Life insurance premiums for military personnel, their families, and veterans are set to experience a significant reduction starting on July 1. Service members enrolled in Service Members’ Group Life Insurance (SGLI) will witness their monthly premiums decrease from 6 cents to 5 cents per $1,000 of coverage. Additionally, they will continue to pay $1 per month for SGLI Traumatic Injury Protection. This reduction means that for the maximum SGLI coverage amount of $500,000, the total monthly cost will drop from $31 to $26. This rate reduction is consistent for all service members regardless of age, and the coverage is available in $50,000 increments.
The driving force behind this reduction is the strong financial health of these insurance programs, a fact highlighted by the Department of Veteran Affairs (VA). What makes this change even more convenient for policyholders is that it will be implemented automatically, requiring no action on their part. The cost reductions come as a welcome relief to service members and could potentially ease some of the financial burdens associated with acquiring and maintaining life insurance coverage.
Decrease in Family SGLI and VGLI Premiums
For Family Service Members’ Group Life Insurance (Family SGLI), the premiums for spouses will also see an average decrease of 13%, with rates varying according to the spouse’s age. For instance, the premium for a spouse under the age of 35 will decrease from $4.50 to $4 per month for $100,000 of coverage. For spouses aged 40 to 44, the monthly premium will drop from $7 to $6.20 for the same coverage amount. These premium payments are conveniently deducted automatically from the service member’s pay if the spouse is registered in the Defense Enrollment Eligibility Reporting System (DEERS).
Veterans enrolled in Veterans Group Life Insurance (VGLI) will benefit as well, with an average reduction in premiums of 11%. The decrease will range from 2% to 17% depending on the veteran’s age. VGLI premiums increase every five years starting at the age of 30, and this reduction will be most noticeable in those under 30, where the monthly premium for $500,000 of coverage will drop from $35 to $30. Veterans aged 40 to 44 will see a $10 decrease, bringing their monthly premium for the same coverage amount to $70. For veterans aged 80 and older, the premium will reduce from $2,250 to $2,200, providing some financial relief in their later years.
Transition from SGLI to VGLI and Other Considerations
It’s important to note that SGLI coverage does not automatically transfer once a service member leaves the military. However, veterans do have options to convert their SGLI to VGLI within specific time limits. Veterans who sign up for VGLI within 240 days of leaving service can do so without needing to prove their health condition. This enrollment period provides a critical window for veterans to ensure they maintain life insurance coverage without requiring medical examinations that could otherwise increase their premiums or risk of denial.
While VGLI remains an invaluable option, it can be more expensive than SGLI, especially as the veteran ages. This cost consideration is why experts often recommend that veterans explore alternative life insurance options that may provide comparable or even superior benefits at a lower cost. This approach ensures that veterans select the best insurance coverage to meet their unique needs and financial circumstances.
Future Considerations and Financial Relief
Starting July 1, life insurance premiums for military personnel, their families, and veterans will see a notable decrease. Service members enrolled in Service Members’ Group Life Insurance (SGLI) will have their monthly premiums reduced from 6 cents to 5 cents per $1,000 of coverage and will still pay $1 each month for SGLI Traumatic Injury Protection. Consequently, the maximum SGLI coverage of $500,000 will now cost $26 monthly instead of $31. This price cut is uniform for all service members regardless of age, with coverage available in $50,000 increments.
The rate reduction is attributed to the strong financial standing of these insurance programs, as noted by the Department of Veteran Affairs (VA). This change will be automatically applied, so policyholders need not take any action. These cost reductions offer much-needed financial relief to service members, helping to alleviate some of the financial demands tied to securing and maintaining life insurance coverage. Lower premiums mean more affordable protection for those who serve.
