Military Life Insurance | Best Options For Active Duty + Veterans
last updated on December 2, 2020Your service in the military can affect your life insurance options, but coverage is not out of reach.
Because you are inherently placed in higher-risk situations due to the nature of the job, carriers have specific underwriting criteria based on your experience in the armed forces.
Everything you need to know about buying military life insurance is found here, including the different options for active duty and veterans, underwriting concerns, and the best companies to apply with.
Table Of Contents
Life Insurance For Military
You CAN secure life insurance coverage for your loved ones – whether you are active duty or a veteran.
As you likely know, some coverage is included during your active duty years and is optional during your retirement years – in the form of group life insurance, a type of no exam life insurance.
Beyond the group life insurance (e.g. SGLI), if you are in need of additional coverage (and most are) – the type of policy, face amount, and premium rate you can secure are all dependent on a number of factors, including:
- Active duty or veteran
- Deployment
- Rank
- PTSD
Active Duty
There are seven primary things active duty military members need to analyze pertaining to their life insurance needs.
First, a number of financial protective measures are provided as a benefit of serving in the military:
- SGLI
- Family SGLI
- Death Gratuity
- Survivor Benefit Plan
Second, for many service members, it is a good idea to look into additional life insurance protection options:
- Common underwriting factors for service members
- Term life insurance
- Whole life insurance
1. SGLI
Fortunately, as an active duty military member, life insurance coverage is typically automatically offered via SGLI, or Servicemembers’ Group Life Insurance.
Servicemembers’ Group Life Insurance (SGLI) offers low-cost term coverage to eligible service members.
– U.S. Department of Veterans Affairs
What does SGLI offer?
Life insurance benefits through an SGLI policy include:
- Coverage in $50,000 increments, up to $400,000
- If you separate from the military, 120 days of free coverage
- Up to two years of coverage extension if you are totally disabled
- Part-time coverage if you are a Reserve member not eligible for full-time coverage
Do I qualify?
Most do.
According to the Department of Veterans Affairs, you must be one of the following:
- Active duty member of Air Force, Army, Coast Guard, Marines, or Navy or
- Commissioned member of the National Oceanic and Atmospheric Administration or the U.S. Public Health Service or
- Cadet or midshipman of the U.S. military academies or
- Member, cadet, or midshipman of Reserve Officers Training Corps engaged in authorized training or
- Member of the Ready Reserve or National Guard, assigned to a unit that is scheduled to perform at least 12 periods of inactive training yearly or
- Volunteer in an Individual Ready Reserve mobilization category
How much does SGLI cost?
Your premiums are automatically taken out of your base pay.
For a general idea of cost, consider the following rates:
SGLI Rates
| Face Amount | Monthly Premium |
|---|---|
| $50,000 | $3 |
| $100,000 | $6 |
| $150,000 | $9 |
| $200,000 | $12 |
| $250,000 | $15 |
| $300,000 | $18 |
| $350,000 | $21 |
| $400,000 | $24 |
Note – For an extra $1 per month, SGLI includes a Traumatic Injury Protection coverage (TSGLI).
Is SGLI enough?
Often, it is not.
While SGLI is an excellent built-in life insurance program for service members, it is a good idea to conduct a needs analysis to determine if $400,000 will cover the financial needs of your loved ones.
- Mortgage
- Debts (e.g. credit card, car loan)
- Living expenses (e.g. groceries, utilities)
- College tuition for dependents
Likely, you will discover that it makes sense to look into additional coverage options.
A great place to start: best no physical life insurance companies.
2. Family SGLI
Service members with a full-time SGLI policy have the option to purchase coverage for a spouse (dependent children are automatically enrolled) under the Family Servicemembers’ Group Life Insurance (FSGLI).
What does FSGLI offer?
Life insurance benefits through an FSGLI policy include:
- Up to $100,000 in coverage for a spouse
- $10,000 in coverage for each dependent child for free
Who qualifies for FSGLI?
If you are enrolled in a full-time SGLI policy, and have a civilian spouse, your spouse will be automatically enrolled in the FSGLI program – if you were married before January 2, 2013.
If you were married on or after January 2, 2013, your spouse will not be automatically enrolled – you will need to sign up for FSGLI coverage.
Coverage for a dependent child is automatic.
Concerning dependent children:
This coverage can’t be turned down, reduced, or canceled.
– U.S. Department of Veterans Affairs
How much does FSGLI cost?
Premium rates increase with your spouse’s age.
FSGLI Rates $100,000 in Coverage
| Age | Monthly Premium |
|---|---|
| Under 35 years | $4.50 |
| 35 - 39 years | $5.30 |
| 40 - 44 years | $7.00 |
| 45 - 49 years | $10.00 |
| 50 - 54 years | $17.00 |
| 55 - 59 years | $29.50 |
| 60 years and older | $45.00 |
Note – smaller face amounts (policy size) are available. Policies start at $10,000 and increase in increments of $10,000.
