National Insurance Awareness Day, observed on June 28, 2024, serves as an excellent reminder to review your insurance coverage and explore how VA life insurance can safeguard your future and the well-being of your loved ones.
Veterans with service-connected disabilities may encounter challenges in securing affordable life insurance options within the private sector. The Department of Veterans Affairs (VA) offers a variety of life insurance programs designed to meet the financial needs of veterans, service members, and their families at every stage of life, including a guaranteed acceptance whole life insurance program called Veterans Affairs Life Insurance (VALife).
When considering life insurance, it’s essential to understand the differences between whole life and term life insurance. These are the two most common types of life insurance coverage, each designed to address the unique financial circumstances of the policyholder and their family.
Term Life vs. Whole Life
Here’s a breakdown of the key differences:
- Protection: Term life insurance provides coverage for a specific period, such as 10, 15, or 20 years. Whole life insurance offers lifelong coverage, as long as premiums are paid.
- Cash Value: Term life insurance does not accumulate cash value. Whole life insurance, due to its investment component, builds cash value over the policy’s lifespan.
- Premiums: Term life premiums are typically less expensive than whole life premiums, especially when younger. Term life premiums are set for a specific term but may increase upon renewal. Whole life premiums are generally higher and fixed for the life of the policy.
- Benefits: Term life insurance only provides death benefits. Whole life insurance offers both death benefits and the cash value that accumulates during the policy’s life.
Advantages of Whole Life Insurance
Whole life insurance programs offer a variety of benefits, which are especially beneficial if you’re purchasing at a younger age:
- Guaranteed Premium: Lock in a fixed premium that remains constant throughout your lifetime.
- Savings Component: Build cash value over time, providing a financial resource that can help cover future expenses.
- Future Planning: Help ensure that your family, including your parents, spouse, or other loved ones, are not left with financial struggles to cover final expenses.
Understanding VA Whole Life (VALife) Coverage
VALife is a program that provides guaranteed acceptance whole life insurance to veterans aged 80 and under with any level of service-connected disability, even those with a 0% rating. Guaranteed acceptance means applicants do not have to answer health questions or undergo a medical exam for enrollment. Due to the absence of medical requirements, there’s a two-year waiting period before full coverage takes effect.
VALife offers numerous benefits:
- Eligibility: Available to all service-connected veterans aged 80 and under, with disability ratings from 0-100%.
- Coverage Amounts: Coverage increments of $10,000, up to a maximum of $40,000.
- No Health Requirements: No health questions or medical exams are required to enroll.
- Convenient Application: Online application and enrollment with instant approvals.
- Cash Value: Policies build cash value after the first two years.
Important Note: Veterans currently enrolled in Service-Disabled Veterans Insurance (S-DVI) who apply for VALife must choose which policy to keep before their full VALife coverage takes effect (two years after enrollment). Once S-DVI is terminated, it cannot be reinstated. S-DVI closed for new enrollments on December 31, 2022.
Learn More
The VA Life Insurance Needs Calculator is a useful tool for determining the proper amount of coverage. The VA offers quality life insurance coverage at competitive rates to veterans, service members, and their families. Protect those who matter most; visit the VALife webpage to learn more about VALife and determine if it’s the right choice for you and your family. For assistance with end-of-life planning, visit the End-Of-Life Benefits section of the VA website.
Warning: Be aware of fraudulent companies that offer life insurance and may attempt to steal your personal information or money. Protect yourself by visiting www.va.gov/VSAFE.
