Veterans’ Group Life Insurance (VGLI)

Military service includes such benefits as low-cost life insurance through the Servicemembers’ Group Life Insurance (SGLI) program. When the time comes to end your military career, you can even convert that SGLI policy into renewable coverage through the Veterans’ Group Life Insurance program. Opting in to VGLI means you’ll continue to enjoy affordable, guaranteed coverage that doesn’t require a medical examination in order to qualify. The only stipulation is that you enroll soon after your separation date.

What Is Veterans’ Group Life Insurance?

Veterans’ Group Life Insurance (VGLI) is an insurance program that you can activate after your active-duty military career ends, allowing you to convert your Servicemember’s Group Life Insurance coverage to renewable term insurance. VGLI is one of a number of low-cost insurance options created by the Department of Veterans Affairs that ensures veterans have access to affordable coverage after their service ends.

While any newly separated servicemember is active for VGLI coverage, it is especially beneficial to veterans who might not otherwise be eligible for private insurance coverage because of risks involved in military service or service-related injuries or disabilities.

VGLI also allows the opportunity to increase coverage by $25,000 on the one-year anniversary of the policy, and once every five years thereafter, up to $500,000, until age 60. No evidence of good health is required for coverage or the incremental increases.

Who Is Eligible for Veterans’ Group Life Insurance?

Eligibility for Veterans’ Group Life Insurance is open to veterans and servicemembers who apply for the coverage with any applicable time constraints and meet at least one of the following criteria:

• Servicemembers who served on active duty for more than 30 days and were covered by the Servicemembers’ Group Life Insurance (SGLI) program
• Ready Reserves members who were covered by SGLI and are being separated or released from a drilling assignment
• Those assigned to the Individual Ready Reserve (IRR), or to the Inactive National Guard (ING). This includes members of the United States Public Health Service Inactive Reserve Corps (RC)
• Members who had part-time SGLI and who, while performing duty (or traveling directly to or from duty), suffered an injury or disability which renders them uninsurable at standard premium rates.

What Are the Benefits of VGLI?

Once enrolled in VGLI, veterans can receive between $10,000 and $500,000 in term life insurance coverage. As part of your opt-in process, you can select coverage up to the amount you had through your SGLI policy. VGLI coverage amounts can be increased by $25,000 every five years, up to $500,000, until age 60.

A VGLI policy and its options for additional coverage can be especially valuable to those who may otherwise be unable to access life insurance coverage at competitive rates, or at all, due to physical/mental injuries or disabilities incurred while on duty that would otherwise disqualify them from commercial insurance coverage.

How to Apply

Opting for Veterans’ Group Life Insurance coverage is fairly straightforward, but there is a rigid time constraint for activating the coverage. Within 60 days from your separation from service, you should receive an application form from the SGLI office. The application must be submitted within one year and 120 days from your separation date from the military. After this deadline, you will no longer be eligible for VGLI coverage.

Those who sign up within 240 days of leaving the military will not need to prove that they’re  in good health. Signing up after the 240-day period requires applicants to submit evidence that they’re in good health and also pay the first month’s premium with the application.

Applications for VGLI coverage can be submitted in one of several ways:

• Submit an application through the Office of Servicemembers Group Life Insurance (OSGLI), using the Prudential website.
• Fill out the Application for Veterans’ Group Life Insurance (SGLV 8714) and submit via mail or fax. Completed forms can be mailed to OSGLI, PO Box 41618, Philadelphia, PA 19176-9913, or faxed to 1-800-236-6142.

To reinstate a VGLI policy that has lapsed or expired, you must fill out an Application for Reinstatement of VGLI Coverage (SGLV 180).

Insurance Premiums & Coverage Amounts

Premiums for VGLI coverage are paid monthly, and rates are based on your age and the amount of insurance coverage you want.

Pros and Cons of VGLI

VGLI coverage is easy to apply for, but there may be better life insurance options available to veterans, especially as they age. Before you pay for coverage going forward, take time to review the benefits and drawbacks.

Pros

There are many advantages to VGLI coverage, including:

• Guaranteed coverage: Eligible veterans cannot be turned down for VGLI. Once your VGLI application is approved, you will receive a certificate of coverage and billing will start on a monthly basis.
• Commercial life insurance policies typically require a health screening, lab tests and medical exams. If you enroll within 240 days of your separation date, VGLI coverage waives all medical screenings regardless of age or health status. Those who apply after 240 days must submit medical evidence to prove they’re in good health.
• VGLI offers a level death benefit, meaning a payout of the policy is the same regardless of whether the insured person dies shortly after purchasing the policy or years later. The death benefit will never decrease, unless the insured party requests it, and the policy remains in force as long as premiums are paid.
• There are no membership or enrollment fees for a VGLI policy, making it similar to a group life insurance program that is offered by many private employers.

Cons

Of course, life insurance isn’t a one-size-fits-all proposition and VGLI may have some drawbacks for some individuals. Possible disadvantages  of VGLI coverage include:

• Your initial coverage is based on the coverage you had on your SGLI policy. Fortunately, you can increase your coverage beyond your original SGLI coverage amount, but you can do it only by a maximum of $25,000 every five years.
• Older veterans will pay significantly higher premiums, because VGLI rates increase significantly as one ages. In fact, rates for older veterans may be high when compared with rates for standard level term life policies. VGLI rates for younger veterans, however, are actually quite affordable.
• VGLI does not offer a permanent policy option, meaning the policy has a death benefit but does not offer a separate savings component that can be accessed while you’re still alive.
• VGLI’s $500,000 cap on death benefits is relatively low. In fact, the average for commercial policies is $500,000. If you want or need coverage above $500,000, you’ll need to purchase additional insurance coverage.

Converting a VGLI Policy Into a Commercial Insurance Policy

Another enticing aspect of VGLI coverage is the ability to convert the policy into a commercial (civilian) policy at any time. Those who select this option are able to convert at standard premium rates without having to provide proof that you’re in good health. The VA offers a list of participating providers. Once you find a provider, you should apply at the company’s nearest sales office. You’ll need a letter – called a VGLI Conversion Notice — from the Office of Servicemembers’ Group Life Insurance (OSGLI) confirming that you have VGLI coverage.

Helpful Resources for VGLI

VGLI coverage is an important and valuable benefit to consider as you transfer out of the military and into the civilian world. For a better understanding of all your insurance options, check out the Servicemembers’ and Veterans’ Group Life Insurance Handbook. Further information on eligibility requirements, rates and more can be found through the Department of Veterans Affairs.

Conclusion

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