Private Life Insurance for the Military Community: A Comprehensive Guide
When you join the military, you are automatically enrolled in SGLI, Servicemembers Group Life Insurance. Military members serving on active duty qualify. Guard and Reserve Troops may also qualify for SGLI if they serve or are scheduled for 12 inactive training periods a year, drilling for points, and not pay.
SGLI is a low-cost life insurance program offered by the VA, purchased through a civilian insurer, and offered to troops in $50 thousand increments up to a maximum coverage amount ($400 thousand at press time.)
This life insurance policy sounds like a great deal to some junior enlisted troops and to those without a lot of household debt. But some need more coverage and more peace of mind.
Read more: What Is VA Life Insurance?
Is SGLI Enough Life Insurance?
Do you wonder if SGLI provides enough life insurance coverage for your needs? Depending on how old you are, how risky your career field is, and whether or not you have a family, private life insurance coverage above and beyond SGLI may be a wise option to consider.
Some servicemembers may qualify for an extension of their SGLI benefits after discharge.
SGLI is not provided for family members. It is offered to the service member only. You may qualify for SGLI as a commissioned, warrant, or enlisted member of the Army, Navy, Air Force, Space Force, Marine Corps, or Coast Guard. You may also qualify in one of the following circumstances:
- As a commissioned member of the National Oceanic and Atmospheric Administration and the U.S. Public Health Service
- As a Cadet or midshipman at one of four United States Service Academies
- As a Ready Reservist performing at least 12 inactive training periods a year
- As part of the Individual Ready Reserve as a volunteer for assignment to a mobilization category
- Part-time coverage is available for qualifying Reserve or ROTC members “who do not qualify for full-time coverage,” according to the VA official site.
Family members and military retirees have their own version of SGLI, as we’ll discover below. There are also private commercially available life insurance options to choose from.
Read more: Who Is Eligible For SGLI?
Military Life Insurance and End-of-Life Planning
End of life planning is important for military members. The stress of deployments, temporary duty, and permanent change of station moves makes it difficult for some to set aside the proper time to ensure there are living wills, financial planning, and pre-need instructions should the worst occur.
Some don’t stop to think about how their surviving family members will be able to claim death benefits, life insurance policies, or other options. Not every family knows where the servicemember’s policies, discharge paperwork, military records, and medical records are kept. That’ is a situation to be avoided at all costs.
What are your wishes for do-not-resuscitate orders, end of life financial arrangements, and the final disposition of your property? If you don’t know, you need to make time to accomplish a variety of tasks including writing a will and doing the math to make sure your military life insurance will be enough to financially protect your loved ones.
Learn more: Military Life Insurance and End-of-Life Planning
Private Life Insurance for the Military Community
Private companies such as AAFMAA offer private life insurance to servicemembers and their families. These options are often not used to replace SGLI or FSGLI but to supplement it. They can also act as a standalone option for those who don’t want SGLI or FSGLI.
These alternate life insurance options are a way to provide for your loved ones if you die. Some options build in tax-deferred cash value “that can be used later in life, such as for higher education, large purchases, or retirement,” according to AAFMAA.com.
You’ll get similar descriptions from other insurer companies such as USAA, which notes, “life insurance is a contract in which you pay premiums, and in return, your beneficiary receives a lump-sum payout when you die.”
A private life insurance beneficiary can use the money to pay for daily expenses, pay off a mortgage, student loans, medical bills, and other costs.
Read more: Does Your Life Insurance Match Your Life?
Life Insurance Benefits for the Military Family: FSGLI
Family Servicemembers Group Life Insurance or FSGLI is an option for military families who want up to 100,000 in life insurance coverage.
- The FSGLI coverage amount cannot be more than the coverage offered vai SGLI, and qualifying dependent children get $10,000 of free coverage.
- Military spouses may be allowed to convert FSGLI to a permanent, individual insurance policy (such as whole life) within 120 days from the date the service member leaves the military, files for divorce, or dies.
- These rules also apply within 120 days of the servicemember canceling their own policy or the FSGLI policy in writing.
Read more: FSGLI for Military Spouses and Dependent Children
Private Life Insurance Options for Military Spouses
Military spouses are not required to carry VSGLI; there are plenty of civilian life insurance options and providers. Coverage options include term life insurance, whole life insurance, and other variants.
When shopping around for a private life insurance provider, consider insurance that can pay for burial and related expenses but also needs above the immediate:
- Annual salary
- Total mortgage balance
- Total revolving debt
- Current or anticipated education expenses for dependents
Related: Tips for Buying Life Insurance
It is smart to use an online life insurance calculator to help you decide on the right coverages. You’ll want to gather the following data to make the most of your planning with an insurance calculator:
- Total mortgage amount
- Estimated total outgoing monthly debt
- College fund expenses
- Total of all investments
- Assets
- Annual income
- Lump sum pension
- Social Security income, where applicable
A life insurance life expectancy calculator is another tool you can use as a military spouse to determine your insurance needs. The younger you are when you start reviewing your life insurance options, the better. Using a life expectancy calculator will show you why.
Read more: Why Use a Life Expectancy Calculator?
Life Insurance for Retired Military: VGLI
Retired military members can apply for VGLI or Veterans Group Life Insurance when they prepare to retire or separate.
