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Life Insurance for Veterans: Cost and Essential Considerations

The Department of Veterans Affairs (VA) offers affordable benefits to ex-service members and active military personnel. As of January 1st, 2023, the VA introduced VALife insurance to extend benefits to more veterans with service-related disabilities. Veterans may choose to convert their group life insurance policies provided by the VA to a participating private insurer or go through the application process of a non-participating commercial life insurer.

Key takeaways:

Do veterans have life insurance?

There are numerous benefits for military service provided through the Department of Veterans Affairs (VA), including guaranteed home loans, pensions, health care, vocational rehabilitation, education and training, and more. The VA provides life insurance for veterans at affordable rates. Veteran life insurance from the VA includes Veterans Group Life Insurance, and as of January 2024, the VA offers veterans life insurance through the new VALife insurance program.

The U.S. Military offers life insurance options while enlisted. If you have a private life insurance policy, the policy will remain in force while you are a service member as long as the premiums are paid. It's essential for those serving in the military to consider their commercial life insurance policy's exclusions.

Private life insurance policies have standard policy exclusions that prevent the benefit from paying out if met. Common policy exclusions include:

  • War
  • Aviation
  • Suicide
  • Dangerous occupations and hobbies
  • The death occurred while committing a felony

Most private life insurance policies will not pay the benefit amount to your beneficiaries if your death is a direct result of war. Veterans and service members who have Servicemembers' Group Life Insurance (SGLI), Family Servicemembers' Group Life Insurance (FSGLI), and Veterans' Group Life Insurance (VGLI) provided by the VA can convert their insurance policy to a commercial whole life insurance policy if they meet the required conditions.

Military life insurance

Life insurance policies offered through the VA include Servicemembers' Group Life Insurance, Family Servicemembers' Group Life Insurance, and Veterans' Group Life Insurance. These programs, provided through the VA, are low-cost solutions for eligible service members. These policies may be converted to private (civilian) life insurance when the necessary conditions are met.

Servicemembers' Group Life Insurance

SGLI provides affordable life insurance coverage from $50,000 to $500,000 to service members. Service members are automatically signed up if they meet the eligibility requirements, and premiums are deducted monthly from their base pay.

Premiums are based on the benefit amount at six cents for every $1,000 in coverage. Traumatic Injury Protection (TSGLI) is automatically included in SGLI policies for $1 a month. TSGLI offers temporary financial coverage when service members are recovering from traumatic injuries. Service members may choose their SGLI coverage amount and beneficiaries, and they may also decline coverage entirely.

When service members leave the military, they can convert their policy to a VGLI policy within one year and 120 days. They may also convert their policy to a commercial whole life insurance policy from participating companies within 120 days of leaving.

Veterans Group Life Insurance

Military service members may apply for a VGLI policy within one year and 120 days of leaving service. VGLI provides term life insurance coverage from $10,000 up to $500,000. A medical exam is unnecessary if you sign up within 240 days of leaving. The coverage amount of your policy and age determines premiums. VGLI policies may be converted to a private whole life insurance policy through a participating commercial carrier without evidence of insurability.

Family Servicemembers' Group Life Insurance

Spouses and dependent children of service members are eligible for FSGLI if full-time SGLI covers the service members and are on active duty or a National Guard or Ready Reserve member.

Spouses can receive a maximum benefit of $100,000, and coverage cannot be more than the amount of the service member's SGLI policy. Spouses may also convert their FSGLI policy to a private commercial participating policy within 120 days of:

  • Service member leaving service
  • Divorce
  • Service member's death
  • Written notification to terminate Spousal SGLI or SGLI coverage

Spouses married before January 2, 2013, will be automatically covered, and premiums will be deducted from the service member's pay. Spouses married after that must be signed up by the service member through online open enrollment. Spousal premiums are determined by age and coverage amounts and increase as you age.

Private insurance for veterans

Veterans are not required to participate in veterans' life insurance programs. They may apply for a non-participating private insurance policy and undergo the application and underwriting process. Or they may choose to convert their VGLI policy to a participating insurer.

Private Insurers base premium rates on the applicant's health, age, and benefit amount of the policy. If approved, private life insurance for veterans over 60 will be significantly more expensive, and life insurance for veterans over 70 may be declined by private insurance carriers. Veterans life insurance policies provided by the VA may be the best options for veterans in these age groups.

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Life insurance for disabled veterans

The VA implemented VALife Insurance in January 2023. VALife covers veterans with service-related disabilities at affordable rates. Service-Disabled Veterans Life Insurance (S-DVI) was offered before December 31, 2022. Veterans with existing S-DVI policies are still covered under the policy and have the option to convert the policy to a VALife Insurance policy.

VALife Insurance 2024

The VA has offered guaranteed acceptance whole life insurance policies since January 2023 in the VALife insurance program. Although acceptance is guaranteed, veterans must meet eligibility requirements. To be eligible, applicants must be age 80 or less and have a VA service-connected disability rating. The percentage of the rating does not matter; it could be 0% as long as you have the rating.

Applicants over 81 may be eligible if they applied for service-related disability before their 81st birthday and got their disability rating after turning 81. Veterans may apply within two years of receiving their rating.

VALife Insurance offers coverage in increments of $10,000 with a maximum benefit of $40,000. Cash value accrues two years after acceptance. The death benefit is graded because VALife is a guaranteed acceptance whole life policy.

A graded death benefit has a waiting period before the benefit can be paid. A VALife insurance policy has a waiting period of two years. If the insured passes away after the waiting period ends, the policy will pay the entire benefit amount to the policy's beneficiaries. If the insured dies before the end of the waiting period, beneficiaries will receive all the premiums paid with interest.

Service-Disabled Veterans Life Insurance (S-DVI)

Veterans with Service-Disabled Veterans Insurance can keep their policy or apply for a VALife Insurance policy. Veterans who apply before December 31, 2025, may keep their S-DVI policy in force until the VALIfe waiting period ends. Veterans who apply on or after January 1, 2026, will lose their S-DVI policy as soon as the VALife coverage is in force.

Veterans' life insurance rates

The VA aims to offer low-cost life insurance products to veterans. VGLI and VALife insurance premiums are determined by the age of the ex-service member and the chosen benefit amount. Whereas VGLI policies are term life insurance products, VALife is a permanent insurance policy. Term life insurance products are generally less expensive than permanent policies.

There are various options for veterans to obtain life insurance coverage upon leaving the military and while enlisted. The VA's mission is to provide affordable coverage for those who have served and serve in the armed forces. They also aim to ensure veterans with service-related disabilities have the necessary coverage, as they may not be insurable to private life insurers. Share your experiences or learn more about life insurance options on Health News.


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