Is FSGLI enough?
Pertaining to your spouse, typically no. (Life insurance for a dependent child is a personal choice.)
Just like the SGLI policy, FSGLI offers affordable life insurance coverage.
It is likely, however, that your spouse needs more than the capped coverage amount of $100,000 to be adequately covered.
3. Death gratuity
Separate from SGLI, the Department of Defense provides a death gratuity specifically for deaths occurring while on active duty.
The death gratuity program provides for a special tax free payment of $100,000 to eligible survivors of members of the Armed Forces, who die while on active duty or while serving in certain reserve statuses.
– Department of Defense
Its intent is to offer an immediate cash payment of $100,000 to survivors of the deceased to meet the urgent financial needs before other monetary benefits (e.g. death benefit of life insurance) are paid.
There are specific requirements to be eligible for the gratuity. Death must occur under one of the following circumstances:
- While on active duty
- Serving in certain reserve statuses
The cause of death does not affect the death gratuity.
In addition, the death gratuity is payable if death occurs within 120 days of release or discharge from active duty – if it is determined that death occurred as a result of injury or disease from the active duty.
Active duty members may designate an eligible survivor of their choosing at any time. Eligible survivors include:
- Spouse
- Surviving children
- Parents
- Executor or administrator of the estate
- Next of kin
Gratuity payments can be divided by 10% increments.
4. Survivor benefits
The Department of Defense also offers a plan called the Survivor Benefit Plan (SBP).
The SBP is a means to protect military retired pay.
The program provides up to 55% of a service member’s retired pay to eligible beneficiaries upon the death of the service member.
Eligible beneficiaries include:
- Spouse
- Former spouse
- Children, spouse excluded
- Children only, no spouse
- Insurable interest*
*Insurable interest means that someone can demonstrate a financial loss as the result of your death.
Structured as a lifetime annuity, the Survivor Benefit Plan (SBP) pays a monthly income to the beneficiary that will adjust for inflation.
5. Underwriting factors
If you decide to purchase life insurance coverage beyond what is offered through the military, and many do, you will want to be familiar with key underwriting factors that may impact your application.
Underwriting is the process of risk assessment life insurance companies utilize to determine if an applicant qualifies for coverage and, if so, how much to charge for the policy.
Depending on the carrier you apply with, and type of policy you want, you may be asked about the following:
- What is your specific job title, and associated duties?
- Will you be exposed to combat or hazardous situations?
- Are you a member of a special operations force?
- Do you have deployment orders or are you currently deployed?
- Is deployment to a country in which the U.S. Department of State has issued a Level 4 travel advisory?
Further, many life insurance companies include what is called a “war exclusion clause”.
Clauses, which are stipulations, are commonly found in the fine print of a policy as a means to protect the solvency of a life insurance company.
While the verbiage differs among carriers, the war exclusion clause generally states that a death benefit will not be paid if death occurs as the result of an act of war or terrorism.
Bottom line – active duty military can still find coverage despite some underwriting “red flags”.
It’s in your best interest to work with an independent agent who will access the carriers that underwrite military life insurance favorably.
6. Term life insurance options
Term life insurance is the most common form of coverage military members look at beyond what is inherently offered through their service.
Why? Term offers the most bang for your buck.
You can secure a large face amount with affordable premiums – to protect your family during the time when they need it most.
Term policies last for a specific period of time. You will want to buy a policy that will last as long as loved ones depend on you (e.g. until your children reach adulthood).
Additionally, a wide range of face amounts are available, from modest to massive.
7. Whole life insurance options
For some, it makes sense to purchase a policy that will not end.
Whole life insurance, as long as you pay your premiums, will pay a death benefit regardless of when you pass away.
There are a few components to a whole life policy:
- More expensive than term
- Policy loan option
- Policy withdrawal option
- Permanent protection
Just like term, armed forces members can buy a private whole life insurance policy while on active duty.
And, just like term, some carriers are better suited for military members – an independent agent is recommended.
Bottom line – the primary goal of life insurance is to financially protect those who depend on you. Often, that means purchasing life insurance beyond what the military provides.
Veterans
As you separate from the military, it’s necessary to revisit your life insurance options and needs.
First, it is important to note that life insurance offered through the military, via SGLI, is not portable.
What does that mean? As you separate from the military, your SGLI policy cannot follow you.
Second, the SGLI policy can, however, convert into other forms of coverage.
Through its conversion options, the military does continue to provide some life insurance choices for its veterans.
