As a veteran or active-duty service member, you have access to unique benefits and opportunities, including VA life insurance. This type of coverage is designed to provide financial security and peace of mind for you and your loved ones. In this article, we will explore the different options available for VA life insurance, the benefits and drawbacks of each plan, and how to choose the best one for your needs.
What is VA Life Insurance?
VA life insurance is a type of policy that is available exclusively to veterans, active-duty service members, and their families. It is designed to provide financial protection and support in the event of the insured’s death. There are several different types of VA life insurance, each with its own unique features and benefits.
Types of VA Life Insurance
There are currently four different types of VA life insurance available to veterans and service members:
Type |
Description |
|---|---|
Servicemembers’ Group Life Insurance (SGLI) |
Term life insurance coverage available to active-duty service members. |
Veterans’ Group Life Insurance (VGLI) |
Term life insurance coverage available to veterans who previously had SGLI coverage. |
Family Servicemembers’ Group Life Insurance (FSGLI) |
Term life insurance coverage available to spouses and dependent children of active-duty service members. |
Service-Disabled Veterans’ Insurance (S-DVI) |
Permanent life insurance coverage available to veterans who have a service-connected disability. |
Each of these policies has its own unique features and benefits, which we will explore in more detail below.
Servicemembers’ Group Life Insurance (SGLI)
SGLI is a term life insurance policy that is available to all active-duty service members, as well as members of the National Guard and Reserve who are scheduled to perform at least 12 periods of inactive training per year. The policy provides coverage in increments of $50,000, up to a maximum of $400,000. The cost of the policy is deducted from the service member’s pay on a monthly basis.
Benefits of SGLI
SGLI provides several benefits to service members and their families:
- Low premiums: SGLI is one of the most affordable life insurance options available, with premiums as low as $29 per month for the maximum coverage amount of $400,000.
- No medical exam required: Service members do not need to undergo a medical exam in order to qualify for SGLI coverage.
- No exclusions for combat: SGLI coverage is not dependent on whether the service member dies in combat or in a non-combat situation.
Drawbacks of SGLI
While SGLI has many benefits, there are also some drawbacks to consider:
- Term coverage only: SGLI is a term life insurance policy, which means it only provides coverage for a specified period of time. Once the term expires, the policyholder is no longer covered.
- Cost increases with age: As service members get older, the cost of SGLI coverage increases. At age 35, the monthly premium for the maximum coverage amount is $52, and at age 45, it is $96.
- No cash value: SGLI does not accumulate cash value over time, which means that the policyholder cannot borrow against it or use it as an investment vehicle.
Veterans’ Group Life Insurance (VGLI)
VGLI is a term life insurance policy that is available to veterans who previously had SGLI coverage. The policy provides coverage in increments of $10,000, up to a maximum of the amount of SGLI coverage the veteran had when they left the service. The cost of the policy is based on the veteran’s age and the amount of coverage they choose.
Benefits of VGLI
VGLI provides several benefits to veterans:
- Guaranteed acceptance: Veterans who apply for VGLI within one year and 120 days of leaving the service are guaranteed acceptance, regardless of their health or medical history.
- Portable coverage: VGLI can be continued even if the veteran leaves the military, changes jobs, or moves to a different state.
- No medical exam required: Veterans do not need to undergo a medical exam in order to qualify for VGLI coverage.
Drawbacks of VGLI
While VGLI has many benefits, there are also some drawbacks to consider:
- Cost increases with age: Like SGLI, the cost of VGLI coverage increases as the veteran gets older. At age 35, the monthly premium for $400,000 of coverage is $32, and at age 45, it is $80.
- Term coverage only: VGLI is a term life insurance policy, which means it only provides coverage for a specified period of time. Once the term expires, the policyholder is no longer covered.
- No cash value: VGLI does not accumulate cash value over time, which means that the policyholder cannot borrow against it or use it as an investment vehicle.
