Do All Veterans Have Life Insurance?

Life insurance for veterans is not automatically provided to all who have served. The Department of Veterans Affairs (VA) offers a comprehensive set of programs and options, catering to various circumstances of military service, health status, and other factors. The availability of specific coverage depends on whether an individual is on active duty, a separated veteran, or has a service-connected disability. Veterans must actively engage with these options to ensure financial protection.

Understanding VA Life Insurance Programs

The Department of Veterans Affairs offers several life insurance programs designed to provide financial security for servicemembers, veterans, and their families. Each program serves a distinct purpose and is tailored to specific groups within the military community.

Servicemembers’ Group Life Insurance (SGLI) provides low-cost term life insurance for active-duty servicemembers, ready reservists, and National Guard members. Servicemembers are automatically enrolled for the maximum coverage of $500,000, with premiums deducted from their monthly base pay. They can elect to reduce or decline coverage.

Veterans’ Group Life Insurance (VGLI) allows servicemembers to continue life insurance coverage after separation by converting their SGLI to a renewable term policy. VGLI provides coverage ranging from $10,000 to $500,000, based on the SGLI amount held at separation. Unlike SGLI, VGLI premiums increase with age, and coverage can be increased by $25,000 on the one-year anniversary and every five years thereafter, up to the maximum, until age 60.

Family Servicemembers’ Group Life Insurance (FSGLI) extends term life insurance coverage to spouses and dependent children of servicemembers insured under SGLI. Spousal coverage can be up to $100,000, not exceeding the servicemember’s SGLI amount, while dependent children receive $10,000 in coverage at no additional cost. Premiums for spousal coverage are paid by the servicemember and are based on the spouse’s age.

The Traumatic Injury Protection Program (TSGLI) provides a one-time, tax-free payment ranging from $25,000 to $100,000 to servicemembers who suffer severe traumatic injuries, regardless of whether the injury occurred on or off duty. This coverage is automatic for all servicemembers covered under SGLI and cannot be declined unless SGLI itself is declined.

For veterans with service-connected disabilities, the Service-Disabled Veterans Insurance (S-DVI) program historically offered life insurance. While S-DVI stopped accepting new applications on December 31, 2022, veterans who already have S-DVI can maintain their policies. Veterans Affairs Life Insurance (VALife), launched in January 2023, provides guaranteed acceptance whole life insurance for veterans aged 80 and under with any level of service-connected disability.

Veterans’ Mortgage Life Insurance (VMLI) is a specialized program offering mortgage life insurance to severely disabled veterans who have received a Specially Adapted Housing (SAH) grant. This decreasing-term insurance pays the mortgage holder directly, up to $200,000, and reduces as the mortgage balance declines. Eligibility for VMLI requires the veteran to hold the home’s title, have a mortgage, and be under 70 years old.

Eligibility and Enrollment for VA Life Insurance

Each VA life insurance program has specific eligibility criteria and enrollment procedures that veterans and servicemembers must follow to obtain coverage. The application process typically involves gathering specific documentation and submitting forms to the appropriate VA entity.

For Servicemembers’ Group Life Insurance (SGLI), active duty servicemembers are automatically enrolled for the maximum coverage amount upon entry into service. Servicemembers can manage their SGLI coverage, including reducing or declining coverage and designating beneficiaries, through the SGLI Online Enrollment System (SOES) via the milConnect website.

Veterans’ Group Life Insurance (VGLI) is available to servicemembers who had SGLI and are separating from service. To enroll, an individual must apply within one year and 120 days of leaving the military. Guaranteed acceptance without proof of good health is provided if the application is submitted within 240 days of separation. After this window, evidence of good health may be required. Applications can be submitted online or by mail.

For Service-Disabled Veterans Insurance (S-DVI), eligibility historically required veterans to have been released from active duty, not dishonorably discharged, and rated for a service-connected disability within a specific timeframe. Applications were submitted by mail or online. The VALife program now offers guaranteed acceptance whole life insurance to eligible veterans with service-connected disabilities.

Veterans’ Mortgage Life Insurance (VMLI) is specifically for severely disabled veterans who have received a Specially Adapted Housing (SAH) grant. Eligibility also requires the veteran to own the home, have an existing mortgage, and be under 70 years old at the time of application. To apply, veterans need to complete the required VA form and submit it. The application process begins after receiving an SAH grant.

Comparing VA and Commercial Life Insurance

When considering life insurance options, veterans can choose between programs offered by the VA and policies available from commercial insurance providers. Each type presents distinct features regarding cost, coverage, underwriting, and flexibility.

The cost structure for VA life insurance programs like VGLI is age-based, with premiums increasing as the policyholder ages. Commercial life insurance premiums are determined by various factors, including age, health, gender, and smoking status, often with options for level premiums that remain constant for a specified term. This difference can result in VGLI becoming more expensive than comparable commercial policies for younger, healthier individuals over time.

Coverage limits also differ between VA and commercial options. VGLI offers up to $500,000 in coverage, which may not be sufficient for veterans with substantial financial obligations. Commercial policies, however, often provide significantly higher coverage amounts, allowing individuals to secure protection that aligns more closely with their income replacement needs, mortgage balances, or other financial goals.

Underwriting processes represent a notable distinction. Many VA programs, such as VGLI, offer guaranteed acceptance if applied for within a specific timeframe after separation, eliminating the need for medical exams or extensive health questions. Commercial life insurance typically requires a comprehensive underwriting process, including medical examinations and detailed health questionnaires, to assess risk and determine eligibility and premium rates.

Regarding policy types, VGLI is a renewable term life insurance policy. Commercial insurers offer a wider array of policy types, including various forms of term life insurance, whole life insurance, and universal life insurance, which can accumulate cash value over time.

Riders and customization options are generally more limited with VA life insurance policies compared to commercial offerings. Commercial policies often provide numerous riders, such as accelerated death benefits, waiver of premium for disability, or critical illness riders. VA policies typically have fewer additional features or riders.

Portability is an important consideration. SGLI coverage ends 120 days after separation, but it can be converted to VGLI, ensuring continuous coverage. Spouses covered under FSGLI can also convert their coverage to a commercial policy without proof of good health within 120 days of a qualifying event. Commercial policies generally offer portability as well, allowing policyholders to maintain coverage even if they change employment or move.