Life Insurance Options for Veterans

The U.S. Department of Veteran Affairs (VA) offers several insurance programs to service members during and after their time of service.

Overall, each type of life insurance plan has its own eligibility requirements and application process. For instance, coverage details depend on the veteran’s age, medical status and specific needs. While certain VA programs may waive monthly premiums for eligible applicants, other programs increase monthly premiums every few years. As such, veterans’ life insurance plans can vary significantly depending on each applicants and program.

Servicemembers’ Group Life Insurance (SGLI)

Because VA plans have such different specifications, veterans must look for a life insurance policy that caters to their specific needs. Through the Mortgage Life Insurance and the Service-Disabled Veterans Life Insurance programs, disabled veterans who incurred injuries during their time serving the country can obtain proper financial security. In addition, some life insurance policies extend coverage to spouses and dependent children of veterans. For details on the life insurance programs available to veterans, review the sections below.

The VA’s Servicemember Group Life Insurance (SGLI) program provides coverage to service members at a low cost. In most cases, the program automatically enrolls qualified members. However, service members are able to decline coverage or make changes based on their needs. In order to qualify, service members must meet one of the following qualifications established by the Veteran Affairs department:

  • Be on active duty in the Army, Navy, Air Forces, Marines or Coast Guard.
  • Be in the U.S. military academies as a midshipman or cadet.
  • Be a member of the National Oceanic and Atmospheric Administration (NOAA) or U.S. Public Health Service (USPHS).
  • Be a volunteer for a mobilization category in the Individual Ready Reserve (IRR).
  • Be in the Reserve Officers Training Corps (ROTC) as a cadet, member or midshipman who participated in authorized training and practice cruises.
  • Be scheduled to perform at 12 periods of inactive training annually as a member of the Ready Reserve or National Guard.

This type of life insurance policy offers free coverage to eligible service members for 120 days from the date of their separation. Moreover, it can be extended for two years if the veteran is disabled at the time of the separation. As a general rule, the maximum coverage amount for this plan is $400,000, and the VA department supplies it in increments of $50,000. As for the monthly premium costs, the Veteran Affairs office deducts the amount from service members’ base pay at a rate of 7 cents per $1,000. For those who want to obtain additional coverage for traumatic injuries, it will cost an extra $1 per month.

Within the Servicemember Group Life Insurance program, there is a subprogram that offers coverage to the families of service members. The coverage amount is up to $100,000 for spouses and $10,000 for dependent children. Furthermore, there are different application procedures for this VA life insurance plan, which depend on each applicant’s military branch. As such, it is important to review all of the application methods and requirements before submitting a request for coverage.

Veterans Group Life Insurance (VGLI)

Once service members have left the service honorably, they become eligible for the Veterans Group Life Insurance (VGLI) program. This program provides coverage for as long as veterans pay the required monthly premiums. The coverage amount is the same as what veterans had while in the SGLI program. However, veterans can upgrade it every five years until they reach 60 years of age for a maximum coverage amount of $400,000. In order to decide how much life insurance you may need, the Veteran Affairs provides a calculator on their website that guides veterans in choosing the best plan. The VA also offers a questionnaire to compare the VA life insurance programs against private insurance companies.

In order to be eligible for this type of life insurance policy, veterans must meet a set of requirements set by the VA regarding their release from active duty, as well as current assignment status. It is important to note that veterans must apply for this program within one year and four months of discharge in order to qualify. Otherwise, they will subject to answering questions surrounding their health and medical history, which is not part of the list of standard requirements.

As for premium costs, the Veterans Affairs department has established an age criteria. For instance, veterans between 40 and 44 years of age can expect to pay $68 for a life insurance policy with a $400,000 coverage amount. Conversely, veterans who are 75 years of age or older may pay $1,840 for the same coverage. In any case, veterans can apply online, via mail or through the VA portal.

Service-Disabled Veterans Life Insurance (S-DVI)

The VA department has offered insurance policies for disabled veterans who have a service-related injury since the mid-1950s. To qualify, veterans must meet the following conditions:

  • In good health aside from a service-related condition.
  • Rated for a disability linked to service.
  • Honorably released from active duty after April 25, 1951.

The premium rates for the disabled veterans life insurance program vary based on age and plan specifics. Overall, these plans tend to increase every few years, and are typically higher for older veterans. In some cases, such as total disability, the VA will waive premiums altogether and make veterans eligible for an additional coverage amount of up to $30,000.

Veterans Mortgage Life Insurance (VMLI)

For severely disabled veterans, the VA offers mortgage insurance to help their families pay the home mortgage in the event of their death. This life insurance program provides coverage of up to $200,000 and includes construction loans, refinanced mortgages and second mortgages. It is not available, however, for home equity lines of credit and reverse mortgages. For this type of insurance, there is no need to name a beneficiary, as the coverage amount is only payable to the mortgage lender.

It is important to note that the mortgage life insurance policy can extend to cover a new home if a veteran sells his or her home after obtaining the insurance plan. However, the coverage ends if the veteran loses the title to the home or if the mortgage is paid in full. When it comes to premiums, the Department of Veteran Affairs considers several factors such as age, mortgage length and any outstanding balances on the mortgage. Furthermore, veterans must apply before reaching 70 years of age and meet additional requirements regarding their home mortgage.

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