What is Veterans’ Mortgage Life Insurance?

Veterans’ Mortgage Life Insurance (VMLI) offers mortgage protection insurance to families of veterans with severe service-connected disabilities. You must be a service member or veteran. This is another type of life insurance that the U.S Department of Veterans Affairs (VA) offers.

To be eligible, you must meet all the following requirements:

1. You must have a severe disability that was caused or worsened by military service.

2. You received a Specially Adapted Housing (SAH) grant to buy, build, or make changes to a home to live more independently.

3. You have a mortgage on the home.

4. You are currently under 70 years of age.

With VMLI, you have up to $200,000 worth of mortgage life insurance which will be paid directly to a bank or lender that holds your mortgage. That means the full amount of your insurance policy will not go to any beneficiary. The amount of coverage will equal the amount you owe on your mortgage, not to exceed $200,000. This policy type is known as a decreasing-term insurance. Your coverage amount goes down as you pay more of your mortgage down. Your VMLI coverage will end when you pay off your mortgage. There is no cash value accumulation since it is deemed a term insurance policy.

To even be eligible for VMLI, you must apply for a Specially Adapted Housing (SAH) grant. This grant helps disabled veterans and service members with barrier-free living, such as a wheelchair accessible home. Once you are approved for this grant, your loan guaranty agent will inform you if you qualify for VMLI.

The premium for a VMLI policy is dependent on your age, the current balance of your mortgage loan, how many mortgage payments you have left to pay, and the amount of total coverage you need. The home you want covered must be your primary residence.

Now, this type of life insurance is much different than what I would offer as a “mortgage protection” policy. The severe downside with VMLI is that there is absolutely no money going towards a beneficiary when you pass away. You want your family member, child, spouse, or whoever you deem to be a beneficiary to receive some money from your policy when you pass away. That is how they can survive financially without your paycheck coming in, especially if you are the one providing the primary source of income.

Also, the policy goes away once your mortgage is paid off so you could have put a substantial amount of money in this policy that never even gets used. If you have a VMLI policy, it would be very wise to have another life insurance policy that will last for much longer and provide money to your beneficiary in the event of your passing.

The only reason I see this policy being beneficial is if you are unable to qualify for another policy that can cover your mortgage if you pass away. This means that whatever disability you received, or was made worse, by the military would have to prevent you from being qualified with another insurance carrier. Even if this is the case, you can apply for a guaranteed acceptance policy because your current health status is not looked at during the application process.

If you want to see what life insurance is available, 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.

Specially Adapted Housing Grant information

https://www.va.gov/housing-assistance/disability-housing-grants/how-to-apply/

Veterans’ Mortgage Life Insurance information

https://www.va.gov/life-insurance/options-eligibility/vmli/