Active duty service members, Reserves and Guard members, eligible veterans, and retirees are well covered by military insurance.
Whether it’s life insurance, health insurance, or dental insurance, each type of coverage comes with several different program options.
You can choose the one that offers the best combination of cost and benefits for you and your family.
Military Life Insurance
Military life insurance is one of the most important service benefits.
The obvious benefit is that life insurance provides benefits for your loved ones in the event of your death. But there is a bigger benefit many servicemembers aren’t aware of – many civilian life insurance policies preclude paying benefits if the cause of death is from an act of war. Some commercial life insurance policies also prohibit certain dangerous activities.
Life insurance purchased through the military will pay out if the member dies during an act of war, a terrorist act, or while participating in dangerous military activities.
However, only a select number of private life insurance organizations will do so. For that reason, life insurance needs to be specifically designed for military service members.
Fortunately, several plans are available.
Servicemembers’ Group Life Insurance (SGLI)
The Servicemembers’ Group Life Insurance (SGLI) program provides low-cost term life insurance to eligible service members.
If you’re eligible, you’re automatically entitled to the maximum benefit if you sign up for SGLI when you join the military. Once you sign up, your plan is in place at the coverage you select until you either change your policy or leave the military.
This is a group life insurance policy, with fixed premiums. This means the premiums are the same for everyone, regardless of age, health, medical conditions, or other factors. Your premiums will only change when they change for everyone.
Better yet, the military cannot take away your SGLI policy if something changes with your health or medical status. You can generally increase your coverage up to the limits without any issues, however, you may be required to undergo approval if something has changed with your health status. So it’s important to keep this in mind when setting your coverage limits.
You are automatically insured under full-time SGLI if you are one of the following:
- 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)
The maximum coverage is $400,000, and it’s available in increments of $50,000. Once you leave the service, you’ll continue to be covered – free of charge – up to 120 days after your date of separation.
However, coverage can be extended for up to two years through the SGLI Disability Extension program if you’re totally disabled at separation.
Reserve members are eligible for part-time coverage if you don’t qualify for full-time coverage.
Members of the Ready Reserve or National Guard in non-pay status can still be covered by SGLI if you’re scheduled to perform at least 12 periods of inactive training per year and you’re drilling for points, rather than pay.
There is a monthly premium that’s automatically deducted from your base pay.
The basic SGLI premium is six cents per $1,000 of coverage and includes an additional $1 per month for Traumatic Injury Protection Coverage (see next section). Premium rates, effective July 1, 2019, are as follows:
|SGLI Coverage Amount||Monthly premium rate||TSGLI Premium||Total Monthly Premium Deduction|
As you can see from the above table, you can get $400,000 of term life insurance coverage for $25 per month, which is $300 per year.
Depending on your age and health, that could be substantially less than what you would pay for a similar amount of coverage through a civilian life insurance policy.
Converting SGLI to a commercial policy. Once you leave the service you’ll have the option to convert your policy to a commercial policy within 120 days of your separation date.
You’ll need to select which of the participating insurance companies you’ll get coverage through. You’ll then be subject to standard premium rates, which will most likely be higher than the premiums on your SGLI coverage.
However, you can make the conversion without needing to provide proof of good health.
You can also convert your SGLI policy to a Veterans Group Life Insurance (VGLI) Policy (more on this below).
SGLI Traumatic Injury Protection Program (TSGLI)
SGLI Traumatic Injury Protection Program (TSGLI) provides automatic traumatic injury coverage to all servicemembers who are covered under the SGLI program.
The purpose is to provide short-term financial assistance to those servicemembers and veterans who are severely injured, providing them with financial assistance while they are recovering from their injuries.
TSGLI covers combat injuries, but also injuries sustained on or off duty.
As is the case with SGLI, you’re automatically covered by TSGLI. Coverage is available for active duty members, reservists, National Guard members, funeral honors duty and one-day muster duty.
