What Happens to SGLI After Leaving the Military?

Navy Mutual offers a permanent life insurance alternative to service members and their families who were covered by SGLI or FSGLI while in service. You don’t have to undergo a medical exam or underwriter review if you apply within 120 days of separation.
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Navy Mutual life annuity

Servicemembers’ Group Life Insurance (SGLI) is the military’s life insurance option for active-duty service members, and it is one of the most affordable options on the market.

Unlike commercial life insurance, all service members pay the same premiums based solely on their elected coverage amount. Currently, $400,000 of SGLI coverage (the maximum amount of coverage offered) costs $24 per month plus an additional $1 for traumatic injury protection.

Traumatic injury protection (TSGLI) provides servicemembers with financial support should they be injured while serving. TSGLI provides up to $100,000 in financial support for service members during their recovery.

TSGLI also covers all service members who have SGLI; premiums for both are automatically deducted from a servicemember’s pay.

SGLI also has a family component called family SGLI (FSGLI). FSGLI provides coverage to spouses and dependent children of servicemembers under a different cost structure than SGLI.

Dependent children receive up to $10,000 in coverage for free. Spouses are eligible for up to $100,000 of life insurance coverage for premiums that change based on their age.

For $100,000 of coverage, a spouse can expect to pay between $4.50 and $45 per month. Most active-duty spouses receive coverage for less than $10 per month.

SGLI and FSGLI coverage last until a service member changes their election amounts, declines coverage or leaves military service.

What Happens to SGLI Coverage Upon Separation?

SGLI and FSGLI coverage continues for 120 days after a service member retires or separates from the military. However, a servicemember loses their TSGLI coverage immediately upon leaving the service.

Here are some options for maintaining life insurance coverage outside of the military.

Apply for an SGLI Disability Extension

You can apply for an SGLI disability extension if you meet certain requirements:

  • Experiencing total disability at the time of separation that prevents you from working
  • Lost hearing in both ears
  • Lost speaking ability
  • Unable to use both hands, feet, eyes or a combination of these disabilities

The extension will grant you coverage for up to two years post-separation if approved. After the extension ends, you can convert your SGLI to Veterans’ Group Life Insurance (VGLI). You can keep VGLI as long as you continue making premium payments.

Convert Your SGLI to VGLI

VGLI may be a good option for veterans with health concerns that may prevent them from getting affordable commercial life insurance coverage.

You are eligible to convert your SGLI to VGLI provided you apply within one year and 120 days of separation. If you apply within 240 days of separation, you will not be required to undergo a medical exam to obtain coverage.

The maximum amount of your initial VGLI coverage cannot be more than your SGLI coverage at the time you separate. However, you can increase your VGLI coverage by $25,000 every five years until you turn 60. The maximum VGLI policy is $400,000.

You can apply for VGLI online through the Office of Servicemembers’ Group Life Insurance or by mail or fax.

VGLI costs more than SGLI. Your age and the amount of coverage determine your VGLI premium, so premiums increase every five years. For example, you would pay $84 for $400,000 of coverage at age 45, but 10 years later, at age 55, you would pay $240 per month to maintain the same amount of coverage. As long as you pay your premiums on time, VGLI will not expire.

Convert Your SGLI to a Commercial Policy

You can convert your SGLI coverage to an individual commercial policy within 120 days of separation without undergoing a medical exam to obtain coverage. However, few insurers offer a direct conversion from SGLI to individual policies, and costs vary.

This option is also available to military spouses who were covered under FSGLI, unlike VGLI and SGLI disability extensions.

Purchase Coverage from Another Insurer

You are not required to continue your life insurance coverage through one of the above options or maintain coverage at all. If you are beginning a second career, your new employer may offer you life insurance coverage while you work with them. Or, you can shop around for another policy.

Navy Mutual offers a permanent life insurance alternative to recently separated service members and their families who were covered by SGLI or FSGLI while in service. You don’t have to undergo a medical exam or underwriter review if you apply within 120 days of separation.

Navy Mutual representatives can help you determine which of their products will give your family the best protection. Schedule a consultation or get a quote online to discuss Navy Mutual’s available term and permanent life insurance policy options.

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