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AAFMAA Blog

Military Life Insurance Benefits

2021-12-26

As a member of the armed forces, you have the opportunity to participate in the Servicemembers’ Group Life Insurance (SGLI)program. This is a term life insurance policy available in $50,000 increments up to $400,000. Servicemembers who meet the criteria are automatically enrolled in the military life insurance program unless they opt out.

Who Is Eligible for SGLI?

To qualify for SGLI, you must meet at least one of the following:

  • An active-duty member of the United States military.
  • A commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS).
  • A cadet or midshipman of the U.S. military academies.
  • A member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises.
  • A member of the Ready Reserve or National Guard, assigned to a unit, and scheduled to perform at least 12 periods of inactive training per year.
  • A volunteer in an Individual Ready Reserve (IRR) mobilization category.

Servicemembers who are in non-pay status with the Ready Reserve or National Guard also may be eligible for SGLI coverage. To qualify, these servicemembers must be scheduled for 12 periods of inactive training for the year and must be drilling for points instead of pay.

How Much Does SGLI Cost?

Unless you opt out of SGLI, your monthly premium will be automatically deducted from your base pay. The basic SGLI premium is $0.06 per $1,000 of insurance coverage, plus an extra $1 per month for Traumatic Injury Protection Insurance (TSGLI). TSGLI provides a payout for some life-altering injuries, such as loss of sight or a limb.

At these rates, the minimum policy amount for $50,000 of life insurance is $4 per month, plus the $1 for TSGLI, or $5 total. The maximum $400,000 policy costs $24 per month, plus $1 for TSGLI, equaling $25 per month.

Can Family Members Get SGLI Coverage?

You can add on coverage for your family through the Family SGLI (FSGLI) option. For an additional $5 per month, your spouse under age 35 can receive up to a maximum of $100,000 coverage. Spouses over 35 can get coverage, but the cost increases exponentially every five years as your spouse ages. The option also provides $10,000 in coverage per child.

What Happens to My SGLI Policy If I Leave the Military?

Once you leave the military, you have 120 days to maintain your military life insurance benefits by converting your SGLI to Veterans Group Life Insurance (VGLI). However, VGLI is dramatically more expensive to start than SGLI and can quickly become cost-prohibitive because it must be renewed at increasingly higher rates every five years. For example, a $400,000 VGLI policy costs $64 per month at age 40 but increases to $396 per month by age 60.

Can Disabled Veterans Get an Extension on Their SGLI Coverage?

Depending on your disability, you may qualify to keep your SGLI coverage for up to two years from the date you leave the military. However, to qualify, you must be within two years of your separation date and meet at least one of the following criteria:

  • At the time of your discharge, you are totally disabled and unable to work, or
  • You’ve had one of the following:
    • Total hearing loss in both ears
    • Loss of speech that leaves you unable to talk or whisper without assistance from an artificial device
    • Permanent loss of use of hands, feet, or eyes; or one hand and one foot; or one hand or foot and one eye

If you qualify, you can apply for the Servicemembers’ Group Life Insurance Disability Extension (SGLI-DE). If approved, your coverage will be extended for 20 months after your separation date. At that time, you’ll receive a letter reminding you that your SGLI-DE will be ending and that you will have to convert your policy to the VGLI plan to maintain your military life insurance benefits. VGLI has no medical underwriting requirements and you can stay enrolled in VGLI for life as long as you pay the premiums.

Consider AAFMAA Military Life Insurance Policies Instead

While SGLI is a solid and affordable term life insurance program for servicemembers, it does have its limitations. Depending on your situation, you may need more coverage than SGLI offers, or you may want a permanent life insurance policy that builds cash value you can use in the future. Additionally, when you leave the military and your SGLI coverage runs out, your AAFMAA policy will remain in force, at a significantly more affordable rate than VGLI. Veterans who choose AAFMAA over VGLI for the remainder of their earning years can typically save tens of thousands of dollars in premiums.

Talk to a member of the AAFMAA life insurance team to learn how our life insurance programs can meet your family’s specific needs. Get a free online quote and contact us at 877-398-2263 today to get started.