Life Insurance for Disabled Veterans [2024]

Numerous service members have life insurance policies in effect, and those who leave the military have several alternatives for keeping their coverage in place. Veterans can choose between changing their Servicemembers’ Group Life Insurance (SGLI) policy to a Veterans’ Group Life Insurance (VGLI) policy, buying life insurance for disabled veterans from a private insurer, or converting their SGLI or VGLI policy to private life insurance.

There are restrictions on who is eligible for VGLI’s guaranteed approval period of up to 240 days after separation from active duty. Take the VGLI policy, which offers a maximum death benefit of $400,000. Many financial institutions now offer life insurance for people living with disabilities, providing them with the protection and security they deserve.

Although private-term life insurance can provide benefits of up to several million dollars at competitive rates, it is not always accessible or affordable for veterans with complicated medical conditions.

 

Life Insurance Options for Veterans 

After leaving the military, veterans can choose from four life insurance policies.

• Let SGLI expire and buy private life insurance. Start the application procedure early if you wish to get insurance from a private insurer. This is the greatest choice for those veterans who do not have serious health problems and are, therefore, eligible for a less expensive civilian policy.
• Convert SGLI to VGLI. You must switch to VGLI within 485 days of leaving active service to maintain your military-issued life insurance benefits. To be sure you’re getting the greatest deal possible, check your life insurance premium against private life insurance quotes.
• Convert SGLI to private life insurance. If you do it within 120 days of leaving active duty, you can convert your SGLI into civilian coverage with certain providers without taking a medical exam. Veterans with health issues who want private insurance should give this some thought.
• Convert SGLI to VGLI, then convert VGLI into private coverage. You can switch from VGLI to a civilian policy with certain companies at any time and not have to undergo a medical exam. You can now compare private insurance quotes and choose the finest possible terms for your needs.

Your medical background and budgetary constraints will determine the optimal course of action. The continuation of VGLI may be beneficial for veterans with complex medical issues who require minimal coverage. A civilian strategy may be more practical and affordable for some.

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Military-Provided Veterans’ Group Life Insurance (VGLI)

Members of the armed forces are automatically enrolled in the group life insurance plan known as SGLI, which can be transitioned into the voluntary group life insurance known as VGLI for up to a year and four months after you separate from active duty.

You must keep paying your premiums to keep your coverage in effect as you go from SGLI to VGLI.

If your life expectancy is less than nine months, you can access up to half of your VGLI proceeds before they become fully payable if you convert your SGLI to VGLI (it works the same way as the hastened death benefit offered by some life insurance contracts).

However, coverage limits top out at $400,000, and rates rise with age.

When to Convert SGLI Into VGLI

Suppose you want to prevent a coverage gap. In that case, you should begin the conversion procedure as soon as possible because your SGLI coverage only remains current for 120 days after you leave active service. If you decide to convert your policy within the first 240 days, you will not need to undergo the medical exam that is typically part of the life insurance underwriting process.

Between Day 240 and Day 485, VGLI is still available, but it requires a medical exam and a higher premium if you have pre-existing conditions. While researching civilian life insurance choices, veterans with pre-existing problems should consider converting to VGLI within 240 days.

Any moment is a good time to switch from VGLI to civilian coverage with one of the participating insurers. You can request a status change on paper or on the VA’s website.

When to Convert SGLI Into Private Life Insurance

Some insurance firms work with the armed forces to provide military retirees with affordable life insurance plans. Military members who have SGLI can switch to a private life insurance policy with a partner company within 120 days of leaving active duty.

Your current level of SGLI coverage and premium rate will be authorized without a medical exam from these insurers. This is something to think about if you’re set on purchasing private insurance but know that pre-existing conditions will drive up your premiums. You can shop around for a new policy, but you will have less time than veterans with VGLI do.

How much does life insurance for veterans cost?

Life insurance for veterans can differ in terms of costs based on the situation. As premiums are kept current, VGLI is a permanent form of life insurance. There is an age and coverage-related rise in the monthly premiums. The maximum VGLI premium is $400,000, which varies by age, as shown below.

It’s been found that the percentage of wartime vets having PTSD differs by a decade of service. According to the VA, between 11 and 20 percent of veterans who participated during the most recent Iraqi Freedom and Afghanistan Freedom operations suffer from PTSD yearly.

Particularly, if your PTSD diagnosis is recent or if your condition prevents you from working, you may have trouble finding cheap private life insurance coverage if you have been diagnosed with it.

Even if you’ve been diagnosed with PTSD, it’s possible to purchase life insurance, albeit the premiums may be more than average due to the increased risk. You’ll need to show the life insurance company that you’ve been successfully treated with medicine and therapy for an extended period (at least a year).

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Life Insurance for Disabled Veterans

Certain disabled American veterans are eligible for life insurance coverage through the Department of Veterans Affairs (VA) under a program called S-DVI (Service-Disabled Veterans Life Insurance). Servicemembers’ Group Life Insurance program provides similar financial security to active-duty service members (SGLI).

You won’t find S-DVI insurance policies on the market via independent insurance agencies or online brokers like Policygenius.

Life Insurance Rates for Disabled Veterans

S-DVI premiums are calculated according to the insured’s age, desired coverage level, and desired annual premium (the VA offers nine different policy options, including term life insurance and permanent life policies). Base coverage for disabled veterans is $10,000, with an additional $30,000 available as optional riders.

When an S-DVI policyholder is entirely handicapped before the age of 65 and cannot work due to their disability, they may be eligible for a premium waiver. VA Form 29-357 is where you can submit your request for a premium exemption.