To be eligible to receive benefits from TSGLI you must meet all the following requirements:
- You must be covered by SGLI at the time you experience a traumatic injury.
- You must incur a scheduled loss, and that loss must be a direct result of a traumatic injury.
- Must have suffered the traumatic injury prior to midnight on the day that you separate from the uniform services.
- You must suffer a scheduled loss within two years (730 days) of the traumatic injury.
- You must survive for a period of not less than seven full days from the date of the traumatic injury.
Once again, the premium cost for TSGLI is $1 per month and is included with your monthly SGLI premium according to the screenshot shown above.
What TSGLI Covers
A covered loss is referred to as a “scheduled loss”, and can result in a benefit of as much as $100,000. The VA has a very long list of scheduled losses, some of which include:
- Loss of sight, $50,000 for each eye.
- Loss of hearing, $25,000 for one ear, $100,000 for both ears.
- Paralysis of all four limbs (quadriplegia), $100,000.
- Complete paralysis of both lower limbs (paraplegia), $100,000.
- 2nd degree burns or worse to at least 20% of the body, or at least 20% of the face, $100,000.
- Amputation of a hand or foot, $50,000.
- And various payouts depending on the injury and its severity.
Veterans Group Life Insurance (VGLI)
Veterans Group Life Insurance (VGLI) allows you to continue your military life insurance after you separate from service. It offers lifetime coverage, as long as you make your premium payments.
You can enroll for the maximum amount of coverage to the SGLI plan you had when you separated from service. You can also opt to take lower coverage, in increments of $10,000.
You will also be able to increase your coverage by $25,000 on your one-year anniversary, and once every five years thereafter.
The increases can continue until you reach the maximum death benefit of $400,000, until age 60. Best of all, you don’t need to provide proof of good health.
Once you separate from service, you’ll have one year and 120 days to apply for VGLI. But you must apply within 240 days of separation otherwise you will need to answer health questions.
If you have any health conditions that might make you uninsurable, be sure to apply within 240 days.
VGLI premium rates are standard and can be viewed on the VGLI Premium Rates page. But below is a sample of monthly premium rates for various coverage levels:
|Amount of Insurance||Age 29 & Below||Age 30-34||Age 35-39||Age 40-44||Age 45-49||Age 50-54||Age 55-59||Age 60-64||Age 65-69||Age 70-74||Age 75 & Over|
As you can see from this table, VGLI is term coverage, in which premiums adjust in five-year brackets. Note, the above table only provides a sample of the available options. VGLI is available in $10,000 increments; for space reasons, we only showed the minimum coverage amount of $10,000, and $50,000 increments until reaching the maximum of $400,000).
The primary benefit of VGLI is that you can maintain coverage for life and you can directly transfer your SGLI coverage to VGLI, even if you have medical conditions that may prevent you from purchasing life insurance elsewhere. Note: this can only be done if you convert your SGLI policy directly upon leaving military service.
Pros & Cons of VGLI
VGLI can be a great way to seamlessly maintain life insurance coverage when you separate from the military. VGLI is also a good option for those who became ill or injured during their service and may not otherwise qualify for a commercial life insurance policy.
On the other hand, VGLI can become very expensive as you age. Unlike SGLI, VGLI premiums are based on your age and increase significantly as you get older. Many people find that in order to afford the premiums, they need to decrease their coverage as they get older.
Keep this in mind before you transition from the military. It is most likely worth buying a term life insurance policy from a commercial company before leaving the military, in order to lock in lower fixed premiums.
Military Healthcare Insurance for Active Duty
We’ve already covered military healthcare insurance in a separate article in some detail.
In this article, we’ll provide a high altitude, summary presentation of the health insurance plans and dental care plans available for active duty service members, Guard and Reserve members, and retirees.
The basic military healthcare plan is TRICARE, and it comes in two basic forms, TRICARE Prime and TRICARE Select. You can choose between the two plans during the TRICARE Open Enrollment Period.
