Sunday, September 2, 2012

Can You Get Life Insurance If You Are in the Military?

Members of the military are eligible for Servicemembers’ Group Life Insurance (SGLI). This group life insurance is open to members on active duty, National Guard members, and ready reservists. Cadets and midshipmen in the service academies and Reserve Officer Training Corps (ROTC) members are also eligible.

SGLI has low premiums
SGLI coverage is available up to a maximum of $400,000. It comes in increments of $50,000. Monthly premiums are the same regardless of age. At this writing, monthly premiums cost six and a half cents per $1000 of coverage plus one dollar for mandatory Traumatic Injury Protection coverage (TSGLI). TSGLI is a dollar regardless of the level of coverage. So the maximum $400,000 would have monthly premiums of $27.

If a servicemember wants more coverage than the maximum offered by SGLI, they can apply for a life insurance policy from a commercial insurance company. However, private companies often do not cover death as a result of military action.

Family members may also be covered
Spouses of servicemembers covered under SGLI are eligible for Family Servicemembers’ Group Life Insurance (FSGLI). Coverage is offered up to $100,000 for spouses. If a spouse is also a servicemember, you and your spouse will be eligible for both SGLI and FSGLI for a maximum of $500,000 for each of you. FSGLI premiums are based on the age of the spouse.

Dependent children of servicemembers with SGLI automatically get coverage of $10,000 each.

When servicemembers are released from service, they have the option of converting their fulltime SGLI coverage to Veterans' Group Life Insurance (VGLI) or to a permanent plan from a commercial insurance company.

If converting to VGLI, the initial coverage amount cannot be higher than the final amount of SGLI coverage. Servicemembers under the age of 60 may purchase up to an additional $25,000 of VGLI coverage on each five-year anniversary of the start of their VGLI coverage as long as they are under the $400,000 maximum. The additional coverage does not require medical underwriting.

VGLI premiums are based on the age of the servicemember.

Converting SGLI to private insurance
If a servicemember wants to convert to a permanent plan from commercial insurance company, they must do so within 120 days of their separation from service. They need to confirm that the company is participating, since not all of them do so. The conversion must to be a permanent policy, such as whole life. The conversion is generally at standard premium rates. Servicemembers generally do not need to provide proof that they are in good health.

Ben Hargrove writes for a variety of blogs, including Best Life Insurance Deals.

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