What Are the Best Life Insurance Options for Veterans?

Life insurance offers financial protection for veterans and their families. As individuals transition from military service, they often encounter unique considerations regarding their insurance needs. Understanding available options, both through government programs and the private market, is important for making informed decisions. This guide clarifies these choices, helping veterans secure coverage that aligns with their financial goals.

Government Sponsored Life Insurance Programs

The Department of Veterans Affairs (VA) administers several life insurance programs tailored for servicemembers and veterans, addressing various stages of military service and post-service life. These programs provide a foundation of coverage.

Servicemembers’ Group Life Insurance (SGLI) provides low-cost term life insurance for those on active duty, members of the Ready Reserve or National Guard, and cadets or midshipmen. Most eligible servicemembers are automatically enrolled for the maximum coverage, currently $500,000, in $50,000 increments. Premiums are automatically deducted from military pay, with the rate for $500,000 of coverage being $25.00 per month, plus an additional $1.00 for Traumatic Injury Protection (TSGLI) coverage as of July 1, 2025. SGLI typically ends 120 days after separation from service.

Veterans’ Group Life Insurance (VGLI) allows servicemembers to continue their SGLI coverage after separating from service. This renewable term life insurance is available in increments of $10,000, up to a maximum of $500,000, but cannot exceed the SGLI amount held at separation. Veterans typically have one year and 120 days from separation to apply for VGLI, with a 240-day window during which no health questions are required. VGLI premiums are based on age and increase as they enter new age brackets, with the option to increase coverage by $25,000 every five years until age 60 without proof of good health.

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 coverage, with premiums based on the spouse’s age. Dependent children are covered for $10,000 each at no additional cost. FSGLI spousal coverage is generally automatic unless declined, and dependent child coverage is also automatic.

Traumatic Injury Protection SGLI (TSGLI) is a rider to SGLI that provides a one-time, lump-sum payment to servicemembers who suffer certain traumatic injuries, whether on or off duty. This benefit ranges from $25,000 to $100,000, depending on the severity and type of injury, such as loss of limbs, severe burns, or paralysis. TSGLI is automatically included with SGLI coverage, and its premium is $1 per month for most servicemembers. This payment is tax-free and can be used at the servicemember’s discretion.

Service-Disabled Veterans Insurance (S-DVI), also known as “RH Insurance,” was for veterans with service-connected disabilities who were otherwise in good health. This program provided up to $10,000 in life insurance coverage, with an additional $30,000 in supplemental coverage for those who qualified for a premium waiver due to total disability. The VA stopped accepting new applications for S-DVI on December 31, 2022, replacing it with the Veterans Affairs Life Insurance (VALife) program in January 2023. Veterans with S-DVI can retain it or transition to VALife, which offers guaranteed acceptance whole life insurance.

Veterans’ Mortgage Life Insurance (VMLI) is a specialized program that provides mortgage payment protection for severely disabled veterans who have received a Specially Adapted Housing (SAH) grant. This insurance pays up to $200,000 directly to the mortgage lender to cover the outstanding mortgage balance in the event of the veteran’s death. To be eligible, veterans must have a service-connected disability, received an SAH grant, hold the home’s title, have a mortgage, and apply before their 70th birthday. VMLI premiums are determined by the veteran’s age, mortgage balance, and remaining mortgage term.

Private Market Life Insurance Options

In addition to government-sponsored programs, veterans have access to a wide range of life insurance policies through the private market. These policies offer tailored financial planning.

Term life insurance covers a specific period, such as 10, 20, or 30 years. It pays a death benefit to beneficiaries if the insured dies within the defined term. Premiums are typically fixed for the policy duration and generally lower than permanent life insurance options, as it does not build cash value. This policy is often suitable for covering temporary financial obligations, like a mortgage or the years a child is dependent.

Whole life insurance is a permanent life insurance that offers coverage for the insured’s entire life. Whole life policies accumulate cash value over time on a tax-deferred basis. Policyholders can borrow against this cash value or withdraw from it. Premiums usually remain level throughout the policy’s existence, offering predictable costs.

Universal life insurance provides permanent coverage but offers more flexibility than whole life. Policyholders can adjust their premium payments and death benefits within certain limits. This policy also builds cash value, which can grow based on interest rates or investment performance. The flexibility can be beneficial for individuals whose financial situations may change.

Private insurers evaluate applicants based on health, age, lifestyle, and occupation. While military service itself does not disqualify an applicant, certain service-related conditions or past deployments might influence underwriting decisions or premium rates. Many healthy veterans may find competitive rates in the private market, especially if their service-connected conditions are well-managed or minor.

Key Considerations When Choosing Coverage

Selecting appropriate life insurance involves evaluating personal circumstances and future financial needs.

Understanding financial needs and dependents helps determine coverage amounts. Veterans should calculate the income replacement needed for their families, accounting for current expenses, future obligations like children’s education, and outstanding debts. The number of dependents and their ages influences the duration and amount of coverage required.

Health and age significantly impact eligibility and premiums for both government and private insurance. Younger, healthier veterans generally qualify for lower premiums and broader coverage options. Service-connected disabilities can affect private market rates, though government programs like VGLI offer guaranteed acceptance regardless of health for eligible veterans.

Considering the budget and premiums is essential for maintaining coverage over time. While some VA programs offer competitive rates, private policies vary widely. Veterans should compare the cost of different policies to ensure the premiums are affordable without compromising other financial priorities. A policy that is too expensive may lead to lapse, leaving loved ones unprotected.

Coverage duration is an important factor. Term life insurance provides temporary protection suitable for specific periods of high financial responsibility. Permanent options like whole life or universal life offer lifelong coverage and can be beneficial for estate planning or ensuring funds for final expenses. The choice depends on whether the goal is to cover short-term needs or provide perpetual financial security.

Service-connected disabilities influence life insurance choices. While S-DVI is no longer accepting new applications, programs like VALife are designed for veterans with service-connected disabilities, offering guaranteed acceptance. For private policies, the nature and severity of a disability might lead to higher premiums or specific exclusions, making it important to disclose all relevant health information to insurers. Some disabilities may not impact private rates if they do not pose a significant mortality risk.

Deciding between policies that offer cash value versus pure protection is a consideration. Term life insurance provides pure death benefit protection without a savings component. Permanent policies, such as whole life or universal life, accumulate cash value, which can serve as a living benefit accessible during the policyholder’s lifetime. The choice depends on whether the veteran prioritizes a savings component or solely needs a death benefit for beneficiaries.

Steps to Secure Life Insurance

Once a veteran has assessed their needs, the next step is navigating the application process.

For government-sponsored programs, the application process typically begins through the Department of Veterans Affairs website or by contacting the Office of Servicemembers’ Group Life Insurance (OSGLI). For VGLI, eligible servicemembers can convert their SGLI coverage online, by mail, or fax using VA Form SGLV 8714. It is important to adhere to specific application deadlines, such as the 1 year and 120-day window for VGLI conversion, to avoid the need for proof of good health.

Securing a private life insurance policy involves several steps. Veterans can contact licensed insurance agents or brokers who can provide quotes from multiple companies. Obtaining several quotes allows for comparison of coverage amounts, premiums, and policy features. The application process typically requires completing a detailed form with personal, financial, and health information.

After submitting an application, private insurers often initiate an underwriting process, which may include a medical exam, a review of medical records, and a check of prescription history. This evaluation helps the insurer assess the applicant’s risk profile and determine the final premium rate. Once underwriting is complete and the policy is approved, the insurer will issue the policy, and coverage becomes effective upon payment of the first premium.