Leaving the military and entering civilian life is a significant change that comes with many uncertainties. Among the most pressing concerns for service members leaving the armed forces is the potential loss of various benefits they’ve relied on during their military careers.
From healthcare and education to financial and emotional support, understanding how these changes affect you and your family is crucial for a smooth transition. Here’s an overview of the key benefits that transitioning service members often lose upon leaving the military—and how to adapt.
Health Insurance and Life Insurance for Civilian Life
Shifting back to civilian life after military service often means finding alternative health care services and insurance options. Transitioning service members and their military families looking to make a smoother transition from military to civilian life can prepare for future challenges and unforeseen events by making informed decisions about these critical services.
TRICARE Coverage Loss
Active-duty members and their families are accustomed to TRICARE’s robust healthcare benefits. However, TRICARE coverage ends upon discharge. There are exceptions for those who qualify for specialized TRICARE plans, such as TRICARE Reserve Select or TRICARE Retired Reserve.
For example, National Guard and Reserve members who continue to serve may be eligible for TRICARE Reserve Select. Retirees under the age of 60 can explore TRICARE Retired Reserve as a transitional option until they qualify for TRICARE Prime or TRICARE Standard at age 60.
Resources for Healthcare Alternatives
Veterans who don’t qualify for TRICARE options can explore coverage through employer-sponsored health plans or health insurance marketplaces. Additionally, the Department of Veterans Affairs (VA) offers healthcare services for eligible veterans, which may include primary care, specialized services, and mental health support.
It’s essential to assess your healthcare needs and compare available options well before your military separation to ensure no lapse in care for you or your family. Taking proactive steps to research and enroll in a suitable health plan ensures you can continue to prioritize your well-being during the transition to civilian life.
SGLI Conversion After Military Career
As an active-duty service member, you were likely covered by Servicemembers’ Group Life Insurance (SGLI), which provides low-cost life insurance to protect you and your family. However, this coverage ends upon your separation from the military, leaving a critical gap if you don’t take steps to secure new life insurance.
Fortunately, the Department of Veterans Affairs offers Veterans’ Group Life Insurance (VGLI), a renewable term life insurance program allowing you to convert your SGLI coverage to VGLI.
To make the conversion, you must apply within 240 days of separation to skip a medical exam and avoid potential disqualification due to health conditions. If you miss this window, you can still apply within a year and 120 days, but approval will require passing a medical screening. Taking action early is critical to avoiding gaps in coverage that could leave your family vulnerable.
VGLI vs Private Commercial Life Insurance
Veterans’ Group Life Insurance (VGLI) can be a great resource for facilitating the transition process of military service members, ensuring there are no gaps in their life insurance coverage when they leave service. However, it might not be the best life insurance for everyone, depending on finances, personal goals, and a variety of other factors. It is, therefore, important to consider all available resources when it comes to navigating the life insurance transition process.
The other option that retiring service members have for securing new life insurance coverage before their SGLI expires is to convert SGLI to private commercial life insurance, rather than VGLI. To convert SGLI to commercial life insurance without having to show proof of good health, a retiring service member must apply within 120 days of their date of separation. Note that this is a shorter window of time than the SGLI to VGLI conversion. So, it is important to prepare for this conversion process as soon as possible.
When converting SGLI to commercial life insurance, you can only convert to a permanent life insurance policy, such as whole life insurance, rather than term life insurance. Take advantage of the resources available to you, such as speaking to a life insurance agent or a financial advisor, to understand the pros and cons of these different options in terms of finances, benefits, and more. Taking care of this important decision as soon as possible will help bring peace of mind to you and your family.
New Careers: Education and Training Benefits for Service Members
Education and training benefits are a cornerstone of the military’s support system for service members, but they can be affected by your separation. These benefits, which empower service members to further their education or gain new skills, often require careful planning to maximize their use post-service. If leveraged properly, they can be important resources for securing civilian jobs.
The GI Bill
The Montgomery GI Bill and Post-9/11 GI Bill are invaluable resources that provide financial support for veterans pursuing higher education or skills training. They also offer options to transfer unused benefits to dependents, but this must typically be done while still serving. However, eligibility requirements and usage rules can vary depending on your service status.
