Although all life insurance benefits provide a safeguard for your family and loved ones, military life insurance benefits provide essential coverage specifically tailored to the unique needs and risks of servicemembers.
As you consider how much coverage you need, let’s take a look at the types of military life insurance available, how the benefits work, and the steps you need to take to choose a policy that fits your family’s future.
Understanding Military Life Insurance Benefits
Military life insurance policies have specific benefits designed to protect servicemembers and their families by providing financial support in case of death or severe injury. These benefits are structured to address the unique risks associated with military service and offer coverage options tailored to these needs.
Military policies often come with lower premiums and higher coverage limits, and they ensure access to resources such as transitional assistance and injury compensation.
Types of Military Life Insurance Benefits
Military life insurance programs address different stages and needs in military life, ensuring tailored coverage options for servicemembers, Veterans, and their families.
Servicemembers’ Group Life Insurance (SGLI)
Servicemembers' Group Life Insurance is a life insurance program offered to active-duty military members, reservists, and eligible National Guard members, providing affordable and comprehensive coverage. To qualify for SGLI, you must meet at least one of the following:
- An active-duty member of the United States military.
- A commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS).
- A cadet or midshipman of the U.S. military academies.
- A member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises.
- A member of the Ready Reserve or National Guard, assigned to a unit and scheduled to perform at least 12 periods of inactive training per year.
- A volunteer in an Individual Ready Reserve (IRR) mobilization category.
With SGLI, servicemembers can receive up to $500,000 in life insurance benefits at competitive rates, with premiums automatically deducted from their pay for convenience. At the automatic deduction rates, the minimum policy amount for $50,000 of life insurance is $4 per month, and the maximum $500,000 policy costs $24 per month.
The policy is designed to cover the unique risks associated with military service, including combat and hazardous duty, and offers an option to include Traumatic Injury Protection (TSGLI) that provides financial assistance in case of severe injury.
Veterans’ Group Life Insurance (VGLI)
Veterans' Group Life Insurance (VGLI) is a program that allows former servicemembers to convert their SGLI coverage to a civilian life insurance policy when they transition out of the military.
VGLI ensures that Veterans can maintain their life insurance without needing a medical exam if they enroll within 240 days of leaving service, although applications are accepted up to one year and 120 days afterward, with proof of good health required.
Coverage can match the amount held under SGLI and offers renewable term life insurance, providing ongoing protection as Veterans adjust to civilian life.
Disabled Veterans may be eligible for an extension of their SGLI coverage. Depending on your disability, you may qualify to keep your SGLI coverage for up to two years from the date you leave the military. However, to qualify, you must be within two years of your separation date and meet at least one of the following criteria:
- At the time of your discharge, you are totally disabled and unable to work OR
- You’ve had one of the following:
- Total hearing loss in both ears
- Loss of speech that leaves you unable to talk or whisper without assistance from an artificial device
- Permanent loss of use of hands, feet, or eyes; or one hand and one foot; or one hand or foot and one eye
If you qualify, you can apply for the Servicemembers’ Group Life Insurance Disability Extension (SGLI-DE). If approved, your coverage will be extended for 20 months after your separation date.
At that time, you’ll receive a letter reminding you that your SGLI-DE will be ending, and you’ll have to convert your policy to the VGLI plan to maintain your military life insurance benefits. VGLI has no medical underwriting requirements, and you can stay enrolled in VGLI for life as long as you pay the premiums.
Family Service Member’s Group Life Insurance (FSGLI)
Family Servicemembers' Group Life Insurance (FSGLI) is an option that provides life insurance coverage for spouses and dependent children of servicemembers enrolled in SGLI.
FSGLI offers up to $100,000 of coverage for spouses (based on the servicemember's rank and age of the spouse) and $10,000 for each dependent child.
Eligible spouses of servicemembers with SGLI can purchase coverage with premiums deducted from the servicemember's pay, while dependent children are covered automatically at no additional cost.
Traumatic Injury Protection (TSGLI)
Traumatic Injury Protection under Servicemembers' Group Life Insurance (TSGLI) provides financial support to servicemembers who suffer severe injuries due to a traumatic event.
TSGLI offers a one-time payment, ranging from $25,000 to $100,000, depending on the type and severity of the injury, and covers a wide range of conditions, including loss of limbs, sight, hearing, severe burns, and other debilitating injuries.
Coverage is automatically included with SGLI, and payments are designed to help servicemembers and their families manage the immediate costs of recovery, rehabilitation, and adjustments following a traumatic event.
