Life insurance is a way for people to take care of their loved ones’ financial needs after they’ve passed away. However, due to the hazards of military service, veterans and military retirees may have a more difficult time getting approved for standard life insurance.
Veterans can still find valuable life insurance coverage through private insurers and government and state programs. For example, eligible service members are automatically enrolled in Servicemembers’ group life insurance, but there are also more options for life insurance for military retirees and veterans. Learn more about where to get life insurance after leaving the military.
Government and Private Life Insurance as a Veteran
The federal government, through the Department of Veterans Affairs (VA), administers several options for life insurance for retired military, veterans, active duty service members, and active duty family members. These government-backed programs work differently than commercial life insurance policies.
As federal veterans benefits, the VA life insurance programs are designed to offer low-cost life insurance for military retirees and veterans, including those with severe service-related disabilities. Some programs are subsidized with government funds to keep veterans’ premiums affordable.
Private life insurance policies are sold by private companies. Insurers often require proof of good health before selling a policy. For veterans with health issues or service-connected disabilities, this requirement can make private coverage unaffordable or unavailable.
Permanent vs. Term Life Insurance
Whether veterans choose to get insurance through the VA or through a private company, there are two main types of policies: permanent life insurance and term life insurance.
Permanent life insurance, such as whole life insurance, is coverage that does not have a set expiration date. Some policies have a cash value component that policyholders can access during their lifetimes. These types of policies are best for those seeking lifelong coverage and larger death benefits.
Term life insurance provides coverage for a set amount of time, such as 5, 10, or 20 years. The coverage often expires when the term ends, but some policies give veterans the option to renew their policy for additional terms. These types of policies are best for those seeking coverage for a specific amount of time, such as for the duration of a child’s financial dependence, or the length of a mortgage or business loan.
Can You Have Government-backed Life Insurance and Private Life Insurance At the Same Time?
Yes, you can have both government-backed and private life insurance at the same time. There’s no limit on the number of life insurance policies a person can own, so veterans with government-backed life insurance may be able to buy one or more private policies in addition to their government-backed insurance. In fact, multiple policies could be a good idea.
VA life insurance policies offer between $10,000 and $400,000 in coverage, depending on the plan a veteran chooses. Veterans who want more than the maximum amount of VA coverage may consider supplementing with a private policy.
Private life insurers typically sell policy add-ons for policyholders who want to better tailor their coverage. Veterans could add benefits on their private policies that are not available through VA life insurance, such as accidental death riders or long-term care riders.
Government Options for Active Duty, Veterans, and Military Retirees
The VA offers several life insurance programs for current and former military personnel. Active duty service members are covered by SGLI, and there are a few options for life insurance for military retirees and veterans. Check the chart below to learn who’s eligible for each plan, plus how much it might cost.
|Who’s Covered||Policy Type||Maximum Benefit||Average Premium Rates: Maximum Coverage, Age 30-39||Average Premium Rates: Maximum Coverage, Age 40-49||Average Premium Rates: Maximum Coverage, Age 50-59||Average Premium Rates: Maximum Coverage, Age 60-69||Average Premium Rates: Maximum Coverage, Age 70-79|
|VGLI||Veterans, retired military||Term||$400,000||$42.00||$74.00||$186.00||$492.00||$1,308.00|
|VALife||Veterans with service-connected disabilities||Whole life||$40,000||$72.24||$105.20||$158.44||$245.24||$392.56|
|S-DVI||Veterans with service-connected disabilities||Varies, 9 plan options||$10,000 (Basic S-DVI)||$17.84||$25.95||$39.81||$65.01||$114.30|
|VMLI||Service members and veterans with severe service-connected disabilities||Decreasing-term||$200,000||—||—||—||—||—|
|FSGLI||Spouses and dependent children of service members||Term||$100,000 (Spouse)|
Servicemembers’ Group Life Insurance (SGLI)
Servicemembers’ Group Life Insurance (SGLI) is a term life insurance option for members of the uniformed services. It includes SGLI Traumatic Injury Protection (TSGLI), a program that provides financial support to service members who’ve experienced severe injuries.
Eligible service members are automatically enrolled in either full-time or part-time SGLI coverage based on their service status. Full-time coverage is in effect both on and off duty. Part-time coverage is in effect when the service member is on duty or traveling to and from duty, such as in the case of Reserve members who drill infrequently.
This term life insurance policy generally remains active for 120 days after leaving the military. Through the SGLI Disability Extension, eligible veterans with disabilities can keep their coverage for two years after their separation date.
SGLI is available to people currently serving in the military, including active duty members of the uniformed services, cadets or midshipmen of the U.S. military academies, and members of the Reserve/National Guard.
