- Life insurance for servicemembers becomes more affordable
- March 24, 2014
Individuals whose hobbies or careers put them in harm’s way, like servicemembers, may want to invest in a life insurance policy to protect their loved ones.
Such insurance just became more affordable for those serving in the military thanks to the Department of Veterans Affairs, or VA. Servicemember’s Group Life Insurance, or SGLI, is a program of low-cost group life insurance for service men and women.
In addition to active service members, SGLI is available to Ready Reservists, members of the Coast Guard, commissioned members of the National Oceanic and Atmospheric Administration and the Public Health Service, cadets and midshipmen of the four military academics and members of the Reserve Officer training Corps.
This coverage may be used to cover the spouse or children of an individual during and after their active service. SGLI coverage is available in increments of $50,000 to a maximum of $400,000. According to a recent press release, SGLI premiums are currently 6.5 cents per $1,000 of insurance, regardless of the member’s age.
In fact, the VA provides a premium rate table that you can use to plan your insurance coverage. Unlike most civilian life insurance policies, SGLI premiums do not vary by age, sexual orientation, health status, or tobacco use.
“Without insurance protection, life after the loss of a spouse can be not only challenging emotionally, but can also place a severe financial strain on a family,” VA Secretary Eric Shinseki said.
Veterans who wish to convert their SGLI policy to a Veterans Group Life Insurance policy must submit their application within one year and 120 days from discharge. Those who submit their application within 240 days of discharge do not need to submit evidence of good health, which is a major advantage.
Service members also have the option to convert their SGLI policy into an individual insurance policy after military discharge. Applications must be submitted within 120 days.
While the premiums for SGLI insurance have gone down over time, private market insurance may reflect the likeliness that policyholders will cash out. These rates can increase for those who pursue dangerous hobbies or suffer poor health.
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