Life Insurance for Veterans | You Have Choices!

 

Life insurance for veterans may be more affordable than you thought. Keep reading to discover your options as you approach retirement.

Servicemembers who are on active duty are given access to affordable life insurance benefits from Servicemembers’ Group Life Insurance (SGLI), which is the Military’s group life insurance program for military service members and their families.

When the time comes to transition from active duty, service members can convert their SGLI term life insurance to a VGLI policy through the Veterans Group Life Insurance program.

 

Easy Article Navigation

• What is Veterans Group Life Insurance?
• What is Service-Disabled Veterans Life Insurance
• What are My S-DVI Options?
• How to Apply for Service-Disabled Veterans Life Insurance

 

However, many veterans discover that there may be better options by taking advantage of life insurance products available through private insurance companies rather than accepting what the VA has to offer.

In this article, we’ll discuss what life insurance products the VA has for veterans and determine whether there is a better or more affordable solution through the private insurance marketplace.

 

What is Veterans Group Life Insurance (VGLI)?

Veterans can convert their SGLI policy to VGLI when they leave the military. Similar to SGLI, VGLI is under the supervision of the VA and administered by the Office of Servicemembers' Group Life Insurance.

VGLI coverage starts at $10,000 and goes up to $400,000. But, the VGLI coverage amount can't be more than what SGLI coverage was when a service member left the military.

Upon leaving active duty, you have 120 days to convert your SGLI policy to a VGLI plan. If you apply for conversion within 120 days of discharge, you won’t need to fill out a health questionnaire. After this period, veterans will need to fill out a health questionnaire. Thus no veteran can apply for a VGLI policy after 485 days of discharge.

If you convert your SGLI policy, the VGLI policy will be valued at the same amount. However, if you lowered your SGLI death benefit and want more coverage, you can increase the death benefit of your VGLI policy by $25,000 at five-year intervals up to $400,000 or until you turn age 60, whichever happens first.

What is Service-Disabled Veterans Life Insurance (S-DVI)?

 

Service-Disabled Veterans Life Insurance is a life insurance program designed for disabled veterans. It is similar to the Servicemembers’ Group Life Insurance program except it was specifically designed to benefit American veterans with disabilities.

Although an S-DVI policy is not available to veterans through the private insurance marketplace, veterans who have less severe or partial disabilities may qualify for private insurance that will likely be more affordable and offer better coverage.

 

Eligibility Requirements for Service-Disabled Veterans Life Insurance (S-DVI)

Veterans looking to qualify for S-DVI must meet all four of the following:

1. The applicant has been rated for a service-connected disability by the Veterans Administration
2. The applicant must be healthy except for service-connected conditions
3.  The veteran must have been released from active duty with honorable or other approved conditions on April 25, 1951, or later.
4. The applicant's application was submitted within 2 years from the date the service-connected disability was granted by the Veterans’ Administration.

If an applicant’s service-connected disability was confirmed by the VA more than 2 years ago, the applicant will not qualify for Service-Disabled Veterans Life Insurance.

Although The Disabled Veterans Life Insurance Act of 2017 was introduced in congress and would extend the filing and enrollment date from 2 years to 10 years after confirmation, it has not been passed.

 

What are My S-DVI Options?

The death benefit options for S-DVI life insurance policies allow a maximum of $10,000 and up to $30,000 for supplemental coverage.

Additionally, the Veterans Administration offers 9 policy options to help veterans customize their coverage. The optional life products are term life insurance and permanent life insurance which will include a cash-value component.

The Options for S-DVI are listed below:

 

Plan	Cash Component?	Premiums	Other Features
5-Year Renewable Term	None	Increase at each 5-year renewal	Automatic renewal with a conversion option
Modified Life at Age 65	Yes	Level	Eligible if less than 61. Coverage reduced 50% before age 65.
Modified Life at Age 70	Yes	Level	Eligible under age 70 and coverage reduced 50% before age 70
Ordinary Whole Life	Yes	Level for a lifetime	Level death benefit
20-Pay Whole Life	Yes	Level for 20 years	Paid up at year 20
30-Pay Whole Life	Yes	Level for 30 years	Paid up at year 30
20-year endowment	Yes	Level premiums for 20-years	Net death benefit paid at year 20
Endowment at age 60	Yes	Level Premiums to age 60	Net death benefit paid to insured at age 60
Endowment at age 65	Yes	Level Premiums to age 65	Net death benefit paid to insured at age 65

Information retrieved from Veterans Benefits Administration.

 

How to Apply for Service-Disabled Veterans Life Insurance

Before you decide to apply for S-DVI coverage, the VA will encourage you to be a smart shopper and compare their premium rates to a few other insurance companies. After all, life insurance is an important decision and you should get the best deal possible for your money. If your disability is not serious, a commercial company may be able to offer you a better deal. Compare their premium rates to the Government Life Insurance rates.

Another factor to consider is the total disability feature added to the Department of VA policies. This feature provides that if you become totally disabled due to your service-connected disability before your 65th birthday, and your disability prevents you from working for 6 months or more, you will not have to pay premiums on your Government Life Insurance policy. Most commercial life insurance companies add an additional charge for this benefit.

Disabled Veterans can apply for S-DVI online by visiting the VA Insurance website at www.insurance.va.gov and clicking on "Apply for Service-Disabled Life Insurance Online.".This will guide you through the application online so you can send it to the VA Insurance Center electronically. Or, review the VA pamphlet 29-9 located on the VA Insurance website at  www.benefits.va.gov/insurance to select an insurance plan and complete the application and return it to: 

VAIC (RH) P.O. BOX 7208 PHILADELPHIA, PA 19101 

 

More Options in Early 2023

The VA recently announced that a Guaranteed Issue Whole Life Insurance policy will be available in January 2023.

Guaranteed Issue Whole Life Insurance can be a great fit for veterans who do not medically qualify for life insurance. Although there is no medical underwriting and coverage is guaranteed, this type of life insurance policy will contain the same guaranteed benefits found in traditional whole life insurance.

• Your policy cannot be canceled for any reason other than non-payment.
• Your premiums can never be increased by the insurance company. Even if you are diagnosed with a terminal illness or have to live in a nursing or hospice facility.
• Your policy will build cash value over time that can be accessed using policy loans or withdrawals.

 

The Bottom Line

We have found over the years while helping service members and veterans that we can typically offer significant savings with a private life insurance policy versus what the VA has to offer. The savings can be dramatic if you are a seasoned service member, veteran, or disabled veteran. Life insurance for veterans doesn't have to be difficult to find or expensive when you find it.