Due to the nature of their calling, military members have special needs concerning their finances and estate planning. One notable area is concerning how much life insurance military members need.
Military members can purchase inexpensive term life insurance coverage through Servicemembers Group Life Insurance (SGLI), which is easy to obtain and inexpensive to maintain while they are in the military. But when military members separate from military service, their life insurance needs may change. One option available to military veterans is Veterans’ Group Life Insurance (VGLI).
What is Veterans’ Group Life Insurance (VGLI)
Veterans’ Group Life Insurance (VGLI), is a life insurance program that was designed to allow service members to convert their SGLI coverage to a renewable term life insurance policy.
Eligible members with full-time SGLI coverage are eligible for Veterans’ Group Life Insurance upon their release from the service. However, you can only purchase a VGLI policy up to the amount of your SGLI policy before you separated from the military. So be sure to review your needs prior to separating from the military.
You can only apply for a VGLI policy if you had an SGLI policy when you separated from the military.
You can also only apply for VGLI if you are within 1 year and 120 days of separating from the military under any of the following events:
- Release from active duty or active duty for training under a call or order to duty that does not specify a period of less than 31 days.
- Separation, retirement or release from assignment from the Ready Reserves/National Guard.
- Assignment to the Individual Ready Reserves (IRR) of a branch of service or to the Inactive National Guard (ING).This includes members of the United States Public Health Service Inactive Reserve Corps (IRC).
- Placement on the Temporary Disability Retirement List (TDRL)
How Much Coverage Can I Get with VGLI?
The Veterans’ Group Life Insurance (VGLI) coverage is available in increments of $10,000 up to a maximum of $400,000. A service member’s Veterans’ Group Life Insurance coverage cannot exceed the amount of SGLI they had in force at the time of their separation from the service. This last statement is an important factor to consider before leaving the military.
Once enrolled in VGLI, you will have the opportunity to increase your coverage by $25,000 on your one-year anniversary and once every five years thereafter, up to the legislated maximum of $400,000, until age 60.
No proof of good health is required.
How Much Are VGLI Premiums?
The life insurance premium rates for VGLI are based on your age and not your medical history. The Veterans’ Group Life Insurance rates are the same for men and women.
Premiums aren’t increased for smokers and you’ll not be excluded for mental health reasons, or for other reasons, such as Post Traumatic Stress Disorder (PSTD), a Traumatic Brain Injury (TBI), or other illnesses or injuries that occurred while you were serving in the military.
Your coverage will remain the same unless you stop payments or request a change in coverages. However, your premiums will increase as your age increases.
As mentioned above VGLI policies are available in $10,000 increments, and are based on age.
For space reasons, we have limited the list to show sample rates. The following table shows an abbreviated listing of the VGLI Premiums, using the minimum $10,000 policy, followed by policies in increments of $50,000. You can find the full table on the VA website.
|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|
VGLI Application Process & Timeline
Veterans must apply for a VGLI policy within 1 year and 120 days from your date of separation from the military under the qualifying events listed above.
With no enrollment or membership fees, your full Veterans’ Group Life Insurance coverage amount is effective as soon as you’re approved and your first premium has been paid.
VGLI Life Insurance Physical Requirements
A physical isn’t required to apply for Veterans’ Group Life Insurance if the veteran applies for a VGLI policy within 240 days from their military separation date.
Veterans applying for coverage after the 240 day time period will be required to submit evidence of good health before their VGLI application will be approved.
Note: You should apply for VGLI right after separating from the military if you have any conditions that may be considered uninsurable health conditions. Some of these conditions may make it prohibitively expensive or even impossible to obtain a commercial life insurance policy. And some conditions are also considered uninsurable by the VA.
Is VGLI a Good Deal?
Life insurance can be a complicated topic. And, unfortunately, there really is no one-size-fits-all life insurance policy that works for everyone.
