Is the Veterans Affairs Life Insurance (VALife) right for you?

As of January 1, 2023, the U.S. Department of Veterans Affairs (VA) has released what they are calling VALife. This is the newer whole life insurance plan that is replacing the Service-Disabled Veterans Life Insurance (S-DVI). You are eligible for VALife if you have a service-connected disability rating from 0-100% and are considered a veteran.

You are able to receive up to $40,000 in coverage in $10,000 increments. The cash value of your policy starts to build-up after 2 years of making premium payments. It is guaranteed acceptance life insurance which means your application will automatically be approved no matter your health, assuming you meet the eligibility requirements. You must make 2 years of premium payments before your full amount of coverage is effective. If you pass away before that 2 year period, your beneficiary will only receive the amount of payments you made plus some interest, roughly 10%.

The premium amount you will pay is determined by your age and how much you are applying for. Your premiums will never increase, just like with any other whole life policy. If more than?6 months?have passed since your last birthday, you will be considered 1 year older when determining your premium rate. You can surrender the full or partial policy amount in increments of $10,000 for cash value.

If you previously have the Service-Disabled Veterans Life Insurance, you can apply for VALife or you can keep your current plan. As a note, VALife is different than the Veterans’ Group Life insurance (VGLI) because it is a whole life plan; VGLI is only a term policy plan. Also, the premium rates show to be the same for both men and women. Typically, rates for women are cheaper than men. There are also no different rates for tobacco use, much like most guaranteed acceptance plans.

Pros:

-It is a guaranteed acceptance plan

-You can obtain coverage after age 80, most insurance carriers do not cover over age 85

-Your health is irrelevant during the application process

-Application process can all be done online

-Premium rates are for both men and women

-Individuals needing assistance with applying can contact the VA Insurance Center

Cons:

-You can only receive up to $40,000 in coverage

-You cannot take out any loans from your cash value

-Coverage does not start until 2 years of making premium payments

-Premium waivers are not offered

-There is no more information about how cash value accumulates

-Can only pay either monthly or annually

-Cash value can only be used in the event of a policy lapse for extended term insurance

At age 40, if you want to have the full $40,000 of coverage, your monthly premium would be $88. Now if I ran the same age and coverage amount with Royal Neighbors of America, the standard premium rate for a male with no tobacco use would be $52.50 a month. That is a difference of $35.50 a month. So if I was in great health then choosing VALife in this instance probably would not be a wise choice. However, if I was in poor health then it would be something to consider.

At age 50, if you want to have $20,000 worth of coverage, your premium with VALife would be $65 a month. If I am to compare it to a guaranteed acceptance plan with Gerber Life, for a male at the same age, no tobacco use, the monthly premium would be $87.27 a month. In this instance, the cheaper option would be VALife. Guaranteed acceptance plans with your regular insurance providers are known to not be cheap though because they do not look at your health.

Whether VALife is right for you really depends on your health and which option fits your needs better. Your budget will most likely come into play also.

If you want to see what is available to you for life insurance, send me a message here on Linkedin. Keeping you informed about all your options is essential so you can make the best choice for you and your family.

For more information about VALife, you can contact the VA Life Insurance Center at 800-669-8477.

Veterans Affairs Life Insurance (VALife) | Veterans Affairs