Life Insurance Premiums Decrease for Troops and Veterans
Service members, their families, and veterans will experience a reduction in their life insurance costs beginning July 1. This adjustment affects both Service Members’ Group Life Insurance (SGLI) and Veterans Group Life Insurance (VGLI), according to information released by the Department of Veteran Affairs.
For active-duty military personnel, the monthly premiums for SGLI coverage will drop from 6 cents to 5 cents per $1,000 of coverage. In addition to the monthly premium, service members currently pay $1 monthly for SGLI Traumatic Injury Protection. Taking these changes into account, a service member with the maximum SGLI coverage of $500,000 will now pay $26 per month – including the $1 for Traumatic SGLI – a reduction from the current rate of $31. All service members pay the same rate, regardless of age, and coverage is available in increments of $50,000.
These reductions are a direct result of the “sound financial standing” of the insurance programs, claimed the Department of Veteran Affairs, which manages these initiatives. The reductions will be implemented automatically, meaning troops and veterans won’t need to take any action to receive the new rates.
Family SGLI Premium Reductions
For spouses covered by Family SGLI, premiums will decrease by an average of 13%, with the range of reductions set between 11% and 22%, according to the VA. Rates are based on the spouse’s age. For instance, premiums for a spouse under 35 will decrease from $4.50 to $4 per month for the maximum $100,000 of coverage. Spouses between the ages of 40 and 44 will see their premiums drop from $7 to $6.20 per month. If the spouse is enrolled in the Defense Enrollment Eligibility Reporting System, or DEERS, the premium is automatically deducted from the service member’s pay. Service members are still responsible for the premiums if the spouse is not in DEERS. Coverage for spouses begins at $10,000 increments.
Veterans Group Life Insurance Changes
Veterans covered by VGLI will see an average decrease of approximately 11%, with reductions varying from 2% to 17%. VGLI premiums are determined by age. Unlike service members’ rates, VGLI rates increase every five years as the veteran ages, starting at age 30. For veterans aged 29 and younger, the monthly cost for $500,000 of coverage will be $30, a decrease of $5. For $100,000 of coverage, the cost will be $6 per month, down by $1. For veterans ages 40 to 44, the monthly premium for $500,000 of coverage will drop by $10 to $70. For those 80 and over, the monthly premium for $500,000 will decrease from $2,250 to $2,200.
SGLI coverage doesn’t automatically continue after leaving the military; however, all service members with existing SGLI coverage are eligible to enroll in VGLI, with certain time constraints. It’s worth noting, however, that VGLI is generally more expensive than SGLI, and insurance experts often suggest shopping around to compare different life insurance options. An advantage of VGLI is that individuals enrolling within 240 days of their separation from the military are not required to prove their state of health.