For instance, the Montgomery GI Bill-Selected Reserve (MGIB-SR) is available only to those who remain in the reserves, meaning leaving the military could limit access to these funds. It’s crucial to review your eligibility criteria before separation to ensure you make the most of your benefits.
Veteran Readiness and Employment (VR&E)
Veteran Readiness and Employment (VR&E) services are designed to assist veterans with service-connected disabilities to identify new career opportunities and meet career goals. These benefits include career counseling, training programs, and job placement assistance to help veterans adapt their skills to new jobs and career paths. VR&E can also cover tuition, supplies, and even supportive technologies needed for specific roles.
However, access to VR&E often hinges on eligibility criteria and the timing of your application, as services are generally tied to your separation status. Talk to a VA counselor early in your transition to ensure you can fully access these benefits.
Financial and Retirement Benefits After Military Service
Leaving the military affects not only your current income but also your long-term financial security. Adjusting to changes in retirement benefits and financial planning is essential for stability post-service.
High-36 Model Retirement Pay
The High-36 Model calculates retirement pay based on your highest 36 months base pay. While this system offers stability for many retirees, your final pay depends on your length of service and rank at separation, so it may not be enough to support you and your family.
For those retiring after 20 or more years of service, the High-36 Model provides a predictable and reliable income stream, though careful planning is still essential to ensure it meets your long-term financial goals.
Thrift Savings Plan (TSP)
The Thrift Savings Plan (TSP) is a low-cost, tax-advantaged way for service members to build wealth over time. However, when you leave the military, your automatic contributions to the TSP will stop. While you can no longer contribute directly, you retain control of your account and have the option to roll it into a civilian employer’s 401(k) plan or an individual retirement account (IRA).
To keep your retirement savings on track, it’s important to evaluate your options and consider whether to leave your funds in the TSP, where they’ll continue to grow, or transfer them to another plan for additional investment flexibility.
New Routines: Family Life After Leaving the Military
Transitioning out of the military doesn’t just affect your benefits—it also impacts your daily lifestyle and family dynamics.
Commissary and Exchange Privileges
Military commissaries and exchanges offer discounted shopping for groceries and goods, which can save families significant money. Losing these privileges often means higher expenses for daily necessities. Planning your budget to account for these increased costs can help ease the transition.
Base Housing and Relocation
Base housing and subsidized relocation services are major perks of military life. When you leave the service, you lose access to these benefits, often requiring out-of-pocket expenses for housing and moving. Exploring civilian housing options early can help you secure an affordable and suitable home for your family.
Dependents’ Education Benefits
Education benefits for dependents, such as those available through the GI Bill, can be affected by your transition. If you haven’t transferred unused benefits to your children or spouse, you may lose the opportunity. Reviewing these benefits before leaving the military ensures your family can continue to access educational support.
Emotional and Psychological Support When Leaving the Military
Adjusting to civilian life can bring emotional and psychological challenges. From navigating PTSD to finding a sense of purpose post-service, many veterans face difficulties during this transition. Fortunately, there are support systems available to help.
Psychological Support for Military Transition to Civilian Life
Transitioning from military to civilian life can bring emotional challenges, including stress, anxiety, and post-traumatic stress disorder (PTSD). These feelings are common as veterans adjust to a new routine, work environment, or a sense of purpose outside the structured life of the military. Acknowledging these challenges is the first step toward finding support and building a healthy transition.
Counseling services offered through the Department of Veterans Affairs (VA) and veteran organizations provide vital resources to help navigate these emotional hurdles. Seeking help early eases the transition for you and ensures your family has the support they need during this significant life change.
Convert Your SGLI to Permanent Life Insurance with AmFi
Leaving the military marks a new chapter in life that’s filled with opportunities and challenges. Understanding how your benefits change—and taking proactive steps to address those changes—can make this transition smoother and more manageable. From healthcare to education to financial planning, the key is preparation.
If you’re considering your SGLI to VGLI conversion options, contact American Fidelity Life Insurance today to ensure your family’s financial future is secure as you move into civilian life.