Military Life Insurance Benefits
- The Servicemembers' Group Life Insurance program was originally established in 1965.Tomb of the Unknown Soldier, Arlington National Cemetery USA image by p_gangler from Fotolia.com
During the Vietnam War, United States military service members were faced with insurance companies that shied away from underwriting life insurance policies for them. To address this issue, the U.S. government established the Servicemen's Group Life Insurance program. In later years, the SGLI program was expanded to provide coverage for veterans, family members and traumatic injury protection. - In 1965, the Servicemens' Group Life Insurance program began with a coverage maximum of $10,000, and the program name was changed to Servicemembers' Group Life Insurance in 1997. In 2010, the maximum coverage amount stands at $400,000. Active duty service members are automatically enrolled at the maximum coverage amount, unless a written request is submitted to decline or reduce the coverage. The monthly SGLI premium is 6.5 cents per $1,000 of coverage. Upon release from active duty, a service member has 120 days to convert his SGLI coverage to a Veterans' Group Life Insurance policy or an allowable commercial policy.
- In 1971, the Veterans' Mortgage Life Insurance program was created as a mortgage protection policy for disabled veterans who required special modifications for their homes. On July 30, 2008, the program was expanded to include disabled active duty personnel with specially adapted housing. Policy benefits are paid directly to the mortgage holder upon the death of the insured. As of 2010, the maximum benefit amount is $90,000. Coverage is active until the mortgage is liquidated, paid in full or the policy is terminated.
- The Veterans' Group Life Insurance program was implemented in 1974. Upon separation from active military duty, service members were permitted to convert their SGLI benefits to a five-year VGLI term life policy. In December 1992, veterans were allowed to retain their VGLI term insurance for an indefinite period of time. In 2010, the maximum coverage is $400,000, and the VGLI coverage election cannot exceed the amount of SGLI coverage that was in place at the time of separation. The premium for the policy is determined by the veteran's age. Veterans can convert their VGLI policies to a qualified commercial policy at any time.
- Family Servicemembers' Group Life Insurance went into effect on November 1, 2001. The spouse of an SGLI service member participant is automatically enrolled with a maximum coverage amount of $100,000. If the SGLI coverage amount is less than $100,000, the spouse's coverage is lowered to match the service member's coverage. Children are automatically enrolled with a coverage amount of $10,000. FSGLI policy conversions are permitted within 120 days of the following events: service member terminates SGLI or FSGLI coverage, service member separates from active duty, death of service member or divorce. Child coverage is not convertible.
- Traumatic injuries have the potential to create a devastating financial hardship. In December 2005, traumatic injury protection was automatically extended to SGLI participants. Participants who experience an on-duty or off-duty traumatic injury event are eligible to receive TSGLI payments ranging from $25,000 to $100,000. Traumatic injury events include loss of sight, loss of hearing, loss of speech, paralysis, severe burns, amputations, severe facial injuries, traumatic brain injury and coma. The monthly premium for TSGLI coverage is one dollar per month.
