomes available upon a service member’s release from the service. VGLI allows service members to convert their full-time SGLI coverage to a renewable term life insurance policy once they are no longer on active duty.

With VGLI, a veteran can receive coverage in increments of $10,000 up to the maximum of $400,000. However, a veteran’s VGLI benefits cannot be more than the amount of coverage they had in their SGLI at the time of their separation from the service.

VGLI rates are based on your age, and they change with time. It’s also important to note you can convert your SGLI policy to a VGLI policy upon leaving the military without going through an underwriting process. However, if you do not convert your SGLI policy to a VGLI policy immediately after leaving the service, you may have to go through an underwriting process if you later decide you wish to apply for VGLI. This can make VGLI difficult to obtain. So please do your research before you separate so you know whether or not to convert your policy.

VGLI Premiums Ages 18 – 54

Amount of InsuranceAge 29 & BelowAge 30-34Age 35-39Age 40-44Age 45-49Age 50-54
$400,000$28.00$36.00$48.00$64.00$84.00$132.00
$350,00024.5031.5042.0056.0073.50115.50
$300,00021.0037.0036.0048.0063.0099.00
$250,00017.5022.5030.0040.0052.5082.50
$200,00014.0018.0024.0032.0042.0066.00
$150,00010.5013.5018.0024.0031.5049.50
$100,0007.009.0012.0016.0021.0033.00
$50,0003.504.506.008.0010.5016.50
$10,0000.700.901.201.602.103.30

VGLI Premiums Ages 55 and Up

Amount of InsuranceAge 55-59Age 60-64Age 65-69Age 70-74Age 75-79Age 80 & Over
$400,000$240.00$396.00$588.00$904.00$1,712.00$1,800.00
$350,000210.00346.50514.50791.001,498.001,575.00
$300,000180.00297.00441.00678.001,284.001,350.00
$250,000150.00247.50367.50565.001,070.001,125.00
$200,000120.00198.00294.00452.00856.00900.00
$150,00090.00148.50220.50339.00642.00675.00
$100,00060.0099.00147.00226.00428.00450.00
$50,00030.0049.5073.50113.00214.00225.00
$10,0006.009.9014.7022.6042.8045.00

Other Life Insurance Options

SGLI is an excellent benefit since it is a guaranteed life insurance policy with flat premiums, regardless of your age, health, or other factors. You don’t need to go through an underwriting process. You also don’t need to go through an underwriting process if you convert your SGLI policy to a VGLI policy upon separating from the military.

But sometimes you may wish to purchase additional life insurance, you may wish for a life insurance policy you can take with you after leaving the military, or you may find better rates elsewhere. So it’s good to assess your needs and shop around.

There are many pros and cons to purchasing life insurance through a private organization or company, including the ability to buy larger policies, portability, and more. It’s a good idea to get quotes through several companies, as rates may be higher or lower than what you can find through a military organization. You should also read the fine print, because many private life insurance companies may not cover a death that occurs in a war zone, or during certain “dangerous” activities.

Be sure to read multiple reviews and get several quotes from life insurance companies so you can compare the premiums and details of the life insurance plan. Do keep in mind that life insurance purchased from other organizations will go through an underwriting process and the insurance company will assess your health, age, and other factors before finalizing your premiums.

The following options are available only to military members and their families. This list isn’t meant to be all-inclusive, but to give you a starting point for your comparison shopping. You may also find it good to shop around through non-military organizations or through a life insurance agent.

Armed Forces Insurance

Armed Forces Insurance

Armed Forces Insurance offers both term and permanent life insurance coverage for eligible members. Eligible members include current and former military members (including Guard and Reserves), surviving spouses, active and retired DoD civilian employees, current and former commissioned officers in the NOAA and PHS, service academy and ROTC members, and more (full list).

Navy Mutual Life Insurance

Navy Mutual is one of the oldest non-profit Veterans Service organizations. They have served the military community for well over 100 years. As a non-profit organization, their goal is to serve their members by keeping rates competitive.

Navy Mutual offers term life insurance, whole life insurance, and several types of annuities. You can learn more at the Navy Mutual website.

USAA Life Insurance

USAA life insurance

USAA is a well-known financial services and insurance company that is open to all military members and their family members. USAA life insurance policies can be a great compliment to an SGLI or VGLI policy.

The USAA website also features interactive tools that explain the various types of life insurance and tools to help you determine how much life insurance you need to protect your family.

USAA’s customer service department can also help you determine your needs over the phone. You can get a Free Life Insurance Quote from USAA in just a few minutes.

Choosing the Right Life Insurance Coverage

There are several factors to consider before buying your life insurance policy. How much life insurance will you need? Should you only buy a life insurance policy through the government (SGLI or VGLI)? Which type of life insurance is best – term life insurance, or whole life insurance?