You may see the current prices for S-DVI premiums in the VA’s most recent rate book. Insurance premiums vary depending on the coverage chosen. How much life insurance you need, your age, and the type of policy you select will determine your premiums. Rate examples for a 40-year-old veteran looking to purchase a $40,000, five-year level term policy (premiums increase every five years) are shown above.

Who is eligible for Service-Disabled Veterans Life Insurance (S-DVI)?

A veteran with a service-connected disability must meet these four criteria to receive S-DVI:

• Rated for a service-connected disability by the VA.
• In good health, they are barring any illnesses related to military service.
• Discharged from active duty on or after April 25, 1951, under conditions deemed honorable.
• To be considered, you must submit your application no later than two years after the VA approves your new service-connected disability.

You may not be eligible for S-DVI if the date of the final determination of your service-connected disability is more than two years ago. The VA has until ten years after a disability is determined to be service-connected to file and enroll for benefits, but the Disabled Veterans Life Insurance Act of 2017 has not yet been passed.

Applying for S-DVI life insurance for disabled veterans can be done through the VA via mail, phone, or their website if you qualify.

Life Insurance for Retired Military 

Veterans include all military retirees, although not all retirees are veterans. Due to this distinction, you should expect the life insurance policies to remain the same. After leaving the military, retirees can choose from the same life insurance alternatives available to veterans: VGLI, S-DVI, and private civilian policies. You must switch your military health insurance to VGLI if indemnity from death in service occurs within 485 days of separation from active duty, which may not be the most cost-effective alternative.

The cost of life insurance for retired military can vary depending on their age, health, and coverage needs, but there are many options available that offer affordable and comprehensive coverage to help support their families in the event of their passing.

Life Insurance Rates for Retired Military

Officers typically retire at the age of 46, while enlisted members typically retire at age 42. We gathered data for a healthy, 40-year-old individual with no prior medical history or smoking habit to evaluate the cost of VGLI versus private coverage. The premium for a term life insurance policy does not change over its duration (also known as level term life insurance). Given that the maximum coverage provided by VGLI is $400,000, we compared it to a private $400,000, 30-year term policy. Learn how to get term life insurance quotes.

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When to Choose VGLI Over Private Life Insurance for Veterans

For some people, VGLI is preferable to private insurance. If you have pre-existing health conditions that make it difficult to obtain standard life insurance, VGLI may be your best option. In addition to a post-traumatic stress disorder, this also applies to other impairments and illnesses, such as those acquired in the line of duty. A person’s insurability may be affected by several medical disorders, including those affecting the mind, the nervous system, and the heart.

Private life insurance policies are highly costly if you are 60 or older and applying for coverage. The rates for VGLI might skyrocket as you age, too. But VGLI premiums may be more reasonable if you are an older person seeking smaller coverage amounts to cover final expenses.

A veteran’s health and life insurance requirements will vary from person to person, so it’s important to shop around before settling on a carrier. Nonetheless, some people might be better off remaining covered by VGLI.

Case Studies: Life Insurance for Disabled Veterans

Case Study 1: John – Transitioning from SGLI to VGLI

John is a disabled veteran who recently left the military. He had a Servicemembers’ Group Life Insurance (SGLI) policy during his service. After his separation from active duty, John decided to convert his SGLI policy to Veterans’ Group Life Insurance (VGLI).

This allowed him to maintain life insurance coverage and ensure financial assistance for his family in case of his passing. By converting to VGLI within the 240-day guaranteed approval period, John avoided the need for a medical exam. He now has peace of mind knowing that his loved ones are protected.

Case Study 2: Sarah – Exploring Private Life Insurance

Sarah, a disabled veteran with complex medical conditions, considered private life insurance for additional coverage. However, due to her health history, she found it challenging to obtain affordable coverage from private insurers.

After careful research, Sarah decided to keep her coverage with VGLI, which offered a maximum death benefit of $400,000. This option provided the necessary financial protection without the need for a medical exam or the higher premiums associated with private insurers.

Case Study 3: Michael – Service-Disabled Veterans Life Insurance (S-DVI)

Michael, a disabled American veteran, qualified for life insurance coverage through the Department of Veterans Affairs (VA) under the Service-Disabled Veterans Life Insurance (S-DVI) program. He applied for S-DVI coverage, which provided a base coverage of $10,000, with an additional $30,000 available as optional riders.

The premiums for S-DVI were calculated based on Michael’s age, desired coverage level, and desired annual premium. S-DVI offered Michael the financial security he needed, tailored to his specific circumstances as a disabled veteran.

Case Study 4: Rebecca – Retired Military and Life Insurance Options

Rebecca, a retired military member, explored her life insurance options after leaving the service. As a veteran, she had several alternatives to choose from, including VGLI, S-DVI, and private civilian policies. Rebecca carefully evaluated the cost and coverage provided by each option.

After considering her age, health, and coverage needs, Rebecca decided to purchase a private life insurance policy. By comparing quotes from different insurers, she found an affordable policy that met her requirements and provided financial protection for her family.

The Bottom Line on Life Insurance for Disabled Veterans

In conclusion, disabled veterans’ life insurance provides crucial protection for those who have served their country and suffered disabilities as a result. This coverage can help alleviate financial burdens, support their families, and offer peace of mind in the face of uncertain circumstances. Disabled veterans have made significant sacrifices for their country, and disabled veterans’ life insurance is one way to honor and support them in return. It is a critical benefit that can provide long-term security and stability for disabled veterans and their loved ones.

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