Third it may make sense for veterans to carry a combination of coverage via the military and a private carrier.
1. SGLI to VGLI
Many service members opt to convert their SGLI policy to a VGLI policy – Veterans’ Group Life Insurance.
With Veterans’ Group Life Insurance (VGLI), you may be able to keep your life insurance coverage after you leave the military for as long as you continue to pay the premiums.
U.S. Department of Veterans Affairs
What does conversion mean? Thinking of converting a policy as transferring your coverage from one form of life insurance to another form.
In this case, you are “transferring” your SGLI policy to a VGLI policy.
What does VGLI offer?
A Veterans’ Group Life Insurance policy provides $10,000 to $400,000 in life insurance coverage. Your VGLI face amount is dependent on the amount of SGLI coverage you had in place.
VGLI is a form of renewable term life insurance:
- Coverage lasts as long as you want
- Rates increase every five years
- No cash value
Note – you do have the option to increase your VGLI coverage by $25,000 every five years, up to age 60 (maximum of $400,000).
Do I qualify?
Probably.
You must own a SGLI policy and apply within the allotted timeframe.
The U.S. Department of Veterans Affairs states that you must apply for VGLI within one year and 120 days of leaving the military.
Note – VGLI coverage is offered via the Office of Servicemembers’ Group Life Insurance (OSGLI), which currently partners with Prudential Financial.
How much does VGLI cost?
Different than SGLI, a VGLI policy’s rates are based on age.
For a general idea of cost, consider rates for the maximum amount of coverage you can secure – $400,000.
VGLI Rates $400,000 in Coverage
| Age | Monthly Premium |
|---|---|
| Age 29 and below | $32 |
| 30 - 34 years | $40 |
| 35 - 39 years | $52 |
| 40 - 44 years | $68 |
| 45 - 49 years | $88 |
| 50 - 54 years | $144 |
| 55 - 59 years | $268 |
| 60 - 64 years | $432 |
| 65 - 69 years | $600 |
| 70 - 74 years | $920 |
| Age 75 and over | $1,840 |
Clearly, as you age, renewable term policies, like VGLI can become cost-prohibitive.
However, for service members separating from the military with serious health problems (e.g. a cancer patient), a traditional policy may not be an option.
VGLI policies do not require underwriting.
Other forms of life insurance with no health questions do not offer substantial face amounts.
Especially if you have been diagnosed with a serious medical condition that could preclude you from securing a policy through a private carrier, VGLI is probably an excellent option.
Note – your VGLI coverage amount will be dependent on your SGLI coverage amount, with the option to increase the face value every five years.
Is VGLI enough?
It depends.
At the end of the day, you will want enough coverage to financially safeguard those you care most about.
A VGLI policy may provide adequate protection, but you will want to answer the following:
- What are the financial needs of my loved ones?
- Do I have serious health conditions that would prevent me from buying traditional coverage?
- How much VGLI coverage can I afford?
Note – the U.S. Department of Veterans Affairs also offers modest life insurance programs for qualifying disabled veterans:
- Service-Disabled Veterans Life Insurance (S-DVI)
- Veterans’ Mortgage Life Insurance (VMLI)
2. VGLI free services
In addition to life insurance coverage, Veterans’ Group Life Insurance policyholders can access helpful free services.
If you hold a VGLI life insurance policy, you also qualify for:
- Beneficiary Financial Counseling Service (BFCS)
- Free professional, lifetime financial advice for beneficiaries
- Online will preparation service
- Prepare a will without an attorney for free, completely online
3. SGLI to a private policy
SGLI policyholders also have the option to convert their coverage to a private commercial policy.
You must make the conversion within 120 days of separating from the military.
It’s important to note that you must select a participating company to convert to:
- American Fidelity
- Bankers Life and Casualty
- EMC National Life
- Life Insurance Company of Alabama
- Massachusetts Mutual Life
- Metropolitan Life
- New York Life
- Northwestern Mutual
- Prudential
- SBLI USA Mutual
- Trans World Assurance
- Guardian Life
Fortunately, you may convert your policy at standard rates, without the need to demonstrate insurability.
You must convert to a permanent policy.
The only form of coverage you may convert to is permanent coverage. Term, variable, and universal life insurance are not options for conversions.
Further, riders such as accidental death or waiver of premium for disability are not available.
4. PTSD
If you opt to look at life insurance options beyond converting your SGLI policy to either VGLI or a private policy, you need to be aware that post-traumatic stress disorder, or PTSD, will likely be asked about.
While reports vary by service era, it is estimated that between 11-20% of veterans have PTSD (Source: National Center for PTSD).
The good news is that you can often still secure coverage with PTSD.
