SGLI Pros and Cons
What is SGLI?
Servicemembers Group Life Insurance or SGLI is a low-cost military life insurance benefit offered to those on active duty, with options for qualifying Guard and Reserve members and other qualifying groups.
Life insurance is meant to help the survivors of a family member who dies; SGLI offers multiple types of life insurance coverage for various circumstances.
SGLI is offered to those who meet the following criteria:
- Active-duty Army, Navy, Air Force, Space Force, Marines, or Coast Guard.
- Commissioned National Oceanic and Atmospheric Administration members
- U.S. Public Health Service.
- Members, cadets, and midshipmen of the Reserve Officers Training Corps.
- Ready Reserve member.
- National Guard member assigned to a unit and scheduled to perform at least 12 periods of inactive training per year.
- Individual Ready Reserve members.
- Those in non-pay status with the Guard or Reserve who are drilling for points and not pay, and who are scheduled for 12 inactive training periods in the current year.
This group life insurance option is automatic; if you qualify the Department of Veterans Affairs signs you and your family up the moment you are eligible. Benefits include:
- Coverage up to the top limit of $500,000—in $50,000 increments
- 120 days of free coverage from the servicemember’s separation date
- Extension of free coverage for up to 2 years (if you’re totally disabled) when you leave the military.
- Part-time coverage for eligible Reservists
Other VA Insurance Options
VA.gov offers additional life insurance programs including:
- Veterans Affairs Life Insurance (VALife): offered to veterans aged 80 or under who have a service-connected disability rating (0-100%). There are no health requirements for VALife and no time limit to apply.
- Veterans’ Mortgage Life Insurance (VMLI): offered to veterans under age 70 with severe service-connected disabilities who received a VA Specially Adapted Housing (SAH) grant.
SGLI Pros and Cons
There are definite advantages and a few disadvantages to having SGLI. The pros include the $500k coverage for the service member. The cons include having a much lower coverage amount for spouses and children.
- Enrollment is automatic for those who qualify.
- No physical required.
- Wartime coverage is not excluded.
- Flat rate insurance premiums regardless of being a smoker or non-smoker.
- Servicemembers are automatically covered for up to $500 thousand but you may be required to opt-in for the maximum amount.
- Qualifying family members are automatically enrolled when the servicemember is enrolled.
- SGLI coverage is offered in $50,000 increments.
- Payments are automatically deducted from the servicemember’s paycheck.
- Children are covered without charge for up to $10,000.
- Family SGLI coverage for spouses is far lower than for service members.
- SGLI increased to $500 thousand for service members in 2023, but no coverage was increased for spouses or children.
- SGLI ends when you retire or separate from military service, though you will have extended time to find other coverage once your retirement or separation date passes.
- Service members who choose to 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 VA.gov.
- Your life insurance needs may change over time, and the options you are offered at the start of your military career may not be enough later.
- Military spouses qualify for “…a maximum of $100,000 of coverage for you as a spouse, not to exceed your service member’s SGLI coverage.”
- There is a coverage limit of $10,000 for each dependent child.
The problem facing most who use SGLI and the family equivalent, FGLI, is that the coverage simply may not be enough to cover industry-recommended expenses in the wake of a family member’s death.
Do You Need Extra Life Insurance?
There are three basic ways to get extra life insurance to shore up coverage for spouses and dependents.
These include using FGLI as mentioned above, getting additional coverage through an employer, or applying for coverage on your own through a commercial life insurance company.
Service members may decide they need additional coverage too. The current $500 thousand maximum benefit may not be enough to cover paying off a mortgage, future college debt, and current credit card debt on top of funeral expenses and other costs.
Read more: Is $500,000 Enough Life Insurance?
About the author
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.