SGLI provides up to $400,000 in life insurance coverage in increments of $50,000. TSGLI pays up to $100,000 to service members who experience a non-fatal traumatic injury.
How to Enroll
There’s no application process for SGLI. Eligible service members are automatically enrolled in the maximum amount of SGLI coverage ($400,000). SGLI is not mandatory, so members are permitted to decline or reduce coverage after enrollment.
Veterans’ Group Life Insurance (VGLI)
Veterans’ Group Life Insurance (VGLI) gives veterans the option to keep their life insurance coverage after leaving the military. VGLI is a renewable, 5-year term life insurance policy with an accelerated benefit option.
Veterans are not required to provide proof of good health if they apply within 240 days of leaving the military. Once this life insurance for retired military is active, it can be renewed every 5 years. Veterans also have the option to convert their VGLI policy to a commercial whole life policy.
VGLI’s accelerated benefit option allows terminally ill veterans to access a portion of the death benefit early. Eligible veterans may receive a lump-sum payment of up to 50% of the policy’s face value.
Veterans and former service members might be eligible if they had full-time SGLI when they were in the military. Former National Guard or Reserve members who had part-time SGLI may be eligible if they have a service-related injury or disability.
This life insurance for military veterans provides between $10,000 and $400,000 in coverage. A veteran’s initial coverage limit is the amount they had through SGLI.
How to Enroll
Applications must be submitted within one year and 120 days of leaving the military. Veterans can submit an application to the Office of Servicemembers’ Group Life Insurance online, or by mail or fax.
Veterans Affairs Life Insurance (VALife)
Veterans Affairs Life Insurance (VALife) is a new program that opens for enrollment on January 1, 2023. It’s a whole life insurance option for veterans with service-connected disabilities. VALife is a guaranteed acceptance program, which means applicants do not need to provide proof of good health. This could make it a good option for veterans who have serious health issues that make them ineligible for other life insurance.
Like other guaranteed acceptance life insurance programs, VALife has a two-year waiting period. If a veteran passes away within two years of enrollment, the death benefit is limited to premiums paid plus interest.
Veterans are eligible to apply for VALife if they’re 80 years old or younger and have received a VA disability rating. Veterans who are 81 years old or older may be eligible in limited circumstances.
The VALife program provides up to $40,000 in coverage in increments of $10,000.
How to Enroll
Veterans who are interested in this military retiree life insurance option can apply online via the Veterans Affairs website. The program opens for applications on January 1, 2023.
Service-Disabled Veterans Life Insurance (S-DVI)
Service-Disabled Veterans Life Insurance (S-DVI), also commonly known as RH insurance, is life insurance for veterans with disabilities. It offers low-cost coverage to veterans who may not be eligible for other life insurance due to military injuries.
There are 9 life insurance options within the S-DVI program. Veterans can choose between term, permanent, and endowment policies. The latter pays a benefit to the policyholder if they outlive the contract term.
The VA is replacing S-DVI with the VALife program described above. Applications for S-DVI will not be accepted after December 31, 2022. However, veterans who already have S-DVI can choose to keep it or switch to VALife.
Veterans may be eligible for S-DVI if they have a service-connected disability but are otherwise in good health and did not receive a dishonorable discharge.
S-DVI provides up to $10,000 in coverage. Veterans who have a VA rating of total disability may be eligible for up to $30,000 in supplementary coverage.
How to Enroll
This program is open for new applications until December 31, 2022. Interested veterans can apply online or by mail. After December 2022, this program will stop taking new applications, though veterans already enrolled in S-DVI may keep their coverage. New applicants should instead enroll in VALife.
Veterans’ Mortgage Life Insurance (VMLI)
Veterans’ Mortgage Life Insurance (VMLI) is mortgage protection insurance for service members and veterans with severe service-connected disabilities. If the policyholder passes away, VMLI helps their surviving family members pay off the home loan.
VMLI is decreasing-term life insurance, which means the coverage amount decreases as the outstanding mortgage balance decreases. The term ends when the mortgage is paid off. Unlike other VA life insurance options, the death benefit is paid directly to the lender that holds the mortgage, not to the policyholder’s chosen beneficiaries.
This life insurance option is offered to veterans who’ve received a Specially Adapted Housing (SAH) grant. This grant helps veterans buy or build an accessible home or make modifications to an existing home.
Service members and veterans may be eligible for VMLI if they’re under 70 years old, have a home mortgage, and received a SAH grant.
VMLI offers coverage for the policyholder’s remaining mortgage balance, up to a maximum of $200,000.
How to Enroll
Veterans who’ve received the SAH grant can contact their loan guaranty agent for help applying for VMLI.
