Deployments, permanent changes of station and other military events teach service members to plan for the unexpected.
You may feel like you’re leaving these behind when you transition out of the military, but civilian life can also be full of surprises. Knowing you have the right life insurance policy in place can give you confidence and peace of mind as you begin the next chapter of your life.
Here’s what you need to know about life insurance for veterans.
Service members can depend on military group life insurance during and after their time in service. When you entered the military, you automatically received Servicemembers’ Group Life Insurance. SGLI provides up to $400,000 of low-cost life insurance coverage for the duration of your military service.
Upon separation, veterans can sign up for Veterans’ Group Life Insurance (VGLI). Like SGLI, VGLI provides up to $400,000 of coverage to separated service members. However, your VGLI coverage amount is tied to the amount of SGLI coverage you paid for while on active duty. So, if you had $200,000 of SGLI coverage when you left the military, you’ll receive a corresponding amount when you apply for VGLI.
But, you can increase your VGLI coverage by $25,000 every five years until you turn 60, as long as you don’t exceed the $400,000 coverage limit.
Your VGLI premiums will go up as you purchase more coverage. Additionally, younger veterans pay less than older veterans with VGLI coverage. Your premiums will increase every five years as you age. So, while a 30-year-old may pay $36 per month for $400,000 of life insurance coverage, a 40-year-old may pay $64 per month, and a 50-year-old may pay $132 per month for the same amount of coverage.
If you apply for VGLI coverage within 240 days of separating from the military, you won’t have to prove that you are in good health to receive coverage.
You must undergo a medical exam to prove your good health if you apply for coverage between 240 and 485 days of leaving the military. You’ll lose your VGLI coverage eligibility if you wait longer than that to apply.
Navy Mutual offers up to $400,000 of permanent, guaranteed issue life insurance to veterans who are within 120 days of separation. If you had SGLI while in service, you won’t need a medical exam or an underwriter review. Additionally, spouses covered under the Family SGLI (FSGLI) program may be eligible for up to $100,000 of coverage without an exam. Children under age 21 may also receive a $10,000 family benefit rider.
If you have a Department of Veterans Affairs rating for a service-connected disability, you may be eligible for up to $10,000 of Service-Disabled Veterans Life Insurance (S-DVI) coverage. If you’re unable to work due to a service-connected disability, you may be eligible for a $30,000 coverage supplement.
You must apply for S-DVI within two years of obtaining a VA disability rating.
However, enrollment in S-DVI permanently ends on Dec. 31, 2022. Veterans Affairs Life Insurance, known as VALife, will replace it.
VA Life insurance provides up to $40,000 in guaranteed whole life insurance coverage to veterans with service-connected disability ratings. Coverage is available in increments of $10,000, and you don’t have to prove you’re in good health to enroll.
Full VALife coverage becomes effective two years after enrollment. If you die before the two-year period ends, your beneficiary will only receive the amount you have paid in premiums, plus interest.
Once your coverage becomes effective, it will begin to build cash value. A VALife policy will remain in effect for the rest of your life.
Calculating Your Life Insurance Needs
Online life insurance calculators can help you determine the right amount of coverage to protect your family.
These calculators can estimate the amount of coverage you’ll need based on your annual income, your family’s long-term needs and their immediate cash needs after your death, such as mortgage payments, debts, final expenses and burial expenses. They may also account for available financial resources that can offset some life insurance needs.
If you’d rather work with an expert, consult a financial planner or a life insurance representative to review your assets, debts and financial goals and obtain an estimate.
When estimating your life insurance needs, consider these questions:
- How much money would your family need to maintain their standard of living?
- What investments could they rely on? Do you have any market investments? How much money is in your savings account? Do you have other life insurance policies, perhaps through your employer?
- Is your spouse a stay-at-home parent? Consider the estimated costs required to employ a full-time caregiver for your kids if your spouse needs to return to the workforce.
- Have you considered additional expenses? It’s hard to predict additional expenses such as final medical bills, funeral costs and college expenses, but try to factor in your best estimates.
Once you know how much coverage will ensure the financial security of your family, you can determine which product would provide the best protection.
Navy Mutual Is Here to Help
If you are transitioning out of the military, it is important to determine how you will replace your SGLI coverage, whether that’s through the VA or a private company. Navy Mutual is a nonprofit life insurer that has served current and former service members and their families for over 140 years. We promise to protect your family in your absence.