Service members will automatically receive an extra $100,000 of life insurance coverage as of March 1, increasing the maximum Servicemembers’ Group Life Insurance coverage amount to $500,000.
All service members will automatically get the increased coverage, including those who have previously reduced or declined their Servicemembers’ Group Life Insurance, known as SGLI. The boost in coverage applies to all those eligible for SGLI, including active duty, Guard and reserve members.
Troops will pay a premium of $31 per month for $500,000 worth of coverage, a $6 increase, which will be deducted from their pay. The monthly SGLI premium is the same regardless of the service member’s age or other factors. Currently, troops pay $25 a month for $400,000 of life insurance coverage. The rate hasn’t changed; the cost is still 6 cents per $1,000 of insurance. SGLI coverage is offered in increments of $50,000.
Also on March 1, the maximum coverage for Veterans’ Group Life Insurance, or VGLI, is also increasing to $500,000, up $100,000 from the current $400,000. That is not automatic. Eligible veterans must request it.
The Department of Veterans Affairs will now be providing $1.45 trillion of life insurance coverage, making it the 12th largest group life insurer in the United States, said Daniel Keenaghan, executive director of the VA insurance service. The VA administers both the SGLI and VGLI insurance programs.
This is the first time the SGLI coverage amount has increased since 2005.
“This is going to help support our service members and veterans protect those who matter most,” Keenaghan said during a media roundtable. “As costs have increased, we are increasing our overall life insurance coverage correspondingly.”
All monthly SGLI premiums include $1 for TSGLI. Servicemembers’ Group Life Insurance Traumatic Injury Protection provides short-term financial support to help eligible service members recover from a severe injury such as loss of limb or a variety of other injuries. As before, SGLI also includes $10,000 of coverage for the service member’s dependent children at no extra cost. There is no change to the coverage amounts for the separate program called Family SGLI, which provides extra life insurance for spouses and children.
Service members leaving the military on or after March 1 who had the maximum SGLI coverage can purchase VGLI coverage up to $500,000. Veterans under age 60 who currently have $400,000 maximum VGLI coverage will be able to purchase additional coverage, in increments of $25,000, at specified anniversary dates.
Currently, 88% of service members have the maximum amount of SGLI coverage at $400,000, according to Keenaghan. That includes 95% of active duty service members and 73% of reservists.
Automatically including active, Guard and reserve members in the new coverage maximum allows everyone to get the insurance without medical underwriting, even if they previously reduced or declined coverage. If active duty service members want to decline or reduce their new coverage, they can do so starting March 1, using the SGLI Online Enrollment System. Reservists with part-time SGLI coverage who want to decline or reduce their coverage should use Form SGLV 8286 and provide it to their personnel office.
Troops must do this before the end of March in order to avoid paying the monthly premium of $31 for the coverage.
The increase is required by the “Supporting Families of the Fallen Act,” signed into law by President Joe Biden on Oct. 17. The law specifies that the increase to $500,000 in coverage can’t result in the insurance programs operating at a loss.
Unlike the rates for service members, VGLI rates increase every five years as the veteran ages, starting at age 30. For veterans age 29 and younger, the monthly cost for $500,000 of coverage will be $35, Keenaghan said. The full table for the premiums for $500,000 for all ages will be available on the VA website beginning March 1.
SGLI coverage is considered to be a strong benefit for service members at a reasonable cost, but SGLI ends when the service member leaves the military. SGLI can be converted to the Veterans’ Group Life Insurance program within a year and 120 days. VGLI is more expensive than some other insurance programs. Yet it’s important to remember that everyone leaving the military with SGLI coverage qualifies for VGLI, regardless of health. If you sign up for VGLI within 240 days of separation, you don’t need to prove you’re in good health.
Financial experts advise military members to shop around for life insurance before they leave the military. If they can’t qualify for life insurance through another program for some reason, they can sign up for VGLI.
Karen has covered military families, quality of life and consumer issues for Military Times for more than 30 years, and is co-author of a chapter on media coverage of military families in the book “A Battle Plan for Supporting Military Families.” She previously worked for newspapers in Guam, Norfolk, Jacksonville, Fla., and Athens, Ga.