But, there are a number of important underwriting questions you should plan to respond to:
- A recent PTSD diagnosis
- Drug or alcohol abuse
- Financial difficulties
- History of suicide attempts
- Hospitalization as a result of PTSD
- Employment adversity
- History of depression
- Changes in medications
- Family history of mood disorders
- Other health complications (e.g. high blood pressure)
Unsurprisingly, milder forms of PTSD, with little or no serious affects, tend to have higher rates of approval for life insurance coverage.
For more serious cases, especially with dangerous symptoms, you may receive a table rating or possibly be declined coverage.
What is a table rating?
A surcharge of somewhere between 20 – 200% tacked onto your premium rates as a result of presenting a certain amount of risk to a life insurance company.
What if I am declined?
First, if you do not qualify for traditional coverage, seriously consider converting your SGLI policy to either a VGLI or private policy (via an approved carrier). No health questions are asked.
Next, if you are otherwise uninsurable, in addition to SGLI policy conversion, you can purchase a guaranteed issue life insurance policy.
Guaranteed issue policies, while modest in size, are guaranteed to be issued. You cannot be turned down as result of PTSD, or any condition for that matter.
5. Underwriting factors
Aside from PTSD, there are other common underwriting factors veterans often encounter when applying for life insurance with a commercial carrier.
You will want to consider the following:
- Your age (life insurance options for seniors vary)
- Mental health conditions
- Tobacco use
- Disability
- Marital status
- Whether you prefer no exam life insurance
- If you participate in risky avocations (e.g. rock climbing)
Your overall health and preferences will help determine the best life insurance carrier to apply with for a private policy.
6. Buy term life insurance
If you can qualify, that is to say that your overall health is adequate, term life insurance is a popular choice for veterans.
Before applying, determine the following:
- How long do you need coverage? (e.g. 20-year term)
- What are the financial requirements of your beneficiaries? (e.g. $250,000)
- Do you want to add important riders? (e.g. waiver of premium or guaranteed insurability)
- Would you like to skip the medical exam?
7. Buy whole life insurance
Some veterans opt to buy whole life insurance.
To determine if a permanent policy makes sense, evaluate these questions:
- Are my beneficiaries’ financial needs indefinite?
- Do I want to utilize the cash value of a policy?
- What is my budget for life insurance rates?
Best Life Insurance Companies For Military
Certain life insurance companies underwrite active duty and veterans favorably.
We recommend evaluating the following carriers for your life insurance needs.
Prudential Financial
Prudential offers high-quality private life insurance for military members and sponsors the VGLI program.
Types of life insurance offered
- VGLI
- Term
- Universal
- Index Universal
- Variable Universal
- Survivorship
Of note – Prudential also sponsors the VGLI program.
USAA
USAA, or United Services Automobile Association, “proudly serves millions of military members”.
Membership is available to active, retired, and separated veterans with an honorable discharge, and eligible family members.
Types of life insurance offered
- Term
- Permanent
- Annuities
Of note – USAA has the highest financial rating available: A++ (A.M. Best)
Army & Air Force Mutual Aid Association
The Army and Air Force Mutual Aid Association (AAFMAA) offers a competitively priced alternative to the VGLI.
Often, you can skip the medical exam.
Types of life insurance offered
- Term
- Whole
- Annuity-like product
Of note – AAFMAA is ideal for seniors, but it is not available in the following states: Mississippi, New Jersey, New York, Utah, Washington, Wisconsin, and Washington D.C.
Navy Mutual
Navy Mutual is only open to individuals and their spouses who have served in the armed forces, U.S. Public Health Service, or National Oceanic and Atmospheric Administration.
They have a popular no exam term product.
Types of life insurance offered
- Term
- Whole
Of note – Navy Mutual does not include active duty service restrictions.
Military Benefit Association
The Military Benefit Association is another organization that is exclusive to active duty, veterans, and their spouses.
MBA life insurance plans are underwritten by top carriers like MetLife and The Hartford.
Types of life insurance offered
- Term
Of note – Military Benefit Association offers a wide variety of term life insurance products to choose from.
How To Buy
Plan to do a few important things in order to secure the coverage you need.
With the help of an independent agent, your military life insurance options can be carefully planned out.
Active Duty
Military members who are active duty should do the following:
- Evaluate life insurance offered through the armed services
- SGLI
- FSGLI
- Death Gratuity
- Survivor Benefit Plan
- Look into private life insurance options
- Document underwriting concerns such as deployments and job duties
Veterans
Military veterans need to reassess their life insurance upon separation from the armed services:
- Consider your options for your SGLI policy
- Convert to a VSGLI policy
- Convert to an approved permanent policy through a private carrier
- Look into private life insurance options
- Document underwriting concerns such as PTSD
Start with your free quote to compare private life insurance policies.
