Military Insurance: Resources and Information
Insurance can be an expensive proposition for anyone, and service members are no exception. For those in the military, insurance can be much more complex and much more important than a mere auto liability policy, given the hazards that service members can face. This is especially true for those that serve on the front lines, many of whom are 20 year olds who, much like their peers in the civilian world, often don't give a lot of thought to their insurance policies.
Fortunately, the more than 1.3 million American men and women that currently serve in the U.S. military have exclusive access to low cost policies that are relatively easy to access. Service members and their families enjoy a carefully woven safety net of life insurance, death gratuity, lifelong survivor benefits, financial counseling, and bereavement support, all tailored to meet the unique challenges of modern military life.
Servicemembers Group Life Insurance
Servicemembers Group Life Insurance (SGLI) is a VA program that provides low cost group life insurance to the following members of the military and other related federal agencies:
- Active duty service members
- Reservists and members of the National Guard who are scheduled to perform at least 12 periods of inactive training per year (weekend drills)
- Cadets/midshipmen in U.S. military academies
- Cadets/midshipmen in the Reserve Officers Training Corps (ROTC) program who are engaged in authorized training
- Servicemembers who volunteer for a mobilization category in the Individual Ready Reserve (IRR)
- Commissioned members of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS)
SGLI is part of military members' employee benefit package. With a generous maximum death benefit of $400,000, plus a Service Death Gratuity of $100,000, it provides active-duty military members up to $500,000 of life insurance coverage.
Covered members receiving SGLI pay a monthly premium automatically deducted from their base pay. The rate of the premium is currently $0.07 per $1,000 of coverage and includes $1 per month for Traumatic Injury Protection Coverage (TSGLI), but this can be changed in the future.
Supplemental Life Insurance
While half a million dollars sounds hefty, it may not be enough protection for most people. After all, the true purpose of life insurance is to provide an ongoing stream of income for your survivors -- income that you would have provided had you lived. Further, SGLI is temporary coverage. Like all employer group insurance, it terminates when you leave your employer. SGLI generously provides you with free coverage for 120 days after you separate from the military, but after that it’s gone.
Because of this, you may want to consider supplemental life insurance in addition to SGLI. This article is just a brief introduction to life insurance for military members. Things like the difference between term life and permanent life insurance confound all insurance consumers. If working with an insurance agent, ask for clarification on terms like underwriting and rider policies.
Converting SGLI to Veterans Group Life Insurance
What should you do if you’re leaving the military? Your SGLI coverage may be converted to Veterans Group Life Insurance (VGLI) or, if desired, to a commercial life insurance policy effective at the end of the 120-day SGLI extension period.
VGLI is a great option for those service members separating or retiring who cannot medically qualify for a regular life insurance policy. You are guaranteed to be able to convert your SGLI to VGLI if you do it within the time frame, without medical underwriting.
Military Insurance Options
There are plenty of insurance companies that cater to the military or provide discounts. Here are a few options to consider when shopping for military insurance.
- United Services Automobile Association (USAA) is a well known military insurance carrier. It offers a full range of financial products, including auto, life, homeowners, renters, and health insurance.
- Tricare is a health care program that only serves uniformed service members, retirees and their families.
- GEICO has a history with the military and government employees. They offer discounts and have a dedicated Military Center available.
- The Navy Federal Credit Union is another option for insurance policies for all branches of the military, plus Department of Defense employees.
Still have military insurance questions? Call the Office of Servicemembers Group Life Insurance at 1-800-419-1473 or visit your local, supporting Military Personnel Office.
Contact a qualified military law attorney to help you with military-related issues.