So to answer this question, we first need to review your life insurance needs, then shop for the best deal. The maximum life insurance policy of SGLI or VGLI is $400,000. This may or may not be enough for your family. If it isn’t, then it may be a good idea to shop around for a civilian term-life insurance policy prior to separating from the military. This will give you the continuity of having a life insurance policy in place when you separate, plus give you a fixed-price that will last for the duration of your policy.
VGLI rates, as we have discussed, will increase as you age. This can make VGLI affordable when you are younger, but it may not be as affordable as it increasingly becomes expensive.
However, there are some benefits to VGLI that make it a good option for some veterans.
As mentioned above, these are group rates, and everyone with a VGLI policy pays the same rates (based on age), regardless of their health, gender, whether or not they smoke, and other factors. Some of these factors may make purchasing a civilian life insurance policy even more expensive than VGLI. Some health conditions may even make it impossible to buy a life insurance policy.
Should You Get a VGLI Policy?
It’s important to evaluate all of your options when considering your Group Life Insurance and determine if the Veterans’ Group Life Insurance will meet your life insurance needs and expectations. You’ll want to consider whether or not the premium will be affordable to you and fit within your personal budget.
Consider whether or not the coverage will be enough to meet your specific needs or if it is enough to supplement the other life insurance policies you may already have in place. In addition, you’ll want the life insurance coverage that has the best features for you and your family.
Again, there is no single answer that will work for everyone. However, here is how I approached this situation when I left active duty:
VGLI Decision Matrix
Step 1: Review your life insurance needs.
- If you do not need life insurance, you are good to go. You can stop here.
- If you do need life insurance, think about how much you need, and for how long.
- Most people will be better off buying a term life insurance policy that lasts anywhere from 10, 20, or 30 years.
- If you need more coverage than the maximum amount through VGLI, then you should look into buying a commercial life insurance policy as well.
Step 2: Review your health situation and the ability to purchase life insurance from a commercial company.
- If you are younger, and in good health, you will almost certainly be able to find a more affordable long-term life insurance policy somewhere else.
- You may want to consider VGLI if you have medical conditions that may make it prohibitively expensive or even impossible to purchase life insurance after leaving the military.
Step 3: Shop term life insurance policies – be sure to compare the cost and the coverage to VGLI.
- You can shop around with trusted life insurance organizations including:
- USAA Life Insurance – USAA is a trusted leader in the military financial arena.
- Navy Mutual Life Insurance – Navy Mutual is another leading provider of life insurance policies for the military community.
- Policy Genius – Policy Genius helps users shop around for excellent life insurance rates and can give you a quote and approval answer in a very short amount of time.
Step 4: Compare the rates you shopped for to the VGLI rates.
- Keep in mind that the premiums for a term life insurance policy remain the same throughout the duration of the policy.
- VGLI rates increase as you age. So if VGLI is the cheaper policy today, it may not be 5-10 years from now.
- In general, term life insurance will be less expensive than VGLI if you are in good health and do not have preexisting medical conditions or habits that may preclude obtaining a life insurance policy.
- VGLI may be a good option for those who cannot otherwise obtain a term life insurance policy.
Step 5: Make your decision and apply for your life insurance policy.
- That’s it.
- Examine your needs.
- Review your health situation and ability to purchase a life insurance policy.
- Shop around for current life insurance rates.
- Compare those to VGLI.
- Decide and apply.
What did I do? I compared my options and I bought a 30-year term life insurance policy. I was able to buy a policy with a much higher coverage amount than I could get from VGLI, and the rates were very affordable. I was also still young (under the age of 30), and in good health. So that was the best solution for my needs.
Remember, each situation is unique, so you will want to review your needs against the Decision Matrix above.
Additional Veteran’s Group Life Insurance information
A full-service website provides you with all the information you need to make an informed decision about your Veteran’s Group Life Insurance at your fingertips. For more information, you can review their website at http://www.insurance.va.gov/sgliSite/VGLI/VGLI.htm