Life insurance for veterans

How to protect your family after you’ve protected your country.

There are special considerations for many active-duty military personnel applying for life insurance, but veterans and soon-to-be veterans buying life insurance have unique needs as well.

Military personnel have the option of converting their Servicemembers’ Group Life Insurance (SGLI) to a Veterans’ Group Life Insurance (VGLI) policy when they leave the armed forces, but there are reasons why you might choose to purchase a policy from a private life insurance company instead.

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When does military-provided life insurance end?

All military service members are automatically enrolled in Servicemembers’ Group Life Insurance (SGLI) life insurance at the max coverage amount — $400,000.

This coverage lasts until 120 days after your retirement date, or the date you leave service. If you want to be covered after that date, you have some decisions to make.

There are a few dates that it’s important for soon-to-be veterans to know about when they are weighing their life insurance options. Please note that “date of retirement” is used here to mean both date of retirement and date of military separation; Veterans’ Group Life Insurance (VGLI) is available to all military personnel leaving active duty, not just retirees.

Days from retirementLife insurance options
0-120You are still covered by SGLI; you can convert to VGLI without medical underwriting
120-240You are no longer covered by SGLI; you can convert to VGLI without medical underwriting
240-485You are no longer covered by SGLI; you can convert to VGLI with medical underwriting
485+You are no longer covered by SGLI and cannot convert to VGLI; private life insurance is your only option

Servicemembers’ Group Disability Extension (SGLI-DE)

Servicemembers who are totally disabled at the time of discharge may apply to keep their SGLI coverage for an additional two years after their service separation date. Extending the coverage is free, but eligible members must apply for approval and prove either total disability (inability to work) or have one several listed conditions.

More information about SGLI-DE is available from the VA.

Service-Disabled Veterans Insurance (S-DVI)

Veterans who have received a service-connected disability rating by the VA may be eligible to receive Service-Disabled Veterans Insurance (S-DVI), which offers $10,000 in life insurance coverage. A premium waiver is also available. If you qualify for waived premiums, you may apply for the Supplemental S-DVI Program, which offers eligible veterans with a service-related disability an additional $30,000 in coverage with additional premiums.

More information about Service-Disabled Veterans Insurance (S-DVI) is available from the VA.

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What life insurance options are available to veterans?

If you do nothing after you leave the service, you will be covered by your SGLI policy until 120 days after your retirement date, and then will no longer have life insurance protection. Retiring veterans can choose to let their SGLI expire and go without life insurance. However, if you wish to remain covered, you have three options:

1. Let SGLI expire and buy private life insurance

If you decide to purchase private life insurance and you want to ensure that you have no gap in coverage, you need to start the life insurance application process as soon as possible once you make your decision so that you can avoid going without coverage.

After you apply for private life insurance coverage, it can take six to eight weeks (42 to 56 days) for your application to go through underwriting, longer if you have a complicated medical history and the carrier requests your medical records.

Ideally, you’ll have your new policy in place when your SGLI expries, though purchasing temporary life insurance coverage at the time application is also a possibility.

If you purchase private life insurance, you have the option of buying a whole life or term life policy. Term life policies, for which you pay for coverage for a set amount of time, are the best choices for most people.

Learn more about term vs. whole life insurance and which is right for you.

2. Convert SGLI to VGLI

Your SGLI coverage lasts until 120 days after your retirement date. If you are planning on converting it to VGLI, start the process early to ensure that you don’t leave a gap in coverage.

If you convert before you are 240 days out from retirement, you won’t have to answer medical questions.

If you convert after 240 days, you’ll have to answer medical questions and could be denied a policy or offered higher rates. Medical questions include questions about your health and medical history.

Either way, you’ll have to include the names of your beneficiaries, a signed copy of your application, you first month’s premium payment, and a copy of your most recent Leave and Earnings Statement.

You can apply for the conversion via paper application or through an online application on the VA’s website.

