VGLI Life Insurance for Veterans: Good Rates in the Short-Term, but Not Over Time

Good coverage when you’re coming home from active duty, but convert to a different insurer as soon as you have the chance.

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VGLI is life insurance for veterans and retired members of the military. VGLI life insurance policies are only available if you had a servicemembers group life insurance (SGLI) policy during your time in service.

SGLI is much more valuable as it provides coverage for any cause of death. VGLI, on the other hand, has average coverage and rates increase dramatically as you get older. The most valuable feature of VGLI is that, so long as you have coverage in place, you can convert it to a whole life insurance policy at a top insurer without demonstrating your health.

Good for
  • Young veterans
  • Servicemembers on active duty
  • Older people with pre-existing medical conditions
Bad for
  • People that want lifelong coverage
  • Veterans that are healthy and over 30

Servicemembers Group Life Insurance

SGLI is term life insurance that all active duty servicemembers, as well as members of the Ready Reserve and National Guard, are automatically signed up for. Unlike a normal term life insurance policy, SGLI’s term of coverage is simply the time you’re on active duty, plus 120 days after.

Veterans Affairs (VA) provides life insurance for servicemembers because many life insurance policies specifically exclude coverage for deaths due to acts of war or terrorism. SGLI covers every situation, and beneficiaries will even receive a death benefit in the event that the servicemember dies by suicide.

You can have between $50,000 and $400,000 of coverage with SGLI and are automatically signed up for the maximum amount. SGLI’s monthly rates are simply $0.06 per $1,000 of death benefit, and you can add traumatic injury protection for $1 per month. So, if you had $400,000 of coverage, your monthly premium would be $25 with traumatic injury protection.

SGLI also offers the option of accelerating up to 50% of your policy’s death benefit (receiving it while still alive) if either you or your spouse becomes terminally ill. This benefit is common, but usually only applies to the policyholder.

Veterans Group Life Insurance

When you leave active duty, you must convert your SGLI policy to a VGLI plan within one year and 120 days. Veterans who submit their conversion applications within 240 days of discharge will not have to answer any questions about their health. However, after this period you would need to fill out a health questionnaire. After 485 days, you won’t be able to apply for a VGLI policy.

Since you’re converting the SGLI policy, your VGLI life insurance policy will have the same amount of coverage. However, if you lowered your SGLI death benefit and want additional coverage, you can increase the size of your VGLI policy by $25,000 every five years (until the death benefit reaches $400,000 or you turn 60, whichever happens first). While VGLI policies are term life insurance, they renew each year and are available for the length of your life.

VGLI life insurance rates

VGLI premiums are only determined by your age and how much coverage you have. Other factors, such as your tobacco use and weight, are not included in the cost. While this means VGLI’s life insurance rates are outstanding for overweight smokers with preexisting medical conditions, they’re either average or high for healthy veterans. In addition, premiums increase every five years as you enter a new age bracket (such as 30 to 34).

We compared the cost of 50 years of coverage through VGLI against the cost of purchasing term or whole life insurance coverage for the same period of time through USAA. As you can see, VGLI’s rates are competitive for a young veteran but soon overtake the cost of a whole life insurance policy. Over the course of 50 years, you would pay 39% more for VGLI than whole life insurance.

USAA whole life
USAA term life
Average monthly premium$222.60$159.98$66.65
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Sample life insurance rates are for a 30-year old male in great health purchasing $250,000 of coverage. Sample term life insurance rates are based upon an initial 30-year level term policy as well as a 20-year level term policy purchased at age 60.

Given the high premiums, instead of VGLI we would recommend you convert your VA life insurance policy to an individual life insurance policy. SGLI policies and VGLI policies can both be converted to permanent coverage with insurers the Office of Servicemembers Group Life Insurance (OSGLI) partners with. Their partners include most of the top life insurance companies, such as MetLife, New York Life and Northwestern Mutual.

Though you can only convert to a permanent policy, such as whole life or universal life insurance, you don’t have to demonstrate that you’re in good health.

Similarly, though the OSGLI also offers life insurance specifically for disabled veterans, it’s very limited coverage ($10,000 death benefit) and rates increase over time.

Office of Servicemembers Group Life Insurance payments and claims

VGLI is offered through Prudential. You can create an account and handle everything related to OSGLI payments online, as well as update beneficiaries and change your payment schedule to monthly, quarterly or annually.

Claims are also handled directly through Prudential, not the OSGLI. As with any life insurance policy, make sure your beneficiaries are aware of the policy and have a copy in case they need to make a claim.

Editorial Note: The content of this article is based on the author's opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.