VA to Replace Life Insurance Program in 2023
In 2021, Public Law 116-315 was passed, intended to do many things including the modernization of the VA life insurance program to replace an older version.
In the past, the Department of Veterans offered enrollment options for a life insurance program to veterans with VA-rated disabilities. This insurance, known as Service-Disabled Veterans Life Insurance or S-DVI, was meant to provide affordable life insurance coverage to qualifying vets, offering up to $40 thousand in coverage.
But thanks to Public Law 116-315, that program closes to new enrollments at the end of 2022. In 2023, the VA offers a new life insurance program to replace S-DVI. The new VA program created by the law is called VALife.
What Is VALife?
VALife is described on the VA official site as “guaranteed acceptance” whole life insurance. Whole life insurance is a type of life insurance that is effective as long as the premiums continue to be paid.
That is unlike term life insurance, where the policy has a fixed term that may expire. Coverage amounts under VALife are similar to S-DVI: you may qualify for coverage amounts in $10 thousand dollar increments up to a maximum of $40 thousand.
When Does VALife Become Available?
VALife is offered as of 1 January 2023 and is not open to new enrollments prior to that date.
Who Qualifies For VALife?
You may be eligible for VALife if you are 80 or under and have a VA disability rating, or you applied for VA disability rating before age 81 and received an initial rating after turning 81.
Those who are 80 or younger have no time limit to apply for VALife, but those who are 81 or older must apply within two years ”of receiving a rating for a new service-connected condition applied for prior to age 81.”
VALife has a feature that basically provides limited coverage for the first two years of the plan, with full coverage offered after that. If the veteran dies before the two initial years have passed the beneficiaries get their premiums paid back to them plus interest. If the veteran dies after the two year initial period, the full coverage amount is paid.
Why the two-year “introductory” period? This, according to the VA, is meant to justify eliminating a medical exam or having medical requirements in order to sign up.
Which Disability Ratings Make Me Eligible For VALife?
All Veterans aged 80 and under “who have a VA disability rating of 0 to 100” percent are eligible for the VALife program according to VA.gov.
Do I Have To Switch From S-DVI To VALife?
As mentioned above, S-DVI accepts new enrollments until the end of 2022. In 2023 enrollment options include the ability to switch from S-DVI to VALife. Those who already carry S-DVI and apply for VALife between 2023 and the end of 2025 may carry S-DVI for the two-year introductory period for VALife.
But you DO NOT have to switch out of S-DVI and into VALife. You may keep S-DVI and the coverage will apply as long as you continue paying your premiums. December 31, 2025 is the final day you may apply for VALife while continuing to maintain S-DVI for the two-year intro period.
How Much Does VALife Cost?
VALife premiums are based on the age you are when you enroll. For example, a 20-year-old enrollee would pay just under $12 a month for $10,000 worth of coverage, whereas an 80-year-old enrollee would pay just under $130 for the same amount.
For the full $40 thousand in coverage, that 20-year-old would pay just under $47 per month, while the 80-year-old enrollee pays $510.00 for the same insurance. However, these rates are given as examples only at the VA official site, and these rates are subject to change.