30 Jun Do Veterans Automatically Get Life Insurance? Debunking Myths About Coverage
Military members are automatically enrolled in SGLI, which offers $400,000 in coverage for a $25 monthly premium deducted from their base pay. SGLI coverage ends when your military service ends. Alternatively, government and private plans have provisions designed to provide benefits to retired or separated employees who may have difficulty obtaining standard coverage.
Let’s examine how veterans’ life insurance works and the options available so you can choose the right policy for you and your family.
What Is SGLI?
The SGLI (Servicemembers’ Group Life Insurance) provides term life insurance at a reduced cost to uniformed service personnel.
The Department of Veterans Affairs (VA) obtained a group life insurance policy from a commercial life insurance firm. You can receive SGLI coverage in increments of $50,000 to a maximum of $400,000. Servicemembers are automatically insured for a maximum coverage amount of $400,000 unless they decline coverage or select a lower amount.
Following their release from duty, SGLI members have two alternatives. They can either change their full-time SGLI coverage to VGLI or permanent insurance through one of the partnering commercial insurance companies.
How do I know if I qualify for SGLI?
The best way to find out if a veteran has life insurance is by visiting the U.S. Department of Affairs website. You should be able to access your life insurance policy online through your file number. By doing so, you will be able to learn more about your policy and make changes.
Veterans may qualify for full-time life insurance coverage, while others may only be eligible for part-time coverage. The premium rate you pay for your life insurance plan will vary depending on the coverage level. A portion of your base pay will be automatically deducted from your SGLI plan. You can speak with your unit leader for more information.
What Is VGLI?
As long as former service members and veterans pay their life insurance premiums, they can continue to be covered by Veterans’ Group Life Insurance (VGLI).
When military people leave the service, they are eligible for Veterans’ Group Life Insurance (VGLI), which allows them to keep their life insurance coverage up to the level they had with SGLI. A service member’s VGLI coverage can only be increased by $25,000 every five years, up to a maximum of $400,000, until age 60.
This is the main VA life insurance plan for separated and retired military members. The plan offers several advantages, especially for service members who suffer from a medical condition and would find other policies hard to obtain. Although the program does have a sign-up window and other restrictions, they should be considered.
What commercial insurance companies convert SGLI for veterans?
You can transfer your current SGLI or VGLI coverage to an individual policy by contacting a participating firm. While VGLI coverage can be changed anytime, SGLI coverage must be changed within 120 days after leaving service.
When switching from an individual insurance policy to an SGLI or VGLI policy, there is no requirement to disclose your medical information. Alternatively, your insurer may ask you health-related questions to determine whether you qualify for a lower rate.
Can Veterans Buy Private Insurance?
Although eligible servicemembers can purchase SGLI and VGLI life insurance, the coverage may not be sufficient to fulfill all veterans’ needs. A private insurance provider may be able to provide you with more of the advantages you want. What you’re searching for in life insurance coverage is entirely up to you.
In case you have health issues that will raise your costs, consider this option if you want private insurance. However, compared to veterans with VGLI, you have a shorter time to compare quotations for your new policy.
Best insurance agencies for veterans
Although there are various private life insurance companies to choose from, you might want to check out insurers that cater to veterans. These companies offer term and permanent coverage geared explicitly to active and former military members and their families.
Besides ratings and reviews, the best life insurance companies for veterans have a history of serving veterans and their families. Moreover, they offer numerous policies, including whole life, and have exclusions for conditions such as PTSD and mental health issues.
To help you start looking, here is a list of top insurance agencies for veterans:
Best VA Life Insurance Rates
The veteran life insurance rates vary depending on the company. Premiums are determined by several factors, such as your age, health history, coverage goals, and smoking history.
Term and whole life insurance products are priced differently by private companies. Choosing the right plan depends on your coverage needs and willingness to pay premiums.
The cost of term insurance for a 35-year-old male non-smoker will likely range between $9 and $25 per month based on his health status.
A nonsmoking 55-year-old guy with an average health score should expect to pay between $39 and $86 per month for the same $150,000 policy.
Veterans Life Insurance Death Benefits
Veterans who die within 120 days of their release are eligible for a $1l00,000 tax-free death payout to help with final expenditures and grief.
Your beneficiaries are paid the death benefit when you pass away, but it is not automatic. Insurers are not immediately notified of a policyholder’s death; a beneficiary must initiate a claim to get information.
Lump-sum payments can be made via check or direct deposit into a bank account, depending on the death claim form.
Alternatively, the death benefit can be converted into an annuity by depositing the proceeds in an investment account and paying out annual payments until the fund is depleted. Annuities may be subject to taxes. In most cases, lump-sum fees are better for budgeting, but a competent financial planner can help you choose the right option.
Active-duty personnel, families, and veterans can get low-cost term life insurance from the VA without taking a medical exam. Health status does not affect monthly premiums, so rates for military personnel, younger vets, and those in poor health may be significantly lower. A healthy older soldier leaving the military may face unreasonably high life insurance premiums and would do better to look for another alternative.
VA life insurance should be viewed as a supplemental insurance policy for those who seek extra coverage due to the low benefit maximum ($400,000). Considering whole and variable life insurance options will give you more flexible options and the ability to build up cash value over time.