What is Veterans’ Group Life Insurance?
The Office of Veterans Affairs (VA) offers Veterans’ Group Life Insurance (VGLI) to former/current servicemembers and veterans. One of these instances must be true to qualify for VGLI:
1. You have part-time SGLI as a member of the National Guard or Reserve and you suffered an injury or disability while on duty, including direct traveling to and from duty, that disqualified you for standard premium insurance rates.
2. You have SGLI while you are in the military, and you are within 1 year and 120 days of being released from an active-duty period of 31 or more days.
3. You are within 1 year and 120 days of retiring or being released from the Ready Reserve or National Guard.
4. You are within 1 year and 120 days of assignment to the Individual Ready Reserve of a branch of service or to the Inactive National Guard. This includes members of the United States Public Health Service Inactive Reserve Corps (IRC).
VGLI is only a term product, and you can get between $10,000 and $500,000 in coverage. The amount you can get is based on how much SGLI coverage you had when you left the military. You can increase your coverage by $25,000 every 5 years, up until your full coverage reaches $500,000 and until you reach the age of 60.
You need to apply for VGLI within 1 year and 120 days of leaving the military. If you sign up within 240 days of leaving the military, you do not need to prove you are in good health. If you sign up after the 240-day period, you will have to submit evidence that you are still in good health. You can apply for VGLI through the Prudential website or apply by mail or fax on the SGLV 8714 form.
The rates for VGLI will be cheaper than most, if not all, permanent policies since it is a term product only. The rates for VGLI are based on your age and the amount of coverage you want. Your gender is irrelevant, and rates are the same whether you use tobacco or not. You can make your premium payments monthly, quarterly, semiannually, or annually. If you pay annually, your premium will be discounted 5%.
Pros:
-Can convert your VGLI policy to a whole life policy but only with certain carriers
-Cheaper option when compared to whole life, such as VALife or from another insurance carrier
-Can be renewed every 5 years and will not terminate, if premiums are paid
-Comes with an Accelerated Benefit Option (ABO)
-Able to receive more coverage amount than typical permanent policies
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-Cannot be excluded if you have had mental health issues or PTSD or TBI
-Does not contain a suicide exclusion or a war clause
-No enrollment or membership fees
Cons:
-You are only able to be covered for the same amount of coverage you had with SGLI, until 5 years has passed
-Premiums will increase if policy is renewed
-Does not accumulate cash value like a permanent policy
-Can only received coverage up to $500,000
-Does not come with living benefits that most insurance carriers offer
VGLI has its benefits but also has its setbacks. One thing that makes VGLI great to get into is the fact that you can be in poor health but still qualify if you apply within that certain time period. Whether it is right for you depends on what you want to receive with your insurance policy. Not all policies are the same and many have different options that VGLI does not offer.
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 VGLI, call the Office of Servicemembers’ Group Life Insurance (OSGLI) at 800-419-1473 or email the Prudential Insurance Company at [email protected].