Key Takeaways
- Renewable life insurance for eligible veterans.
- Apply within 1 year and 120 days post-service.
- No medical exam if applied within first 240 days.
- Coverage matches SGLI amount; increases allowed without health proof.
What is Veterans Group Life Insurance (VGLI)?
Veterans Group Life Insurance (VGLI) is a renewable term life insurance program offered by the U.S. Department of Veterans Affairs, allowing eligible veterans to convert their Servicemembers' Group Life Insurance (SGLI) coverage after leaving military service without requiring a medical exam if applied for promptly. This insurance ensures continuous life coverage for veterans transitioning to civilian life under a contract based on uberrimae fidei contract principles, emphasizing utmost good faith.
VGLI provides a portable option that matches your previous SGLI amount, helping maintain financial security for you and your beneficiaries during your civilian years.
Key Characteristics
VGLI offers flexible coverage tailored to veterans' needs. Key features include:
- Renewable Term Insurance: Coverage renews annually without a medical exam if premiums are paid on time.
- Coverage Amounts: Initial coverage equals your SGLI amount at separation, from $10,000 to $500,000 in $10,000 increments.
- Incremental Increases: You can increase coverage by $25,000 on the 1-year anniversary and every 5 years until age 60 without health proof.
- Guaranteed Acceptance Period: No health evidence needed if you apply within 240 days of separation.
- Premiums: Monthly payments increase with age but are not based on health status, resembling the structure of an earned premium model.
- Tax-Free Death Benefit: Similar to SGLI, the payout to beneficiaries is tax-free.
How It Works
After separating from service, you have up to 1 year and 120 days to apply for VGLI, with the first 240 days offering guaranteed acceptance without health questions. Applications are submitted online via the Office of Servicemembers' Group Life Insurance or by mail with VA Form SGLV 8714.
Premiums are paid monthly and increase as you age, reflecting risk adjustments common in life insurance pricing. Coverage remains active as long as premiums are paid, with no cash value accumulation, differentiating it from paid-up policies like paid-up additional insurance. You can raise your coverage amount in specified increments without new health evaluations, making VGLI a flexible choice for veterans.
Examples and Use Cases
VGLI is ideal for veterans seeking to maintain life insurance coverage without undergoing new medical underwriting. It supports financial planning for various life stages and obligations.
- Military retirees transitioning to civilian careers: VGLI coverage continues seamlessly, allowing you to focus on new employment at firms like Delta or American Airlines.
- Reservists or National Guard members: Those moving from active duty or Ready Reserve status can preserve coverage without interruption.
- Estate planning: Provides a tax-free death benefit to assist beneficiaries in managing obligations, complementing a broader financial plan that might include low-cost index funds (best low cost index funds).
Important Considerations
While VGLI offers guaranteed issuance early on, applying after 240 days requires health proof, which may affect eligibility. Premiums increase with age, so comparing VGLI costs to private insurance alternatives could be advantageous if you are in good health.
Understanding your coverage and premium obligations is essential, especially as you approach age 60 when coverage increases stop. Align your life insurance decisions with your overall financial goals and consider consulting resources like obligation management to ensure you meet your commitments effectively.
Final Words
VGLI provides a valuable option to maintain life insurance coverage after military service without a medical exam if applied for promptly. Review your eligibility and submit your application within 16 months of separation to secure your coverage.
Frequently Asked Questions
VGLI is a renewable term life insurance program offered by the VA that allows eligible veterans to convert their Servicemembers' Group Life Insurance (SGLI) coverage after leaving military service, usually without a medical exam if applied for within the first 240 days.
Veterans who had SGLI coverage and apply within 1 year and 120 days of separating from service—whether through active duty, Ready Reserve, National Guard, or related service statuses—are eligible to apply for VGLI.
Initial VGLI coverage matches your SGLI amount at separation, ranging from $10,000 to $500,000 in $10,000 increments. You can increase coverage by $25,000 on the first anniversary and every five years until age 60, up to the $500,000 maximum without proving good health.
If you apply within 240 days after separation, no medical exam or health proof is required for guaranteed acceptance. Applying after 240 days but within 1 year and 120 days requires evidence of good health and may risk denial if health issues exist.
You can apply online through the Prudential OSGLI website or by mailing or faxing VA Form SGLV 8714. You should apply within 1 year and 120 days of separation, and your application packet is usually sent automatically 45-60 days after you leave service.
VGLI premiums increase with age but are not based on your health. This means your monthly cost goes up as you get older, regardless of your medical condition.
Yes, VGLI is portable, meaning you can keep your coverage regardless of where you live or work after leaving military service.
