As many know, I recently had another addition to our family. Naturally for me, that meant I needed to update my life insurance policy to add my daughter and seek out more coverage. This started to get me thinking about my husband’s SGLI (as it is his only life insurance policy).
Do you know all the facts about SGLI (Servicemembers Group Life Insurance)?
One thing as a young adult that many of us overlook is life insurance. However, if you have a family or your active duty member is the sole provider (or perhaps a main contributor), you want to prepare for the absolute worst case scenario. The military offers SGLI (which ALL members should take in my opinion because it’s dirt cheap for the amount of protection is covers).
Let’s talk about why this is important.
Service members of all five branches (Air Force, Army, Coast Guard, Marines, and Navy) are automatically eligible for full coverage. This is great because after passing all the necessary medical exams just to get into the service, they do not have to do anything else to receive coverage – unlike outside coverage providers.
The amount of coverage is up to $400,000 (or as little as $50,000 and up in $50k increments).
What does this mean for your monthly paycheck?
For $50,000 – it is $3.50 (your daily cup of coffee).
For $400,000 – it is $28.00 (one family meal to a fast food restaurant).
Why take $400,000? Mortgage, bills, and college tuition to name a few.
Now while many spouses already know about SGLI, you may not realize that this insurance does not follow your Active Duty member out of service. It only is covered up to 120 days after separation, unless the member becomes disabled. In that circumstance, they can apply for a 2-year extension.
It is very important for the service member to take advantage of VGLI (Veterans Group Life Insurance) within 120 to 240 days after separation. If they do, they do not have to answer additional medical questions which could increase your premiums A LOT!
Let me explain – most people go into the service around 18-21 years of age. They are healthy and in good shape. Fast forward 20 years to retirement, now you are 40 years old, marriage and baby weight has set in, working out isn’t the top priority, etc. Outside life insurance increases rates for each year of age – which is why it is important for you – SPOUSE – to get your coverage earlier rather than later. That health questionnaire could be the difference between premium rates and most people are healthier earlier in life!
VGLI is an excellent option for retired or separated members that want to continue their life insurance. Since the age of the member has increased – the rates will increase too. You can check those rates here. A $400,000 policy will cost between $68-88 per month for someone in their 40’s and will increase over time, whereas a $100,000 policy will cost $17-22 per month for the same person.
Since rates increase with age, rates can change based on gender, health, and lifestyle choices. When you rollover the SGLI to VGLI – your rates are based on age only. For those that use tobacco products – this is important because it will be very difficult to find a plan that compares with similar rates. Additionally, if you sign up within the allotted window, they will not give you a medical exam or investigate your health. You will not find this for most policies.
I can tell you that I was just asked simple health questions that included whether I use tobacco products and whether or not I am under the care of a physician for certain medical conditions or PTSD. If any of these apply to you, this is another reason to consider rolling your plan over.
One thing I wanted to ensure was that I had enough coverage on myself in case something happened to me. For the active duty member, you may find that $400,000 is not enough – you have a larger mortgage, multiple kids, etc. You can layer your coverage with outside coverage from USAA (I have mine through them and they are a great policy), MetLife, New York Life, or even your bank or insurance company may offer them.
To layer coverage, you will need to have a medical exam done to determine what premium you will pay. If the service member uses tobacco products, this is a HUGE factor on why they should NOT decline SGLI – because the premiums are through the metaphorical roof!! For real, not joking! I suggest purchasing a policy the earlier the better due to premiums and health changes.
The whole point of life insurance is to ensure that your family is taken care of in the event that something happens to you or your spouse. This is not professional advice, just advice from one military spouse and mom. Speak with a professional about your options that are best for your family.
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About the Author
Kelsey Ramirez is a Real Estate Broker in western Washington. She is also a veteran elementary school teacher, military wife, and mom to two daughters. She is the founder of The Military Move, a military-based website to help families in the PCS process. Kelsey loves to travel, write, and create amazing content. She has her Masters in Technology, which she uses to learn all new things digital.
With three decades of military support, Kelsey’s mission is to help new and existing military families in their unique adventures through all military topics including PCSing, budgeting, school choice and rights, housing, and especially just being a military spouse.