Qualified military servicemembers, regardless of branch, are automatically issued the maximum Servicemembers' Group Life Insurance (SGLI) coverage when they join the armed forces. But what does it include and what does it really cover?
Related: SGLI Online Enrollment System (SOES)
About SGLI and Coverage Options
SGLI provides $500,000 worth of group term life insurance coverage to servicemembers at a cost of $31 per month. Additional coverage options you can enroll in for an additional premium include:
- FSGLI, or Family SGLI: or $5 per month, spouses under age 35 can get up to $100,000 in life insurance coverage, and dependent children can get $10,000 per child. Spouses over age 35 can get coverage as well at an additional cost.
- TSGLI, or Traumatic SGLI: Costs an additional $1 per month, provides up to $100,000 if you suffer from a traumatic injury, such as limb or sight loss.
Does SGLI Provide Enough Coverage?
While $500,000 may sound like a lot of money, if you are married with dependents it may not stretch as far as you’d think. Let’s say you make approximately $50,000 per year, not including your allowances. A $500,000 life insurance payout would only make up for your lost income for 10 years. Plus, it doesn’t factor in additional big-ticket items such as medical bills and college tuition that your beneficiary might have to pay out of pocket or through another financing source. Even if the insurance money your family receives from your SGLI policy is wisely invested, it may not be enough to adequately cover all of their needs after you're gone.
Related: Is SGLI Coverage Enough for My Family?
Are There Better Options Available?
While you should not necessarily cancel your SGLI coverage, you may want to supplement it with additional coverage from another policy, such as Armed Forces Mutual Level Term I. This policy, designed exclusively for servicemembers and their families, provides $500,000 in term life insurance for $29.50 per month (coverage is available in $5,000 increments from $50,000 up to $800,000). It also provides coverage until age 50 (age 40 for smokers), even after you leave the military when SGLI coverage ends. And, prior to age 48, you can convert up to 100% of the initial amount of your plan to an Armed Forces Mutual 5-Year Renewable Term or Value-Added Whole Life policy.
Related: Comparing Life Insurance Coverage Options
Opting to buy an additional policy like Level Term I to supplement your SGLI policy doesn’t mean you have to give up any other military-issued coverage. You can maintain your FSGLI spouse coverage at $100,000 ($6 per month) and TSGLI. The added benefit of Armed Forces Mutual life insurance is that your beneficiary can choose to receive the payout as a monthly income — and Level Term I includes $10,000 coverage for your eligible children at no additional cost.
Level Term I is just one option to supplement your SGLI coverage. Armed Forces Mutual offers a variety of life insurance products designed to meet the needs of servicemembers and their families throughout their military careers, and life. For instance, our Level Term II policy is a fixed premium term plan for those between the ages of 18 to 75. It provides an equally comprehensive, less expensive alternative to Veterans Group Life Insurance (VGLI). Or, if you’d like to add a permanent policy to your family’s protection plan that has a fixed premium, won’t expire, and builds cash value that can be accessed in the future, our Value-Added Whole Life plan is a great option.
With Armed Forces Mutual, You Gain Member Benefits
In addition to comprehensive, affordable life insurance plans, Armed Forces Mutual provides Members access to a wealth of valuable resources designed specifically for members of the military and their families, including:
- Pay by Allotment:Payments for your Armed Forces Mutual policies can be drawn directly from your paycheck, reflected on your LES, which makes it easy to remember to make payments. Allotment payments can also be transferred to your retirement pay.
- Career Assistance Program (CAP) Loan: Armed Forces Mutual Members currently serving in ranks E-4 to O-5, or who have separated in the last year, may qualify for a special benefit — a $5,000 personal loan at just 2.5% interest paid over 5 years.*
- AAFMAA Survivor Assistance Services: One of our greatest Member benefits that comes with every Armed Forces Mutual policy is our Survivor Assistance Services (SAS). Our compassionate, highly-trained SAS team helps the Member’s survivors understand and apply for the military and life insurance benefits they earned, helping to guide them through the claims process.
Explore Armed Forces Mutual’s SGLI Alternatives
Get better coverage for less by supplementing your SGLI with Armed Forces Mutual life insurance products. Call 866-533-0521 to speak with one of our life insurance experts, or request a free life insurance quote online.
*Subject to credit verification. Terms and conditions apply.
This article was originally published Ocotber 6, 2021.