3. Convert SGLI to VGLI and buy private life insurance

If you have a complicated medical history or an injury or medical condition that may make a private insurance policy prohibitively expensive, it may make sense to convert your SGLI policy to VGLI during the first 240 days after retirement when you have guaranteed coverage.

If you find a better deal on a private policy, you can always let the VGLI coverage lapse, but if you’re worried about qualifying for life insurance, converting your SGLI to VGLI could mean the difference between having some protection and having none at all.

If you’re planning on applying for private life insurance, Policygenius can help you choose the best carrier for your personal medical and family history. And if those rates come back higher than expected, we can shop your application around to find an insurance company to give you the best deal.

How much does VGLI cost compared to a term policy?

Veterans’ Group Life Insurance (VGLI) rates are set and increase as you age based on your coverage amount. For the max coverage amount (a $400,000 death benefit), these are the VGLI rates by age:

AgePremium
29 & Below$32.00
Age 30-34$40.00
Age 35-39$52.00
Age 40-44$68.00
Age 45-49$88.00
Age 50-54$144.00
Age 55-59$268.00
Age 60-64$432.00
Age 65-69$600.00
Age 70-74$920.00
Age 75 & Over$1,840.00

In order to compare the costs to a private policy, we pulled numbers for a healthy 42-year-old male with no family history of disease. For a private $400,000, 20-year term policy, he would pay $30.

Over a 20-year period, the cost breakdown between comparable VGLI and private policies would be:

AgeVGLI per mo.VGLI per yearPrivate per mo.Private per year
42$68.00$816.00$30.00$360.00
43$68.00$816.00$30.00$360.00
44$48.00$576.00$30.00$360.00
45$88.00$1,056.00$30.00$360.00
46$88.00$1,056.00$30.00$360.00
47$88.00$1,056.00$30.00$360.00
48$88.00$1,056.00$30.00$360.00
49$88.00$1,056.00$30.00$360.00
50$144.00$1,728.00$30.00$360.00
51$144.00$1,728.00$30.00$360.00
52$144.00$1,728.00$30.00$360.00
53$144.00$1,728.00$30.00$360.00
54$144.00$1,728.00$30.00$360.00
55$268.00$3,216.00$30.00$360.00
56$268.00$3,216.00$30.00$360.00
57$268.00$3,216.00$30.00$360.00
58$268.00$3,216.00$30.00$360.00
59$268.00$3,216.00$30.00$360.00
60$432.00$5,184.00$30.00$360.00
61$432.00$5,184.00$30.00$360.00
62$432.00$5,184.00$30.00$360.00
TotalN/A$47,760.00N/A$7,560.00

So if you’re a 42-year-old in good health when you apply, you’d pay a little over six times (!) as much for the same amount of coverage for the VGLI policy than for a private term policy. As this illustrates, private term policies can be a lot more affordable if you’re healthy.

If you’re not healthy, the savings aren't as steep, but they're still there. For example, if you have a more complicated health history including hospitalizations and a family history of heart disease, your monthly premiums for the same private term policy could be $100. In that case, you’d pay $25,200 for a private policy over 20 years. But that is still less than the $47,760.00 you'd pay for the same benefit through VGLI. You have to do the math to decide what makes sense for you.

The best course of action is likely to keep your VGLI coverage and apply for private coverage and compare the premiums. It’s also possible that you could get more coverage from a private term policy while paying less than your VGLI policy.

Veterans, life insurance and PTSD

If you have been diagnosed with Post-traumatic Stress Disorder (PTSD), it may be difficult for you to purchase a private life insurance policy at an affordable rate, especially if the diagnosis is new or if you’re unemployed because of it.

Though applicants are viewed on a case-by-case basis, most life insurance companies will want to see a long history (over 12 months, generally) of successful treatment with medication and therapy and evidence that you can work.

Some private carriers are more friendly to applicants with veterans with PTSD than others, and a Policygenius agent can help you find the best carrier for you.

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Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.