How much life insurance do you need?

Life insurance is designed to replace your income and earning potential if you die. So consider how much money your family will need if you are no longer there to provide for them. Consider things such as your mortgage, any debt you may have, whether you need to pay for your children’s college, and other factors.

One estimate is to purchase a plan worth ten times your annual salary. So, if you make $35,000 a year, your coverage should be at least $350,000. But you may find this to be inadequate if you have a mortgage and other debt, and you anticipate your family needing more money than that to cover major future expenses such as college.

If you are not the primary breadwinner in the family, however, you may be able to make do with a lesser policy. If you aren’t sure how much you should purchase, consider plugging your numbers into a life insurance coverage calculator. It will help you to make a more informed decision based on the numbers.

Whether you choose to take advantage of SGLI coverage or go with a private company, make sure to purchase a policy that will, at least, cover burial costs as well as one or two years’ worth of living expenses. You wouldn’t want to leave your family struggling financially if you were no longer there to support them.

Is SGLI or VGLI enough?

Many servicemembers find they need more than a $400,000 life insurance policy. If you determine you need more than a $400,000 policy, then consider buying another life insurance policy from a non-military or non-government source. This will allow you to keep your life insurance when you leave the military. Also, note that VGLI can become very expensive as you age. A 30-year term life insurance policy purchased at a young age may be much less expensive than VGLI in the long run.

Which type of life insurance should you buy—term life insurance or whole life insurance?

Most financial experts (that is, non-life insurance salesmen) recommend purchasing a term life insurance policy instead of a whole life policy. Term life has substantially lower annual premiums for the same amount of whole life insurance coverage. This affordability enables individuals to use remaining funds to invest, pay off debt, or pay for other needs.

Many people will tout whole life insurance as an investment. However, whole life insurance premiums are substantially more expensive for the same level of term coverage and it can take years of premium payments before you earn any substantial cash value in your policy. In addition, management fees can be high (and difficult to understand), and the investment aspect of life insurance is often out-performed by comparable investments held in retirement or taxable investment accounts.

Most people are better off keeping their life insurance and investments separate. In this case, it usually makes more sense to purchase a term life insurance policy and invest the difference in an IRA or in your Thrift Savings Plan. Here is a more in-depth comparison of term life and whole life insurance.

Where Should You Buy a Term Life Policy?

You can definitely check out the aforementioned military life insurance companies, such as USAA, Navy Mutual, and Armed Forces Institute. They generally offer great rates, and won’t have a war clause that would prevent a payout in the event you die during a conflict (some civilian life insurance policies prohibit payout out in those situations).

Do you have life insurance coverage for yourself or your family? What factored into your decision when you chose your coverage?

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About Kristi Muse

Kristi Muse is a military reservist spouse and freelance writer. She loves writing about strategies to save military families money, get out of debt, and live a frugal life. Kristi shares her own experiences about debt and parenthood on her blog Moderate Muse.

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  1. Brian says

    Do you have any idea what happens to life insurance policies in force prior to one joining the military?

    In my circumstance, as a healthcare professional, I have a seven figure life policy. I’m curious, before calling my carrier, what would happen if I take a direct commission as a medical officer in one of the service’s reserve components.

    Thanks!

    • Ryan Guina says

      Hello Brian,

      So far as I am aware, simply joining the military will not invalidate a life insurance policy. However, some life insurance policies have a rider that excludes payout if the member dies during an act of war (but will still pay out for other causes of death). So I would look for such a rider in your policy. If there isn’t one, then you shouldn’t have anything to worry about. If there is one, then you may consider obtaining a different life insurance policy from a company that doesn’t have such a clause (the military’s Servicemembers Group Life Insurance policy, or SGLI is one such plan; there are also many military-centric providers that don’t include such riders, including companies like USAA, Navy Mutual Life, and many other policies you can obtain through military organizations). You can cancel your old policy once you have a new life insurance policy in place.

      Overall, you should be able to find an affordable life insurance policy even after joining the military. So I wouldn’t make this part of the decision process prevent you from joining the military. There are plenty of places you can find an affordable life insurance policy as a military member.

  2. Kelvinder Grewal says

    Within the last year I have done my own research and found some powerful stuff I think everyone should be educated on!

    So most of the article focus is on Group Term Insurance, then compares Term Life to Whole Life which is an old, outdated program.

    What about Universal Life, Variable Universal Life and Index Universal life?

    What about the TAX benefit options under IRC code 7702 for cash value accumulation?

    Or how some Index Universal Life policies can guarantee .75% return instead of going negative with the market and give you potential growing cap of 15%?

    And, in worst case, you do pass, the death benefit face value and cash value all go to your beneficiaries tax free?

    I feel like we have to inform the consumer so they can make informed life decisions. The IUL seems more and more like a retirement option without management fees then just old life insurance.

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