TRICARE Prime is for active duty service members and their families. Active duty service members will automatically be enrolled in the program.
The program has few out-of-pocket costs, though it does offer fewer provider options than TRICARE Select. Much like private health insurance plans, you’re assigned a primary care manager (PCM) who will be a military or network provider. In most cases, you’ll first go to your PCM for treatment, and it’s there that you’ll be referred to specialists if necessary. The PCM will also file your claims.
One of the major advantages of TRICARE Prime is that there are no out-of-pocket costs for you or your family. The only time you will incur costs is if you’re using a point-of-service option without a referral or prior authorization. In that case, you may have to pay up to 15% of the cost of the service rendered.
Certain fees depend on when you joined the military.
- Group A: Sponsor’s enlistment or appointment date is before Jan. 1, 2018.
- Group B: Sponsor’s enlistment or appointment date is on or after Jan. 1, 2018.
The current annual enrollment fee is $289.08 per year if you are single, and $578.16 per year for a family.
If you use an outpatient service, there is a $300 individual deductible, and $600 for a family. You will also pay 50% of outpatient services and hospitalization.
Like all health insurance policies, there is a maximum out-of-pocket amount, referred to as the catastrophic cap. For 2020 the cap is $1,000 per year for active duty service members and their families (in Group A, Group B members have a $1,044 cap).
TRICARE Select is available for the following statuses:
- Active duty family members (active duty service members themselves are not eligible).
- Retired service members and their families.
- Family members of activated Guard/Reserve members.
- Non-activated Guard/Reserve members and their families who qualify under the Transitional Assistance Management Program (provides 180 days of premium-free transitional healthcare benefits after regular TRICARE benefits end).
- Retired Guard/Reserve members at age 60 and their families.
- Medal of Honor recipients and their families.
- Qualified former spouses.
TRICARE Select has no enrollment fee, but there is a long list of out-of-pocket payments you can see by visiting the TRICARE Select cost page. Catastrophic caps are similar to those for TRICARE Prime, but there are variations based on your status.
You must use a TRICARE authorized provider, but referrals are not required for most services.
Military Healthcare for Guard and Reserves
If you’re a member of the Selected Reserve, you and your family are eligible for TRICARE Reserve Select. Eligibility is based on the following circumstances:
- When you are not on active duty orders.
- You’re not covered under the Transitional Assistance Management Program.
- You’re not eligible to be enrolled in the Federal Employees Health Benefits program (FEHB).
If you do become activated, you’ll be eligible to go back to TRICARE Prime. With TRICARE Reserve Select you must use a TRICARE-authorized provider.
There is an enrollment fee of $42.38 per month for the service member, or $218.01 for the member and his or her family. Out-of-pocket costs are similar to those for TRICARE Select.
Military Healthcare for Retirees – TRICARE for Life
Active duty military retirees are eligible for TRICARE Prime until they reach the age of 65, at which point they transition to TRICARE For Life.
Retired Guard and Reserve members in the gray area have different medical coverage options until they reach age 60, at which point they are eligible for TRICARE Prime, and age 65, at which they transition to TRICARE for Life.
You must participate in and pay premiums for Medicare Bart B. TRICARE For Life will pay medical expenses after Medicare. There is no annual or monthly enrollment fee for the program. Treatment must occur in either the US or US territories.
But in one of the perks of the program, TRICARE For Life will become the first payer if you incur services in overseas locations.
Eligibility: Active duty, retired or members of the Guard or Reserves. Your family members are also eligible if they are registered in the Defense Enrollment Eligibility Reporting System (DEERS).
Once again, there is no cost to enroll in the program. Most medical services will be 100% covered by TRICARE For Life, over and above the amount paid by Medicare.
There are certain costs, and you can see them on the TRICARE For Life cost page. There’s an annual deductible of $150 for the servicemember and $300 for his or her family. The catastrophic cap is $3,000 per year.
