Servicemembers’ Group Life Insurance (SGLI) plays a crucial role in providing financial security for military families. Whether you’re just starting your career in the military or nearing retirement, understanding the benefits and options available through this program is essential for planning your future. In this blog, we’ll explore how SGLI works, its key features, and why it’s a valuable part of your overall financial protection strategy.
What Is SGLI Insurance?
What is TSGLI?
Traumatic Servicemembers’ Group Life Insurance (TSGLI) is an additional SGLI benefit that provides financial assistance to service members who suffer serious injuries due to a traumatic event. TSGLI offers a one-time, lump-sum payment to help with recovery and associated expenses, regardless of whether the injury occurred on or off duty. It covers a wide range of injuries, including the loss of limbs, severe burns, or paralysis, and the amount paid depends on the severity of the injury. This benefit is automatically included in SGLI policies and is designed to help injured service members and their families during the challenging recovery process.
How Does SGLI Work?
SGLI coverage is automatically initiated for most eligible active duty service members. However, participation is optional, and they can either decline coverage or select a lower amount based on their individual needs. Coverage is available in increments of $50,000, up to a maximum of $500,000. Service members can choose who receives their death benefit, such as their dependents, children, or spouse.
Service members can adjust their coverage as necessary, and coverage remains active as long as the service member is eligible. It can be converted to Veterans’ Group Life Insurance (VGLI) without a health exam within 240 days of military separation, ensuring military members and their families have continuous coverage.
Does SGLI Have Cash Value?
SGLI is a term life insurance policy, meaning it does not accumulate cash value like commercial permanent life insurance policies. The focus of SGLI is on offering financial protection in the event of death during service rather than building equity over time. This structure allows the program to maintain low premiums while still providing significant coverage for military service members and their families.
Monthly SGLI Premium Rates
Monthly SGLI Premium Rates
| Coverage Amount | Monthly Premium | Monthly TSGLI Premium | Total Monthly Premium Deduction |
| $50,000 | $3 | $1 | $4 |
| $100,000 | $6 | $1 | $7 |
| $150,000 | $9 | $1 | $10 |
| $200,000 | $12 | $1 | $13 |
| $250,000 | $15 | $1 | $16 |
| $300,000 | $18 | $1 | $19 |
| $350,000 | $21 | $1 | $22 |
| $400,000 | $24 | $1 | $25 |
| $450,000 | $27 | $1 | $28 |
| $500,000 | $30 | $1 | $31 |
Recent Changes in SGLI Coverage
The Servicemembers’ Group Life Insurance program recently underwent significant changes to enhance the financial protection offered to military members and their families. These changes include:
- Increase in Maximum Coverage Amount: A recent legislative change introduced through Public Law 117-209 increased the maximum SGLI coverage amount from $400,000 to $500,000. This increase will be automatically applied to all eligible service members. This includes those who are currently enrolled in SGLI, as well as those who previously opted out. Service members who do not wish to retain the increased coverage can choose to reduce it or decline it through the SGLI Online Enrollment System (SOES).
- Premium Rates: Despite the increase in coverage, the premium rate remains affordable at 6 cents per $1,000 of coverage. For the new maximum coverage of $500,000, the monthly premium is $30.
- Provision for Dependent Children: Children dependent upon the enrolled service member are automatically covered by SGLI at no additional cost.
Implications of Recent SGLI Coverage Changes
The recent changes to SGLI coverage have several important implications for service members and their families. While the increase in maximum coverage offers enhanced financial protection, there are key details and limitations that should be understood, including:
- Retroactive Death Benefits Limitation: The increase in SGLI coverage to $500,000 does not apply retroactively. This means that any deaths occurring before the effective date of the new coverage will not be eligible for the increased death benefit. Families of service members who passed away before this date will still receive benefits based on the previous maximum of $400,000.
- TSGLI and FSGLI Coverage: The changes in SGLI do not affect TSGLI or FSGLI \ (Family Servicemembers’ Group Life Insurance). TSGLI and FSGLI continue to function independently from the core SGLI coverage, ensuring that service members and their families maintain specific protections tailored to their unique needs.
Keeping Informed: News and Updates
Staying updated on SGLI-related news and policy changes is crucial for ensuring that service members and their families maintain adequate financial protection. Legislative updates, like the recent increase in coverage, can significantly impact the benefits and options available to you. You can find information regarding SGLI through the VA, SOES, and military benefits advisors.
Post-Service Life Insurance Options
Veterans Group Life Insurance (VGLI)
Veterans’ Group Life Insurance (VGLI) is a term life insurance program that allows former service members to continue their life insurance coverage after leaving the military. Veterans can convert their SGLI coverage to VGLI coverage without undergoing a medical exam if they apply within 240 days of separation. Veterans can choose coverage in $10,000 increments up to the maximum amount of their SGLI coverage.
VGLI is best suited for veterans who want to maintain life insurance coverage after transitioning out of active service, particularly those with medical conditions that may limit their ability to qualify for new private insurance policies. It’s also a good option for those who desire flexible, term-based, cost-effective coverage.
Commercial Life Insurance Policies
Commercial life insurance policies are offered by private insurers and can offer term or permanent coverage. Unlike SGLI or VGLI, these policies often require an underwriting process, where factors like age, health, and lifestyle are considered to determine premiums. AmFi is one of the few insurers that offer the option to convert SGLI and VGLI policies to commercial policies.
Those who already hold SGLI or VGLI policies can purchase commercial life insurance to supplement their existing coverage. This is particularly useful for those who may want additional financial protection for their families or who seek a policy that includes cash value accumulation.
For veterans in good health, commercial life insurance can offer more competitive rates and customizable options. These policies can also provide a broader range of coverage amounts, depending on individual financial needs and long-term goals. However, veterans with pre-existing health conditions might find it more challenging to secure favorable rates with some insurers.
Conclusion
Servicemembers’ Group Life Insurance provides essential financial protection for military members and their families, offering flexible and affordable life insurance coverage throughout their service. Understanding the options available through SGLI, as well as supplemental insurance like VGLI and commercial life insurance, allows service members to make informed decisions about their financial security and plan for their family’s future.
If you’re looking to explore additional life insurance options, convert your SGLI policy, or purchase a supplemental policy, AmFi is here to help. Our team can guide you through enrollment, policy conversion, and finding the right coverage to suit your unique needs. Contact AmFi today to learn more about how you can protect your loved ones with the right life insurance plan.
