Service members, their families, and veterans can expect lower life insurance costs starting July 1, according to a recent announcement.
SGLI Premium Reductions
For active-duty military personnel, the monthly premiums for Servicemembers’ Group Life Insurance (SGLI) will decrease from 6 cents to 5 cents per $1,000 of coverage. In addition to the monthly premium, service members currently pay $1 per month for SGLI Traumatic Injury Protection.
For example, an individual with the maximum SGLI coverage of $500,000 will pay $26 per month, inclusive of the traumatic injury protection, a reduction from the current rate of $31. All service members pay the same rate, regardless of age, with coverage available in $50,000 increments.
These reductions are a result of the “sound financial standing” of the insurance programs, according to the Department of Veteran Affairs, which administers them. The reductions will be automatic, requiring no action from service members or veterans.
Family SGLI
For spouses covered by Family SGLI, premiums will decrease by an average of 13%, with reductions ranging between 11% and 22%. Rates vary based on the spouse’s age.
For instance, premiums for a spouse under 35 will drop from $4.50 to $4 per month for the maximum $100,000 of coverage. Spouses aged 40 to 44 will see their premiums fall from $7 to $6.20 per month.
If a spouse is registered in the Defense Enrollment Eligibility Reporting System (DEERS), the premium is automatically deducted from the service member’s pay. Otherwise, the service member is responsible for making payments. Coverage for spouses is available in increments beginning at $10,000.
Veterans Group Life Insurance Changes
Veterans Group Life Insurance (VGLI) policyholders will see an average decrease of approximately 11%, with individual reductions varying from 2% to 17%. VGLI premiums are age-dependent.
Unlike SGLI, VGLI rates increase every five years as the veteran ages, starting at age 30. Veterans aged 29 and younger with $500,000 of coverage will pay $30 monthly, a drop of $5 from the current rate. For $100,000 of coverage, the cost will be $6 per month, reduced by $1.
For veterans aged 40 to 44, the monthly premium for $500,000 of coverage will decrease to $70, a reduction of $10. For those 80 and older, the monthly premium for $500,000 will decrease from $2,250 to $2,200.
SGLI coverage ceases automatically upon leaving the military. Those leaving the military with SGLI coverage are eligible to enroll in VGLI, subject to specific time limits. However, VGLI is generally more expensive than SGLI, so experts advise comparing other life insurance options.
VGLI offers the advantage of waiving health requirements for enrollment within the 240-day period after leaving the service.