Additional Benefits and Coverage Options
In addition to standard life insurance coverage, military members have access to a range of supplemental benefits that provide added financial support and security. These special features, such as death gratuity and survivor benefits, are specifically designed to address the challenges and risks of military life.
Death Gratuity and Funeral Benefits
The Death Gratuity benefit, which is a tax-free payment of $100,000, is offered to the survivors of servicemembers who die while on active duty or in certain training situations.
This benefit is additional to any life insurance payouts, and helps families cover immediate expenses after a loss. Furthermore, the military offers funeral and burial benefits, including assistance with burial costs, transportation, and memorial services, ensuring that families receive dignified support during such challenging times.
Survivor Benefits and Financial Counseling
To help families navigate the financial implications of losing a loved one, military life insurance policies often include survivor benefits and complimentary financial counseling. Survivor benefits provide ongoing financial assistance, including access to certain military benefits such as base housing, healthcare, and educational resources.
Additionally, financial counseling services are available to help beneficiaries understand and manage their insurance payouts and benefits, empowering families to make informed decisions about their future.
Life Insurance Riders
These additional provisions or options can be added to a base life insurance policy to enhance or customize coverage. Life insurance riders allow military members to adapt their life insurance to better protect their families, addressing specific needs that go beyond standard civilian coverage. For example, some policies may include accidental death benefit riders, which offer an enhanced payout in case of accidental death, a particularly relevant feature for those serving in high-risk environments.
Frequently Asked Questions About Military Life Insurance Benefits
These FAQs address the most common inquiries to help servicemembers and their families make informed decisions about their life insurance options and coverage needs.
Can I Keep My Life Insurance Benefits After Leaving the Military?
No, you must either convert your SGLI policy to a VGLI policy or seek coverage from the private market to maintain life insurance coverage after leaving the military. Fortunately, servicemembers have options from military-focused nonprofit organizations like AAFMAA that provide coverage while serving that they can keep after their SGLI is terminated that is more affordable and includes significant benefits beyond life insurance.
How Does Military Life Insurance Compare to Civilian Life Insurance?
Military life insurance is generally more accessible than civilian life insurance. Active-duty servicemembers are automatically enrolled in SGLI, which provides low-cost coverage without medical exams beyond those required to serve, making it an easy choice for military families. Additionally, SGLI includes special protection options, such as TSGLI, designed to support military members and their families in case of traumatic injuries.
Private life insurance, however, offers more flexibility in policy customization, term options, and coverage amounts, making it a valuable complement or alternative, especially for Veterans transitioning out of service. Coverage from a military-focused nonprofit organization like AAFMAA provides longer-lasting coverage with far more benefits than SGLI alone.
What Coverage Options Are Available for Reservists and National Guard Members?
Reservists and National Guard members have access to SGLI, which provides affordable life insurance coverage similar to active-duty personnel. Coverage continues during periods of active duty, drill, and training, with premiums deducted automatically when in active service.
Additionally, they may be eligible for VGLI upon leaving service, allowing them to maintain coverage as civilians. FSGLI is also available, offering additional coverage for spouses and dependents, ensuring comprehensive protection for their families. Life insurance policies from military-focused nonprofit organizations like AAFMAA also cover all Reservists and National Guardsmen.
Choosing the Right Military Life Insurance Plan
When evaluating and selecting a military life insurance plan, it’s important to consider several key factors to ensure the coverage aligns with your family’s specific needs.
Start by assessing your family’s financial situation, including existing savings, debts, and future goals such as education or homeownership. Your stage in life is also an important determinant. For example, a young, single servicemember might need less coverage than someone with a family and dependents who rely on their income.
Additionally, health considerations, both current and anticipated, should influence your choice.
Consider AAFMAA for Your Life Insurance Coverage
While SGLI is a solid and affordable term life insurance program for servicemembers, it does have its limitations. Depending on your situation, you will likely need more coverage than SGLI offers, or you may want a permanent life insurance policy that builds cash value you can use in the future.
Additionally, when you leave the military, and your SGLI coverage runs out, your AAFMAA policy will remain in force at a significantly more affordable rate than VGLI. Veterans who choose AAFMAA over VGLI for the remainder of their earning years can typically save tens of thousands of dollars in premiums.
Talk to an AAFMAA Membership Coordinator to learn how our life insurance programs can meet your family’s specific needs. Get a free online quote and contact us at 800-522-5221 today to get started.
This article was originally published December 26, 2021.