Veterans’ Group Life Insurance
Veterans’ Group Life Insurance (VGLI) is the life insurance that can replace Servicemembers’ Group Life Insurance (SGLI) when Servicemembers leave the Service. Enrolling in VGLI is voluntary.
Members normally hear about VGLI as a part of transition classes. Here are some specifics of the program for members nearing separation or retirement. If you already have VGLI, we’ll refresh your memory on details worth repeating.
The eligibility window to apply for VGLI is within the first 16 months after Service. VGLI will accept you without a health screening if you apply within the first 240 days of the end of your service. This is an important application detail to consider if you are leaving the Service with health issues.
Life insurance is a critical part of a family’s financial plan. Commercial life insurance requires a health screening before approving you for life insurance. For someone who suffers with illnesses or disabilities as a result of service, VGLI could be your only access to life insurance coverage if you apply in the first 240 days.
Usually, going commercial life insurance is your best option because you can find a policy with a higher death benefit and a smaller premium than VGLI. I’m thinking of term insurance with a level premium for an extended period of time. VGLI is also a form of term insurance but the premium increases as you get older.
However, if you have health issues, shop early for a commercial policy, find the one right for your family, and apply to see if you pass the health screening. Depending on the outcome, you will know whether a commercial policy will work or if you need to go VGLI before day 240.
VGLI monthly premiums increase every 5 years once you turn 30 years old. VGLI with a death benefit of $400,000 costs $40 at age 30 and increases to $1840 by age 75.
VGLI participants can increase coverage in $25,000 increments each 5-year period up to the maximum death benefit of $400,000 prior to age 60 without proof of good health.
There is an option to convert a VGLI policy to a commercial policy at any time—again, assuming health approval. You may prefer this option before your VGLI premiums get too expensive. See the VA pamphlet on VGLI conversion at: http://www.benefits.va.gov/INSURANCE/forms/SGL133_ed2015-06.pdf. As with anything, note the details of the option.
Eventually you may have to decide if your death benefit amount is worth the premium with VGLI. You’re covered until you stop paying premiums.