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What is Service Members Group Life Insurance (SGLI)?
What is SGLI? SGLI is a program that provides low-cost term life insurance coverage to eligible Service members. If eligible, service members are automatically issued the maximum SGLI coverage. If service members qualify for SGLI, service members are automatically enrolled and do not need to apply for coverage.
Service members can make changes to their SGLI coverage. For example, Service members can decline SGLI coverage, select a lesser amount than maximum coverage, designate beneficiaries, and/or make other changes.
What is SGLI?
Service members are automatically insured under full-time SGLI if they are one of the following:
• Active duty member of the Army, Navy, Air Force, Marines, or Coast Guard
• Commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS)
• Cadet or midshipman of the U.S. military academies
• Member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises
• Member of the Ready Reserve or National Guard and are scheduled to perform at least 12 periods of inactive training per year
• Service member who volunteers for a mobilization category in the Individual Ready Reserve (IRR)
SGLI coverage is available in $50,000 increments up to the maximum of $400,000. Covered members receive 120 days of free coverage from their date of separation. Coverage can be extended for up to two years if the Service member is totally disabled at separation. Part-time coverage is also provided to Reserve members who do not qualify for full-time coverage (members covered part-time do not receive 120 days of free coverage).
If service members are totally disabled at the time of separation (unable to work), they can apply for the SGLI Disability Extension, which provides free coverage for up to two years from the date of separation. At the end of the extension period, service members automatically become eligible for VGLI, subject to premium payments.
For a service member to assess if there is enough coverage in place, a needs calculator can be found. Ready Reserve or National Guard Members in Non-Pay Status Service members are generally still covered by SGLI if service members are a member of the Ready Reserve or National Guard and are:
• scheduled to perform at least 12 periods of inactive training per year, AND
• are drilling for points, rather than pay.
SGLI premium rates are the same as those drilling for pay. However, each branch of service handles payment of premiums during this non-pay period differently.
If service members have SGLI coverage, service members pay a monthly premium that is automatically deducted from service member’s base pay. The current basic SGLI premium rate is 7 cents per $1,000 of insurance. The premium includes an additional $1.00 per month for Traumatic Injury Protection coverage (TSGLI).
Converting SGLI to VGLI
Service members must apply to convert SGLI to VGLI within one year and 120 days from discharge. Veterans who submit their application within 240 days of discharge do not need to submit evidence of good health, while those who apply more than 240 days after discharge are required to answer questions about their health. Learn more about VGLI. (This is expensive) We advise you to shop for a low cost term life insurance policy.
Converting SGLI to a Commercial Policy
Service members covered under the SGLI program have the option to convert their SGLI coverage to an individual policy of insurance within 120 days from the date of separation from the military. Learn more about converting to a commercial policy. This conversion is an expensive option. The only time this would be beneficial is if you or your spouse would not be able to get reasonably priced fully under-written life insurance coverage. The conversion means you will convert the SGLI term insurance to a whole life policy. (This is expensive) We discussed this in a previous article here.
Making Changes to SGLI Coverage
If service members qualify as eligible for SGLI, service members are automatically enrolled and do not need to apply for coverage. However, to designate beneficiaries, or to reduce, decline, or restore SGLI coverage, service members must complete and submit the SGLI form SGLV 8286, Service members' Group Life Insurance Election and Certificate. Service members should contact their Personnel Office for any changes to Basic SGLI or Family SGLI coverage.
SGLI insurance and the death gratuity can get paid out up to 120 days after you separate from the service.
Your service member’s DD 93 Form has the wishes of when and how to notify the family. The hours of notification are 5 am until midnight unless there are other hours indicated on the DD 93.
Make sure your service member’s DD 93 is accurate, so the military knows who to notify and when. Check the backside as well. The death gratuity of $100,000 is paid immediately. This payment will go to the named person on the back of the form. Check for names of ex-wives and parents instead of the current spouse (or whoever the service member wishes).
Again, the accuracy of your service member’s DD 93 is so important. You will not get the life insurance death benefit, even if you are married to the service member who passed away if it has not been updated to reflect a current marriage. Only the person or people listed on the SGLI form as the beneficiary will receive the death benefit. If you are a spouse and are not on the SGLI form as the beneficiary, you should have the opportunity to sign a notification document of a non-traditional selection that you are not listed as the beneficiary. This is also the case if you are listed as a partial beneficiary.