Life insurance for military members
Life insurance is available to military members both on the open market from carriers that write policies for the general public and from military-specific group plans and carriers. USAA is the best known of the military-focused carriers.
How much military life insurance costs depends on various factors, especially if you go with a standard company. However, there are several military life insurance companies that provide services and products specifically for military members of all types.
Military life insurance companies
There are three main military-specific life insurance companies: Servicemembers' Group Life Insurance (SGLI), American Armed Forces Mutual Aid Association (AAFMAA) and USAA. The first offers group life insurance, and the other two sell individual policies.
Servicemembers’ Group Life Insurance (SGLI)
SGLI is a program managed by the Department of Veterans Affairs in partnership with private insurers. While not VA life insurance per se, SGLI policies are specifically designed with military members in mind. Some benefits include 120 days of free transitional life insurance after you’re discharged from service or coverage for up to two years if you’re disabled.
Groups that can get insurance through SGLI include members of the military, national guard, service academies, or commissioned members of certain government agencies.
American Armed Forces Mutual Aid Association (AAFMAA)
The AAFMAA is a non-profit organization that offers life insurance, trust services, and other similar services to military members and their spouses. The company offers services to members both deployed and in training as well as to veterans.
The Veteran Survivor Plan, for example, is a no-exam whole life insurance policy that is available both to veterans and their surviving spouses.
USAA
USAA is one of the biggest insurance companies in the U.S. and offers insurance of all types solely to service members, veterans and their families. The company offers term life, whole life, and universal life, along with auto and home insurance products as well. The company’s rates are also traditionally much lower than those of many competing companies.
Because USAA also writes auto and home insurance, there’s an opportunity to bundle your coverage in one place.
Life insurance for veterans
There are two veteran-specific options for buying life insurance: Veterans Affairs Life Insurance (VALife) and Veterans' Group Life Insurance (VGLI). Veterans can also seek life insurance from USAA.
There are some differences when looking for life insurance for veterans vs. active military members. That’s in part due to the differences in age between active-duty members and those who are retired or have been discharged. Although veterans no longer face the same risks as active duty service members, they are generally older, and with age comes challenges to getting life insurance. Disabilities and conditions related to time in the service can add to the challenge.
Veterans Affairs Life Insurance (VALife)
VALife is offered by the VA and is a guaranteed acceptance whole life insurance policy for veterans with a service-connected disability. This means that to qualify, you must have a condition or injury that occurred or was aggravated during your service time. Coverage is available in $10,000 increments up to $40,000.
Veterans’ Group Life Insurance (VGLI)
VGLI is a renewable term group life insurance policy administered by the VA and underwritten by a private insurer. Veterans pay premiums to maintain coverage, and they can convert their SGLI coverage to a civilian policy after leaving service,
After your service ends, you have up to 16 months to apply for a VGLI policy, and it covers up to the amount of your original SGLI policy and carries it over. Even if you only have part-time SGLI coverage, you could still qualify for a VGLI policy if an injury or disability disqualifies you from a standard life insurance policy. If you apply within 240 days of the end of your service, you are not required to provide evidence of good health.
What kind of life insurance should military members buy?
Military members and veterans should buy life insurance that meets their financial needs and fits their budget. The choice of a policy depends on what you're looking to cover with the death benefit, the age at which you purchase coverage, and the type of coverage you want.
For some, the best options might be the ones listed above. Life insurance policies offered by the VA or military-focused organizations like USAA are designed with the needs of military members and their families in mind.
For most young, healthy people, term life insurance is the most affordable option. However, if you’re a veteran with health issues, you might find a guaranteed issue policy or a policy through the VA to be the best option. Take the time to compare your options before you buy, and consult with an agent who specializes in military life insurance if you need more help choosing the right policy.
