Adapting to civilian life can be hard.
Between reconnecting with friends and family, finding a job, and establishing a civilian routine, leaving the military brings a lot of unique challenges.
Among these challenges is finding new life insurance.
Your family has worried enough while you were on deployment. They shouldn’t have to worry if the worst happens.
A good life insurance policy can make sure your family is taken care of in the event of your death. Life insurance will cover funeral costs and loss of income so your family won’t have to be even more burdened by your passing.
While on active duty, your life insurance was taken care of. The military automatically enrolls active personnel in Servicemember’s Group Life Insurance.
Upon leaving the military, it gets a little more complicated.
While you can transfer your SGLI coverage into VGLI (Veteran’s Group Life Insurance), you might rather look to a private insurance company for coverage.
In this article, we’ll take an in-depth look at the different options available for veteran life insurance coverage.
VGLI Veterans Life Insurance
After discharge, you will have a period of time in which you can transfer your SLGI coverage to VGLI. While this is convenient, it may not be your best choice.
Now that you have private options available, VGLI may not be your best bet.
Benefits of VGLI
If you are an eligible veteran, you cannot be turned down for VGLI coverage.
There are no medical exams to take. You will not be denied based on health issues.
Unlike private insurance policies, it does not matter if you are overweight or if you use tobacco products.
Your amount of coverage is not subject to change. You will retain the same amount of coverage throughout the life of the policy.
There are also no extra fees for membership or enrollment.
Drawbacks of VGLI
While it’s difficult to beat guaranteed coverage, there are a few disadvantages to VGLI coverage.
The only determining factor of VGLI monthly payments is age.
VGLI rates increase every five years. While this makes it very affordable for younger veterans, older individuals pay a much higher monthly payment.
Veterans under thirty may pay as little as $32 per month. However, if they keep that same policy into their seventies, they may pay over $1,000 per month.
It’s also worth considering that VGLI only offers term life insurance. Term life insurance has no value outside of death benefit, and cannot be cashed out as an investment.
Private Life Insurance
You may decide that VGLI is not the best option for your veterans life insurance. The private sector has hundreds of solutions you can look to.
Unlike VGLI, which is managed by the government, private life insurance policies are very competitive. This usually translates to better coverage for customers.
Some private companies will allow you to convert your VGLI coverage into a comparable policy.
While there is a huge variety of life insurance companies with a wide nuance of policies, there are two main types of life insurance: term life and whole life.
Term Life Insurance
Term life insurance provides coverage throughout the specific term of the policy.
The monthly payments for term life are usually much cheaper than whole life.
Typically, these policies last as few as ten and as many as thirty years. But, different companies offer different term lengths.
At the end of your term, you may extend, convert, or renew your coverage.
Extending Your Term Life Insurance
Extending your coverage is convenient, especially if you are too old to apply for a new policy. However, your monthly premiums will likely increase significantly.
You can convert your coverage to a whole life policy. This will likely have to be done before the expiration of your term.
Converting Your Term Life Insurance Policy
Converting your policy has a number of benefits. Chief among them, you will not have to prove eligibility again. This is perfect if you have developed any health conditions that would prevent you from getting new insurance.
Renewing Your Term Life Insurance
Renewing your insurance for another term is likely the cheapest option. However, you will need to prove your eligibility again.
This is easy to do if you are young or in good health. It’s a different story if you are over seventy, or if you have developed any health issues. You will likely be unable to renew your policy.
Permanent Life Insurance
Unlike term life insurance, permanent life insurance coverage is active throughout the insured person’s entire life. Permanent life insurance policies remain in force as long as the premiums are paid.
Because they are active for the entire life of the payee, premium payments are generally much higher than with term life insurance.
In some cases, the policy has a maturation date. When a person reaches its maturity date, the insurance company will turn over the cash value of the policy to the insured.
However, even before reaching the maturation date, you may have the option of cashing in your policy. You will receive a guaranteed return on the premiums you have paid into the policy.
This is a good option if you are in good health and suffer a financial emergency. You can also reinvest that cash out into a better life insurance policy.
While VGLI is the most common provider of veterans life insurance, it is not the only option for military veterans.
The American Armed Forces Mutual Aid Association (AAMFAA) offers life insurance for veterans and their families.
The AAMFAA is a non-profit mutual fund, so it can offer policies at a lower price than private companies.
The United States Automobile Association (USAA) is committed to serving military servicemen. As such, they proudly offer specialized veterans life insurance policies. Be sure to check out our full USAA life insurance review to learn about the available coverage options for active duty and non-active duty military members.
Need Personalized Advice?
Are you a veteran who is looking for a good life insurance policy, but you need help with the next steps?
Give us a call. A Top Quote Life Insurance agent would love to help you find the right veterans life insurance policy for you.
Contact us today, and let us help you get your peace of mind.
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