How Much Is a Military Life Insurance Payout?

Military life insurance programs provide financial security for service members and their families. These government-sponsored initiatives support those who serve by ensuring their loved ones receive financial assistance. The United States government provides several programs, each tailored to different stages of a military career and family needs. This coverage helps alleviate financial burdens, allowing beneficiaries to manage expenses and maintain stability.

Servicemembers’ Group Life Insurance (SGLI)

Servicemembers’ Group Life Insurance (SGLI) stands as a foundational benefit offering low-cost term life insurance coverage for those actively serving. Eligibility extends to active-duty members of all armed forces branches, including the Army, Navy, Air Force, Space Force, Marines, and Coast Guard. Commissioned members of the National Oceanic and Atmospheric Administration (NOAA) and the U.S. Public Health Service (USPHS) are also covered. Additionally, cadets and midshipmen of U.S. military academies, ROTC members engaged in authorized training, and members of the Ready Reserve or National Guard assigned to units with at least 12 periods of inactive training per year qualify.

Coverage under SGLI is automatic upon entry into service, with service members enrolled for the maximum amount unless they choose to reduce or decline coverage. The maximum coverage available is currently $500,000. Service members can elect coverage in $50,000 increments.

The premium for SGLI is deducted from the service member’s pay. Effective July 1, 2025, the monthly premium for the maximum $500,000 coverage is set to decrease to $25, plus an additional $1 for Traumatic Injury Protection (TSGLI) coverage, totaling $26 per month. This cost remains consistent regardless of the service member’s age or health status. SGLI coverage can be extended for up to two years at no cost if a service member is totally disabled at separation.

Veterans’ Group Life Insurance (VGLI)

Veterans’ Group Life Insurance (VGLI) allows service members to continue life insurance coverage after transitioning from military service. This program allows individuals to convert their SGLI coverage into renewable term life insurance upon separation. To be eligible, a veteran must have held SGLI at the time of separation and apply within specific timeframes.

The application window is generally one year and 120 days from the date of separation. Applying within the first 240 days of separation guarantees acceptance without requiring proof of good health. If applying after 240 days but within the one-year and 120-day window, evidence of good health becomes a requirement. The maximum coverage available through VGLI matches the SGLI coverage held at separation, up to $500,000. Coverage can be obtained in $10,000 increments.

Veterans can increase their VGLI coverage in $25,000 increments every five years, up to the maximum $500,000, until they reach age 60. Premiums for VGLI are based on the veteran’s age and the amount of coverage, with rates increasing as the veteran gets older. This age-based premium structure differs from SGLI, where the cost is uniform for all service members.

Family Servicemembers’ Group Life Insurance (FSGLI)

Family Servicemembers’ Group Life Insurance (FSGLI) offers life insurance protection for the spouses and dependent children of service members covered under SGLI. This program extends financial security to the immediate family members of those serving. Eligibility for FSGLI is directly tied to the service member’s enrollment in full-time SGLI.

Spouses can be covered for up to $100,000, though this amount cannot exceed the service member’s own SGLI coverage. Spousal coverage is available in $10,000 increments. For dependent children, FSGLI provides a fixed coverage amount of $10,000 per child.

Children are automatically covered at no additional cost if the service member is enrolled in SGLI. For spouses, coverage is automatic for civilian spouses registered in the Defense Enrollment Eligibility Reporting System (DEERS), with premiums deducted from the service member’s pay.

Receiving Payouts and Beneficiary Designations

Receiving life insurance payouts across military programs depends on proper beneficiary designations. It is important for service members to designate beneficiaries accurately and keep this information updated. This ensures the intended individuals receive the policy’s proceeds promptly and without complications. Failure to designate a beneficiary can lead to delays and may result in proceeds being paid according to a federal order of precedence, starting with the surviving spouse, then children, and then parents.

Life insurance payouts from these military programs are disbursed as a single lump sum payment. This method provides beneficiaries with immediate access to the full death benefit. Beneficiaries receive these proceeds free from federal income tax. For military life insurance, the lump sum is the standard.

The process of receiving a payout involves the beneficiary submitting a claim along with necessary documentation, such as a death certificate, to the Office of Servicemembers’ Group Life Insurance (OSGLI). Once the claim is approved, the funds are disbursed within 30 to 60 days. Beneficiaries should be aware of the process and any required forms to facilitate a smooth and timely payout.