Family Servicemembers’ Group Life Insurance (FSGLI)
Family Servicemembers’ Group Life Insurance (FSGLI) is term life insurance for spouses and dependent children of people enrolled in SGLI. It provides coverage while the sponsor is serving in the military.
Enrollment in FSGLI is generally automatic, so long as the service member’s family members are registered in the Defense Enrollment Eligibility Reporting System (DEERS). FSGLI coverage ends when the sponsor’s SGLI coverage terminates, which happens 120 days after leaving the military.
FSGLI is available to spouses and dependent children of service members who have full-time SGLI. The service member must either be on active duty or in the National Guard/Ready Reserve.
FSGLI provides up to $100,000 in coverage for spouses and $10,000 for each dependent child. Spouses are not permitted to have more coverage than their sponsors.
How to Enroll
Dependent children and civilian spouses are automatically enrolled in FSGLI. Service members married to other service members can request FSGLI coverage through the SGLI Online Enrollment System (SOES).
Private Life Insurance Options for Active Duty, Veterans, and Military Retirees
Military members may want to have a private policy to supplement their existing VA policy’s death benefit or to add different types of coverage. Some veterans choose to decline their VA coverage if they find more affordable coverage on the private market.
Service members and veterans who are covered through SGLI and VGLI have the option to convert their VA policy to a commercial whole life policy. There are 11 private insurance companies that participate in the conversion program.
Some private life insurance companies sell policies specifically for service members and military veterans. These military-focused policies may not require a medical exam and may offer coverage while policyholders are training or deployed. However, veterans are not limited to policies that are marketed to military members.
How Much Does Private Life Insurance Cost?
The cost of private life insurance for retired military, veterans, and active duty service members varies. Some factors that affect life insurance premiums include the policy type, coverage amount, and policyholder’s health status.
Term life insurance policies tend to cost less than permanent policies. That’s because they do not offer lifelong coverage and do not include a cash value component.
The coverage amount affects the cost of private insurance, too. Higher coverage levels mean higher premiums. This is also true for the policies offered through the VA: For example, a 50 to 54-year-old with VGLI pays $33 per month for $100,000 in coverage, compared with $132 per month for $400,000 in coverage.
Insurers charge higher premiums to applicants with a higher risk of dying while the coverage is active. Veterans with serious health conditions or disabilities can expect higher premiums. Age also plays a role in this calculation, so older applicants tend to pay higher premiums.
How to Enroll
To apply for a private life insurance policy, work with a trusted agent or contact the insurer directly. Insurance companies use a medical underwriting process to determine whether or not to sell a policy and how much to charge for the coverage.
Simply, medical underwriting means looking at a veteran’s health history to determine their likelihood of dying while the coverage is active. This process typically involves a medical exam. During this exam, a nurse records the veteran’s height, weight, and blood pressure and takes blood and urine samples for analysis.
Some insurers use a simplified medical underwriting process. For simplified underwriting, applicants complete a detailed health questionnaire instead of undergoing a medical exam. It is critical to answer the questionnaire as accurately as possible to avoid policy lapses or cancellations due to providing false or misguiding information when you enrolled.
Should You Get a Private Life Insurance Policy?
Private life insurance policies can be a good option for some military members. Before applying for private life insurance for military retirees, veterans, or active duty service members, consider the advantages and disadvantages of this coverage.
Commercial policies are not linked to a service member’s military status, so they remain active after leaving the military. They’re also available to veterans who received a dishonorable discharge, unlike life insurance through the VA. Buying a private life insurance policy could also make sense for veterans who want a higher coverage level than the VA offers.
However, since private policies typically require medical underwriting, this coverage may be unavailable to veterans with severe service-connected disabilities. In addition, active duty service members who are interested in private coverage should note many life insurance policies specifically exclude deaths resulting from war. For this reason, private life insurance may not be the best choice for all veterans.
How to Convert a Government-backed Policy Into a Private Policy
People with VA life insurance have the option to convert their coverage to a commercial insurance policy in certain circumstances. The process is straightforward, but there are some risks and changes to consider.
For both SGLI and FSGLI policies, the conversion option is available for 120 days after the service member separates from the military. Veterans with VGLI can convert their coverage at any time. To get started, contact the Office of Servicemembers’ Group Life Insurance to request a conversion notice. Then, reach out to a trusted agent for help finding a private policy.
A major advantage of conversion is that it allows military personnel to acquire private coverage without needing to provide evidence of good health. That means this option is available to veterans with severe service-connected disabilities who might not otherwise be eligible for private coverage.
However, there are some potential drawbacks to consider. VA policies can only be converted into permanent life policies, not term life policies, and the conversion option is not available for child policies. In addition, supplemental benefits sold by life insurers like accidental death and dismemberment riders are excluded from the conversion program.