Family Servicemembers’ Group Life Insurance (FSGLI)
FSGLI is a term life insurance policy that is available to spouses and dependent children of active-duty service members. The service member must be covered by SGLI in order for their family members to be eligible for FSGLI. The policy provides coverage in increments of $10,000 for spouses and $5,000 for dependent children, up to a maximum of $100,000 for spouses and $10,000 for dependent children. The cost of the policy is based on the age of the spouse and the amount of coverage chosen.
Benefits of FSGLI
FSGLI provides several benefits to service members and their families:
- Low premiums: FSGLI is one of the most affordable life insurance options available for spouses and children of service members. The monthly premium for $100,000 of coverage for a spouse is $5, and for $10,000 of coverage for a child, it is $0.50.
- No medical exam required: Spouses and children do not need to undergo a medical exam in order to qualify for FSGLI coverage.
- No exclusions for combat: FSGLI coverage is not dependent on whether the service member dies in combat or in a non-combat situation.
Drawbacks of FSGLI
While FSGLI has many benefits, there are also some drawbacks to consider:
- Low coverage amounts: The maximum coverage amount for spouses is $100,000, which may not be enough to meet all of their financial needs in the event of the service member’s death.
- Term coverage only: FSGLI is a term life insurance policy, which means it only provides coverage for a specified period of time. Once the term expires, the policyholder is no longer covered.
- No cash value: FSGLI does not accumulate cash value over time, which means that the policyholder cannot borrow against it or use it as an investment vehicle.
Service-Disabled Veterans’ Insurance (S-DVI)
S-DVI is a permanent life insurance policy that is available to veterans who have a service-connected disability. The policy provides coverage in increments of $10,000, up to a maximum of $10,000. The cost of the policy is based on the veteran’s age, the amount of coverage they choose, and the severity of their disability.
Benefits of S-DVI
S-DVI provides several benefits to veterans:
- Permanent coverage: S-DVI is a permanent life insurance policy, which means that the policyholder is covered for the rest of their life as long as they continue to pay the premiums.
- No medical exam required: Veterans do not need to undergo a medical exam in order to qualify for S-DVI coverage.
- Cash value: S-DVI accumulates cash value over time, which means that the policyholder can borrow against it or use it as an investment vehicle.
Drawbacks of S-DVI
While S-DVI has many benefits, there are also some drawbacks to consider:
- Low coverage amounts: The maximum coverage amount for S-DVI is $10,000, which may not be enough to meet all of the policyholder’s financial needs in the event of their death.
- Costs vary: The cost of S-DVI coverage varies based on the veteran’s age, disability rating, and the amount of coverage they choose.
- Not available to all veterans: S-DVI is only available to veterans who have a service-connected disability.
Choosing the Right VA Life Insurance Plan
Choosing the right VA life insurance plan can be a difficult decision, as each type of coverage has its own pros and cons. Here are some factors to consider when making your decision:
- Age: If you are younger, term life insurance may be a more affordable option. If you are older, permanent life insurance may be a better choice.
- Health: If you have health issues, you may be better off choosing a policy that does not require a medical exam.
- Financial needs: Consider how much coverage you need to protect your family’s financial future in the event of your death.
FAQ
Can I have more than one VA life insurance policy?
Yes, you can have multiple VA life insurance policies. However, keep in mind that the total coverage amount cannot exceed certain limits, depending on the type of policy you have.
Can my spouse and children be covered under my SGLI policy?
No, SGLI only provides coverage for the service member. However, your spouse and children may be eligible for FSGLI coverage.
Can I convert my SGLI policy to VGLI?
Yes, you can convert your SGLI policy to VGLI within one year and 120 days of leaving the service. However, keep in mind that the cost of VGLI coverage may be higher than SGLI, especially if you are older.
Can I borrow against my S-DVI policy?
Yes, you can borrow against the cash value of your S-DVI policy. However, keep in mind that borrowing against your policy will decrease the death benefit your beneficiaries will receive in the event of your death.
If you stop paying your VA life insurance premiums, your coverage will terminate. However, you may be able to reinstate your coverage if you pay the past-due premiums and meet certain requirements.
VA life insurance can provide valuable financial protection and peace of mind for service members and their families. By understanding the different types of policies available and the pros and cons of each, you can make an informed decision about which one is best for your needs.