Veterans Universal Life Insurance

There is one particularly inexpensive, yet invaluable, benefit that is offered to every single one of our military service members and veterans: universal life insurance coverage.

In the late 1940s, the United States government initiated a life insurance program that was specifically designed to guarantee veterans universal life insurance services and coverage. The Department of Veteran’s Affairs has since made this insurance coverage available to all active duty and retired service members, regardless of the duration of their military service, the military branch they belong to or if they have served in a war or not. It is also available to members of the National Guard and the Reserves. Veterans of the First and Second World Wars, as well as the Korean War can also take advantage of the group life insurance benefits, which were not readily available at the time that they were in active service.

There are two low-cost life insurance benefits packages:

• The Servicemembers’ Group Life Insurance program (SGLI) - created for active duty members of the U.S. military forces. Once these service members retire, they have the option of extending their government life insurance coverage by converting their SGLI coverage to VGLI coverage.
• The Veterans Group Life Insurance program (VGLI) - created for retired members of the U.S. military forces.

The need for this government-sponsored program arose from the fact that the commercial life insurance industry could not provide adequate or affordable insurance coverage for military personnel. Given the high-risk nature of the military line of work, service members have always been poor candidates for regular insurance at standard rates. The program was also intended to encourage as many service members as possible to obtain life insurance for themselves and their families.

Features of Veterans' Group Life Insurance (VGLI) include:

• VGLI is a renewable term life insurance policy, which is available to service members who have SGLI coverage at the time that they retire from service. They must have been honorably discharged.
• This coverage can be purchased in $10,000 increments, up to a $400,000 maximum. The selected coverage cannot exceed the coverage limits that the service member had under the SGLI policy.
• Service members have to convert to VGLI coverage within a year and 120 days following their discharge date. Beyond this date, they will be ineligible for the coverage.
• If the service member makes the conversion with 120 days, they are not required to take a physical or provide proof of good health.
• The rates of the VGLI policy are calculated based on the age of the service member at the time that they convert from SGLI to VGLI coverage. Traditional requirements such as a proof of income, high credit scores and the like do not factor into this calculation.
• A service member can convert their VGLI term insurance policy to a commercial permanent policy at any time. There are more than 45 commercial life insurers who can provide a conversion policy.
• The spouses and dependant children of service members can purchase a VGLI insurance policy.

While there are a number of organizations that also offer life insurance to service members, there is a key difference between the commercial insurance coverage and the coverage offered by the Department of Veteran’s Affairs. Commercial providers are highly selective regarding who they will cover. Veterans universal life insurance offers cost-effective coverage that is available to all veterans and their families.

The competitive benefits of the VGLI program are borne out by the fact that more than 98% of the armed forces service members have opted to purchase this coverage over commercially-available life insurance.

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