Retired service members and their families are also eligible for TRICARE Prime, TRICARE Select, US Family Health Plan (available in limited areas), and TRICARE Select Overseas.
Healthcare Options After Leaving the Military
- Transitional Assistance Management Program (TAMP) – available to military members making an unexpected transition from the military. Also available for family members.
- Continued Health Care Benefit Program (CHCBP) – Similar to a civilian COBRA program; available to all military members when they leave the service. Also available for family members.
- VA Health Care – Available to eligible veterans, depending on individual circumstances. Requires enrollment.
- TRICARE Prime – Active duty retirees and their family members
- TRICARE for Life – Military retirees who are eligible for Medicare (age 65 and older)
- TRICARE Reserve Select Retiree – Retired members of the Guard and Reserves (other healthcare options after retiring from Guard/Reserves).
You can also look for health care coverage through a civilian employer if your employer offers healthcare coverage after you leave the military.
Military Dental Care
There are three dental care plans available for current and former members of the military.
Active Duty Dental Program
The Active Duty Dental Program covers both dental care at both military dental clinics and civilian dental care providers.
To be eligible, you must be one of the following:
- Active duty service members.
- Service members who need line of duty care.
- Foreign force members stationed in the US.
- National Guard and Reserve members who are 1) on active duty orders, 2) issued delayed-effective-date orders during pre-activation period, or 3) covered by the transitional assistance management program.
Civilian dental care is covered when you get a referral from your military dental clinic, or you live in a remote location where no military dental clinic is located. There are no out-of-pocket costs for covered dental services.
TRICARE Dental Program
TRICARE Dental Program is a voluntary dental plan available to National Guard or Reserve members who aren’t on active duty and are not covered by the Transitional Assistance Management Program (TAMP). It also covers the service member’s family members.
It’s also available for family members of active duty service members. Like TRICARE Prime, it’s automatic if you’re on active duty.
Covered services include typical dental services, such as exams, cleanings, fillings, oral surgery, orthodontics, and braces.
Monthly premiums are as follows:
Cost-sharing percentages are available on the TRICARE Dental Program cost-sharing page. There is no cost-sharing for routine checkups, but more complicated procedures can require a contribution of between 20% and 50% of the total cost. The maximum benefit is $1,500 per person per year.
Until 2019, military retirees were eligible for TRICARE Dental. However, that changed, when the military transitioned retirees to the Federal Employees Dental and Vision Insurance Program, or simply FEDVIP Dental is available for the following:
- Retired service members.
- Family members of retired service members.
- Retired Guard and Reserve members.
- Family members of retired Guard and Reserve members.
- Medal of Honor recipients.
- Family members of Medal of Honor recipients.
The program is voluntary, and works with nine different private insurance carriers. For that reason, the fees, cost-sharing, and covered procedures will vary by company.
You’ll have to check the details for each carrier through the FEDVIP Dental website.
Advantages & Disadvantages of Military Insurance
- Medical plans provide comprehensive coverage.
- Both medical and life insurance policies are less expensive than their civilian counterparts.
- Medical coverage extends to family members at little or no cost.
- Out-of-pocket medical costs are substantially lower than what they are with civilian health insurance.
- You can get treatment through both military and civilian health providers.
- Military life insurance can either be converted to permanent term coverage through VGLI, or to a commercial carrier at favorable premium rates.
- Military medical care may exclude certain types of care, including chiropractic, abortions, nonsurgical treatments for weight loss or obesity, alcohol, smoking and drug cessation products and treatments.
- Paperwork requirements for military medical insurance are often higher than what they are for civilian coverage.
- If you miss the deadline to convert your military life insurance, you’ll need to medically qualify for a civilian policy.
- Military life insurance is limited to $400,000, which may not be adequate for a service member with a family that includes young children.
If you notice there are more pros than cons with military health and life insurance, that’s not a coincidence.
You’re almost always better off having either coverage than equivalent policies from the civilian market. It’s one of the major benefits of being a member of the armed forces.