Understanding life insurance plans for active members of the military has a variety of different components. Conversion options, Veterans’ Group Life Insurance (VGLI), and Servicemembers Group Life Insurance (SGLI) are just a few of the major components, and reaching a greater awareness of the features of each gives you the details that allow you to make an informed decision when it comes to life insurance options.
While it may be difficult to understand the features of each, this blog post will provide more information that may help you understand the benefits of each. This post will explain how SGLI works, and it will discuss your options and how you can convert SGLI to VGLI when you reach retirement age. In addition, you’ll learn more about the options for individual coverage.
Each person has their own challenges when shopping for insurance coverage. Your occupation is going to impact your chances of getting coverage and how much you will pay every month. This is especially true for anyone who is in the military.
Once upon a time, these people would never be able to get enough coverage for a rate they could afford. Those days are long gone.
The Features and Benefits of SGLI
SGLI is a policy that is offered to service members who are on active duty, are serving in the reserves, or who are involved with the National Guard. SGLI includes the following features:
- Plans are available in $50,000 increments to a maximum of $400,000
- No medical exam is required to qualify
- Premiums are the same for everyone and are independent of age
- Rates are affordable
I highly recommend that you consider the benefits of SGLI, but if you require more than $400,000 in life insurance, you may be interested in purchasing an individual life insurance policy. SGLI plans are like no other plans out there. You aren’t going to get higher premiums because of your age, which is a huge benefit.
Further options will be thoroughly discussed later on in the blog.
For some customers, $400,000 might be enough insurance, for others, they are going to need much more, maybe as much as $1 million or more.
How to Qualify
Not everyone is eligible to buy an SGLI policy. There are several ways you can be eligible for coverage. You’ll have to check off at least one box to buy a plan.
The most obvious way you can be eligible is to be an active duty member in any branch of the military. Regardless of the branch, you can get up to the $400,000 in coverage.
Another way you can buy these plans is if you’re cadet or midshipman in one of the military academies, then you’re eligible as well. If you’re in one of those academies, then you probably aren’t considering buying a life insurance policy at this stage of life, but think again.
As we mentioned above, people in the National Guard are allowed to get these policies as well, but there are caveats. Anyone in the Reserve or in the National Guard, as long as you’re scheduled to go through at least 12 periods of inactive training a year, you will get the protection.
There are several other ways, like being apart of the Individual Ready Reserve, in ROTC, or being in National Oceanic and Atmospheric Administration, but those are less common.
What Happens If You Decide to Retire?
If you choose to retire from military service, you’ll have the ability to convert your current SGLI coverage to term or permanent life insurance with a VGLI policy. Here are the areas where I think that SGLI may not be such a good deal.
Learning about VGLI
If you’re interested in converting your current SGLI policy to a term life insurance, you can still receive a host of benefits. There is no required medical exam, and smokers can receive the same low rates as non-smokers. This means that as a non-smoker you are subsidizing smokers and probably paying higher rates than with an individual life insurance policy.
Another disadvantage is the fact that you can’t lock your current rate in because it goes up every five years. This simply means that if you’re 40 and find an affordable insurance plan, you may not think it’s such a great idea when you reach 55.
As an example, consider that at the age of 40, your coverage is $68 monthly for a $400,000 policy. When you get the age of 50, your price increases to $144 monthly, and by the time you’re 55, you’ll be subject to $268 expenses on a monthly basis. When you finally reach 70, you’ll be paying nearly $900 each month, just for your life insurance.
The best way to address the rising cost of life insurance is to purchase a term policy that is good for 20 to 30 years. This allows you to lock in a single low price for the entire term of the policy. As a healthy 40-year-old male, you’ll be paying a mere $47 monthly for $400,000 worth of coverage. This option is much more cost effective than the high prices of VGLI. The only time where I would advise VGLI is if you’re not healthy and you can’t get an individual term policy.
Life Insurance For Active Military Members
As a member of the military, if you need more than the bare minimum amount of coverage that is offered by SGLI, you have a few other options. You can choose an individual policy with MetLife, Prudential, or USAA.
A 45-year-old male who is looking for a $500,000 policy that is good for a 20-year term would pay:
While we offer a variety of different policies, we’ve generally found that it’s more affordable to go with Prudential or MetLife because the strict guidelines at USAA may not qualify you for the lowest rates. Additionally, we’ve found that USAA requires more time for approval than MetLife or Prudential.
As an active duty member of the armed services, you can qualify for life insurance with or without deployment papers. If you sign the application while in the United States, you are able to receive coverage.
Military and Life Insurance – What You Need to Know
As a military member, you have access to several different kinds of insurance most other applicants don’t.
Regardless of what you do for insurance coverage, either SGLI or supplement your insurance with another plan, it’s important your family gest the necessary coverage.
Do you have questions about SGLI, USAA, MetLife, or any of the other companies we are partnered with, please let us know. We would love to hear your concerns and help you find affordable rates.
As an applicant in the military, finding insurance is going to be a little more difficult compared to customers with other professions.
If you need term life insurance to protect you and your family, we can help. Give us a call at 888-552-6159 or fill out the quote form on this page.