SGLI Reshapes Reservists Life Coverage

The maximum death benefit is now $250,000, and service members also can buy term life coverage for their spouses and children.

Starting July 1, service members who buy SGLI coverage to insure their own lives will pay only 6.5 cents per month per $1,000 of coverage, or $16.25 per month for $250,000 in coverage, down from the current level of 8 cents per $1,000 of coverage, or $20 per month, the VA says.

When service members who have SGLI leave the service, they can convert to five-year term policies from the Veterans Group Life Insurance program, or they can convert to whole life policies from one of the dozens of commercial insurers that offer SGLI conversion policies.

Former service members can also get VGLI coverage on a guaranteed-issue basis if they pay the required premium within 120 days of separation from the service, the VA says.

For service members who will see active duty, one big advantage of having SGLI coverage is that the SGLI policies pay benefits even if insureds die in combat.

Some mutual insurers that cater to service members and some publicly traded life insurers also sell policies without war exclusions.

For instance, Jefferson Pilot Financial, Greensboro, N.C., a unit of Jefferson-Pilot Corp., notes on its Web site that “Jefferson Pilot Financials group life insurance contracts do not contain exclusions for losses due to war or acts of war, or for losses sustained during military service.”

But the armed services recommend that their members accept the SGLI coverage because “so many civilian policies do have war exclusions,” Alexander says.

More information about the SGLI and VGLI programs is available at http://www.insurance.va.gov/sgliSite/default.htm.

Reproduced from National Underwriter Edition, May 12, 2003. Copyright 2003 by The National Underwriter Company in the serial publication. All rights reserved. Copyright in this article as an independent work may be held by the author.