When you’re a servicemember transitioning out of the military, securing financial protection for your family is a top priority. One crucial, often overlooked step in this process is replacing Servicemembers’ Group Life Insurance (SGLI) with a suitable civilian life insurance policy before filing a VA disability claim. Doing so can help you avoid increased costs, reduce the risk of denial, and provide your family with lasting security.
Losing Your SGLI Coverage
When you leave active duty, you maintain your SGLI coverage for 120 days following your separation date. Though you can get an extension for up to two years of coverage under the SGLI Disability Extension (SGLI-DE) if you’re totally disabled, it requires VA approval — and there’s no guarantee your disability claim will be decided quickly. If you wait until your claim is processed, you may find yourself uninsured or scrambling for expensive or limited alternative insurance options. Even if you do receive the two-year extension, you’ll still need life insurance coverage when it ends.
Stay Protected by Replacing SGLI
A great way to ensure continuity of coverage and to improve the rates you pay for your life insurance as a civilian is to apply for it while you’re still healthy — and before you leave military service. Private life insurance rates are based heavily on your age and health at the time of application. Once you file a VA disability claim, any service-connected conditions you report, such as PTSD, sleep apnea, or even minor back issues, can appear on your medical record. Private insurers may interpret these as high-risk factors, even if your condition is well-managed. Locking in life insurance before those conditions become part of your official record will increase your chances of being approved at a lower premium.
A VA disability rating can take months to finalize, and private life insurance can take anywhere from 4-8 weeks to process. If your SGLI expires in the meantime, your family may be left financially vulnerable — and denial or delays could leave you without coverage when you need it most. To avoid getting caught in that gap, start your life insurance application before initiating the VA claim process.
The table below offers an example of possible Armed Forces Mutual rates you might secure before and after filing and receiving results of a VA disability claim:
| AGE |
SUPER SELECT |
SELECT |
STANDARD |
CLASS 1 |
CLASS 2 |
| 45 - 49 |
$81.50 |
$104.00 |
$167.50 |
$335.00 |
$418.00 |
| 50 - 54 |
$81.50 |
$104.00 |
$167.50 |
$335.00 |
$418.00 |
| 55 - 59 |
$81.50 |
$104.00 |
$167.50 |
$335.00 |
$418.00 |
| 60 - 64 |
$81.50 |
$104.00 |
$167.50 |
$335.00 |
$418.00 |
| 65 - 69 |
$81.50 |
$104.00 |
$167.50 |
$335.00 |
$418.00 |
Considering VGLI? Understand the Impact.
One other option you can consider is to convert your SGLI coverage to Veterans’ Group Life Insurance (VGLI) after your separation from military service. It’s important to note that you must apply for it within 240 days of separation to receive coverage without a medical exam. After that window, you will need to answer health questions and meet certain health requirements in order to qualify. Additionally, VGLI premiums increase every five years and can become expensive in the long term, and servicemembers are only eligible to apply for VGLI within one year and 120 days of being released from active duty. Eligibility ends forever once that window closes.
Term life or whole life insurance are alternative coverage options you can acquire from a reputable private provider. One that is military-affiliated may even offer better coverage and lower rates if you apply while you are still young and healthy.
Plan Ahead for Your Family’s Security
Transitioning out of the military brings significant changes in your life, including many situations you can’t control or plan for. One aspect of your transition that you can control is protecting your loved ones’ financial future with comprehensive life insurance, no matter the outcome of your disability claim.
Replacing your SGLI with private life insurance right now can help you maintain control over your coverage, lock in better rates, and avoid leaving your family unprotected. Contact an Armed Forces Mutual Membership Coordinator today at 800-522-5221 or get a quote now.