VGLI – Do Veterans Have More Affordable Options?

VGLI – Veterans Group Life Insurance Review

VGLI is the life insurance benefit provided to military members after they separate from service.

This benefit is designed to offer service members an easy transition of their life insurance plan while entering into civilian world.

Service members should always try to purchase a private market insurance plan while on active duty to complement their Service Members Group Life Insurance. That way, when separation or retirement comes around the veteran won’t be required to rely solely on their VGLI benefit.

Although the VGLI is a nice benefit, I wouldn’t recommend this as a veteran’s first choice for life insurance protection.

Veterans may very well find a lower priced policy on the private market. It does depend on their overall mental and physical well being.

Coverage Limitations – Benefit Maximum

The total amount of coverage provided under this program may be insufficient. The maximum $400,000 may not cover the veterans needs. Veterans should complete a needs analysis with a life insurance professional or a fee only financial representative to get an idea of how much coverage they need.

Building a legacy with your life insurance policy should be the main focus. That cannot always be done with the VGLI because the maximum amount of coverage is $400,000.

Policy Type – Increasing Term

The VGLI is not all that competitive when you consider the fact it is an age renewable policy.

One key take away is that when you lock in a level term policy with a private insurance company there is no ability for your insurance company to increase your rate. The VGLI plan is always subject to a rate change since it is a group verses and individual plan.

A shorter term may work well for people in some situations, but in general my recommendation is to look into a 10-30 year level term to lock in the rates in conjunction to building savings and investments. That way there is no need for lifetime coverage which is generally more expensive.

The VGLI benefit is a term policy that renews by your age. You do not have the option to buy a 20 or 30 year term through the VGLI life insurance program.

VGLI Rate Comparisons

Life insurance rates are based on age. The younger and healthier you are, the better it is to lock it in for as much as you can afford.

I ran a comparison between the VGLI and rates with A rated carriers for a male, non smoking veteran at the age of 32. Assuming he may have some mild health conditions, I ran the quotes at a standard versus preferred rate class.

This veteran could obtain a $250,000 20 year level term plan for about $24.98 a month. Over the course of the 20years he’d pay about $5,995.20.

With the VGLI plan he’d pay a total of about $8,000 to get him to the age of 52.

That is a savings of about $2,004.80. I am sure he can find something else to put that money towards. If he was able to qualify for an excellent or preferred rate class he’d save even more by going with a private market plan.

Now that you know there can be a huge difference in the rate comparisons between the VGLI and private market carriers, it’s a good time to re-think whether or not to even opt into the VA benefits.

Believe it or not, it is optional.

Why not put the money you save from opting out of this benefit and put it towards a savings goal? Just make sure you qualify and lock in your private market life insurance before cancelling your VGLI benefit!

The Basics of Applying for VGLI

Life as a service member is routinely stressful. Many families often joke that you can’t plan anything while in the military!

One thing you can plan is your VGLI conversion. If you decide to participate in the VGLI, follow this guide to make sure you do not lose it in case it is indeed your best option.

The time frame given in order to apply for VGLI. From the time a service member leaves the service, they have 120 days of FREE SGLI coverage.

If a service member wants to convert their SGLI coverage to VGLI with no health requirements, they have to apply within 240 days from their separation date.

Keep in mind there is no SGLI coverage from day 121 to the day the SGLI is converted into VGLI.

If the service member happens to miss the application date time frame with no health requirement (within the 240 days), they still have the opportunity to apply for coverage.

SGLI can no longer be converted into VGLI past 485 days which is 1 year and 120 days from the date of separation.

If a service member plans on keeping this coverage, it’d be ideal to apply within the time frame with no health requirements. If a service member has to go through the health analysis, they could be denied coverage.

A very important factor to mention is the date your separation from service actually begins. This can vary based on your service member status.

Take a look at the list below for guidance:

  • Active Duty Military – Date of military separation or retirement (DD-214)
  • National Guard or Reserve – Date of military separation or retirement (e.g. NGB-22,separation orders)
  • Temporary Disability Retired List (TDRL) – Date of Temporary Disability Retired List
  • Individual Ready Reserve – Date Assigned to IRR

Take note that a service member can apply for VGLI only up to the amount of their SGLI purchased while on active duty. They can also reduce the coverage if desired.

The main take away is, if they need more coverage at any time in their life they will need to obtain coverage from a private company.

military life insurance calculator

Additional Veteran’s Life Insurance Programs

Although the VGLI is the main life insurance benefit available to veterans, there are a few others.

S-DVI aka Service-Disabled Veterans Insurance

This is another life insurance for military benefit offered to veterans with service related disabilities. This is a life insurance policy available with a maximum amount of coverage at $10,000.

This can be purchased in the form of term or permanent insurance. There is also a Supplemental S-DVI plan available for veterans who are totally disabled provided they meet certain eligibility requirements.

You can find more information about this plan on the VA’s S-DVI page.

VMLI aka Veterans Mortgage Life Insurance

There is one more life insurance for military benefit provided to veterans with service related disabilities. This is known as the VMLI.

The purpose of this program is to assist military families pay off a mortgage balance in the event of the veterans death. The policy benefit is not payable to the veterans family members but to the mortgage holder.

The amount of coverage will be equal to the balance owed and can never exceed $200,000.

For more information on this benefit see the VA’s VMLI page.


Veterans should definitely include these benefits in their options as they seek life insurance after the military.

However, it can save them lots of money if they shop around and qualify for a better plan.

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