One of the decisions you will make before you retire is how to replace the life insurance coverage you will lose when you leave the service. You have several options — including Veterans Group Life Insurance (VGLI) from the government, as well as term and whole life policies from insurance carriers.
Why Do You Need Life Insurance?
Life insurance covers essential expenses and provides financial security for your survivors. There are two types of life insurance — term and whole life — and most people need some of both. Determining how much of each is appropriate for you depends on your current life situation — who you need to protect from what financial burdens and for how long.
If you’re leaving the military but you’re still in your earning years with your family depending on your income, and you’re planning a second career, you will need to replace your SGLI. You would want to do this with term life insurance that would cover your lost income, living expenses, any mortgage debt, childcare needs, and education expenses for the remainder of what would have been your earning years.
Additionally, assuming life goes according to plan and you outlive your term policy, you’ll want the permanent coverage of whole life insurance to protect your loved ones from your final expenses when you do pass away at a ripe old age. However, if you wait until you’re the age where your term coverage expires to buy a whole life policy, it will be significantly more expensive. Life insurance is priced by age, and it gets more expensive as you get older, so it’s always better to get covered as early as possible.
Veterans Group Life Insurance (VGLI)
When you retire from the military, you will lose the Servicemembers’ Group Life Insurance (SGLI) coverage you’ve had for 20+ years. You can buy Veterans Group Life Insurance (VGLI) without exception if you apply within 240 days of separation. You have up to one year and 120 days of leaving the military to apply, however after 240 days VGLI requires you to submit evidence that you are in good health. VGLI is guaranteed coverage for all Veterans regardless of their health condition upon leaving the military; however, the premiums increase exponentially every five years and quickly become prohibitively expensive. In many cases, Veterans can qualify for more affordable coverage options from organizations, such as AAFMAA.
AAFMAA Life Insurance Options
AAFMAA offers always-affordable life insurance policies for a variety of needs and coverage levels to all members of the military community throughout all stages of their career and life. The coverage you, your spouse, and your children need is available easy and fast from the nonprofit association that has served military families just like yours since 1879.
Before you retire, AAFMAA policies can supplement your SGLI while you are still in service and, unlike SGLI, our policies will remain in force after you transition out of service. All policies include our hallmark Survivor Assistance Services to ensure your survivors receive personal assistance in accessing any survivor benefits and entitlements you’ve earned through your service.
Learn More
For more information on additional topics to consider in preparing for military retirement, please see the following:
To find out more about your life insurance options with an expert AAFMAA Membership Coordinator, or to get a quote, contact us at 866-860-3703 or visit www.aafmaa.com/getaquote.