VGLI is a renewable term life insurance policy allowing you to continue similar life insurance coverage to what you had in uniform under Servicemembers’ Group Life Insurance.
What is the benefit of VGLI? Unlike typical life insurance policies, VGLI does not require a health screening. However, this option is only good when applying within 240 days of separation from the military.
VGLI offers the opportunity to increase your life insurance benefit amount over time or convert your VGLI term life policy into a commercial permanent life insurance policy. You can do this without a physical if you qualify.
Read more: Veterans Group Life Insurance
Private Life Insurance For Military Retirees and Veterans
VGLI is not the only life insurance option veterans and retirees have. You can choose from a variety of civilian or privately operated insurance options, which may include one or more policy types:
- Term Life Insurance
- Permanent Life Insurance
- Universal life insurance
- Variable life insurance
- Final expense life insurance
Read more: 5 Types of Life Insurance
Private Life Insurance Issues: Getting Coverage With PTSD
Why single out a specific condition for a “Do I qualify?” type question? PTSD has been one of the more controversial diagnoses when it comes to getting insurance approved or denied. Some insurers have denied life insurance applicants based on a PTSD diagnosis on the one hand, but on the other, say that each decision to approve or deny is done on an individual basis where PTSD and other medical issues are concerned.
When searching for life insurance, you’ll want to shop around for a provider just as intently as when you search for other types of insurance. Read the reviews, note any relevant complaints, and don’t trust vague reviews with few specifics. You’ll want an insurer and an insurance agent with experience reviewing applicants with PTSD or any other specialized medical issue you may have.
Read more: Can I Get Life Insurance With PTSD?
No Medical Exam Life Insurance
Do you want to apply for a commercial life insurance policy but don’t want to submit to a medical exam? A variety of private companies offer no medical exam life insurance plans for qualifying military members, retirees, and veterans. These options are offered in various ways depending on the company, and you may find that researching the coverages early is best due to the sheer number of choices.
Don’t wait until you are about to depart the military to explore the plan that’s right for you. Read more: No Exam Life Insurance
The Moment of Need: Reporting the Death of the Veteran
When a veteran dies, the surviving spouse or other loved ones must report the death to the Department of Veterans Affairs, private healthcare insurers and any applicable private life insurance providers. Report as quickly as possible to prevent overpayment of VA benefits, healthcare benefits, or other payments intended for the veteran while they were still alive.
Reporting procedures for the VA may vary greatly from those in the private sector and you’ll need to following the requirements for both to the letter for best results during your claim.
Learn more: Military Life Insurance: Reporting the Death of a Veteran
Private Life Insurance Options for Veterans: Are They Necessary?
There are some issues to consider when considering private life insurance coverage. For example, Family SGLI coverage for spouses is lower than for service members.
SGLI increased to $500 thousand for service members in 2023, but no coverage was increased for spouses or children. Other issues to think about when contemplating private life insurance:
- SGLI ends when you retire or separate from military service. Troops typically get extra time to find other coverage once the retirement or separation date passes.
- Service members who decline SGLI coverage after the automatic increase to $500,000 went into effect “no longer have spouse or dependent child coverage as of the first day of the month following their declination,” according to the Department of Veterans Affairs.
- SGLI may not be enough for military families with a lot of revolving debt, student loans, or other financial issues.
The problem facing most who use SGLI and the family equivalent, FGLI, is that the coverage simply may not be enough to cover all expenses after the service member’s death.
Read more: Is SGLI Enough for Military Families?
Cost of Private Life Insurance Benefits
Forbes.com reports, “Life insurance costs an average of $13 a month ($159 a year) for a 20-year, $250,000 term life insurance policy for a man aged 30 and $12 a month ($142 a year) for a woman aged 30…”
Those numbers are for private life insurance benefits for military members. The VA SGLI rates are reported by VA.gov at “6 cents per $1,000 of insurance coverage” at press time. This amount is always subject to change due to alterations in VA policy, federal law, or other variables.
Related: Military Benefits Guide
Transitioning from Government Life Insurance to Private Life Insurance
VA.gov says you may transfer existing life insurance policies (SGLI, VGLI, FSGLI, etc.) to an individual life policy “without the need to provide evidence of good health.” According to VA.gov, the following rules apply when transferring a VA life insurance policy to a private life insurance option such as those provided by AAFMAA.com.
- If you have SGLI coverage, you have 120 days from your date of separation to convert your coverage.
- If you have FSGLI coverage, you have 120 days from the following events to convert your coverage: the date the service member separates from service, the date of divorce from the service member, the date of the service member’s death, or the date the service member terminates SGLI coverage or the spouse’s FSGLI coverage.
- If you have VGLI coverage, you may convert your coverage at any time. VA.gov says, “Child coverage is not eligible for conversion. Only spouses can convert FSGLI coverage.”
Not all life insurance companies may be willing to convert your policy from SGLI or FSGLI, etc. It will be necessary to discuss your needs with the provider of your choice to see what’s possible for policy conversion or creating a new life insurance policy.
There are also plenty of commercial options if you don’t mind proving you are in good health and are willing to go through that company’s screening process. These options are typically available independently of VA resources.
Read more: VA Life Insurance Policy Options
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About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
