Life Insurance for Veterans: VA Benefits vs Private Coverage
If you are a veteran, you may already have some level of life insurance through the VA. Programs like SGLI (Servicemembers’ Group Life Insurance) and VGLI (Veterans’ Group Life Insurance) provide coverage during and after military service. But whether that coverage is enough, and whether it is the best deal available to you, are questions worth asking.
Many veterans discover that private life insurance offers more coverage at a lower cost than what the VA provides, especially as they get older. Here is how to evaluate your options.
VA Life Insurance Programs
SGLI (Servicemembers’ Group Life Insurance). This is the coverage you had while on active duty or in the reserves. It provides up to $500,000 in coverage at very low group rates. SGLI ends 120 days after you separate from service.
VGLI (Veterans’ Group Life Insurance). After separating, you can convert your SGLI to VGLI without a medical exam if you apply within 240 days. VGLI provides up to $500,000 in coverage and requires no health questions for the conversion. The premiums are based on your age at the time of conversion and increase every 5 years.
Other VA programs. The VA also offers Service-Disabled Veterans Life Insurance (S-DVI) for veterans with service-connected disabilities, and Veterans Affairs Life Insurance (VALife) for veterans with service-connected disabilities rated 0% or higher. These programs have specific eligibility requirements and coverage limits.
Where VGLI Falls Short
VGLI is a solid option in the first few years after separation, especially if you have health conditions that would make private insurance more expensive. The ability to convert from SGLI without health questions is genuinely valuable.
However, VGLI premiums increase every 5 years based on your age. What starts as an affordable premium in your 30s can become significantly more expensive by your 50s and 60s. And unlike private coverage, VGLI rates are not locked in. They will go up.
Private term life insurance, by contrast, locks in your rate for the entire term (10, 15, 20, 25, or 30 years). For a healthy veteran in their 30s or 40s, a private term policy often provides the same or more coverage at a lower total cost over the life of the policy compared to VGLI with its escalating premiums.
Private whole life insurance offers permanent coverage with premiums that never increase and cash value that builds over time. VGLI does not build cash value.
When Private Coverage Makes More Sense
For most veterans who are in reasonable health, private life insurance is worth comparing to VGLI. Here are the situations where private coverage often comes out ahead:
You are young and healthy. A private term or whole life policy locked in at your current age and health will almost certainly be cheaper over time than VGLI with its 5-year rate increases.
You need more than $500,000 in coverage. VGLI caps at $500,000. Private coverage has no such limit. If your family needs more protection, private policies can fill the gap.
You want permanent coverage. VGLI provides coverage but does not build cash value. If you want lifelong protection plus a financial asset that grows over time, a private whole life or IUL policy serves both purposes.
You want your rate locked in. VGLI premiums increase every 5 years. Private term premiums are fixed for the entire term. Private whole life premiums are fixed for life.
When VGLI Makes More Sense
There are situations where keeping VGLI is the right call:
You have significant health issues. If you developed a serious health condition during or after service that would make private insurance expensive or difficult to qualify for, VGLI’s no-health-question conversion from SGLI is extremely valuable. You may not be able to get comparable coverage privately at any price.
You are within the 240-day conversion window. If you just separated and are not sure about your health or your plans, converting to VGLI gives you guaranteed coverage while you evaluate private options. You can always replace VGLI with a private policy later if you find a better deal.
You have a service-connected disability. VA-specific programs like S-DVI and VALife may offer coverage that is not available through private carriers, or at rates that account for your service-connected condition differently than the private market would.
The Smart Approach: Compare Before You Decide
The best thing you can do is compare. See what private coverage you qualify for and at what rate, then weigh that against your VGLI premiums and the projected increases over time.
Many veterans are surprised to find that a private policy provides better value, especially when they lock in rates while they are still relatively young and healthy. Others find that VGLI is the better option given their specific health situation. Either way, you should know your options before making a decision.
You can also layer coverage: keep VGLI for a base level of protection and add a private policy on top of it for additional coverage at locked-in rates.
We Work With Veterans Every Day
Our team helps veterans compare their options and find the coverage that makes the most sense for their situation, health, and budget. We understand the VA programs and can show you how private coverage stacks up against what you already have.
If you are a veteran and want to see what private coverage you qualify for, we will walk you through it with no pressure and no obligation.
See what you qualify for today or call us at (888) 840-6183.
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