Servicemembers’ Group Life Insurance (SGLI) is a critical life insurance program designed to provide financial protection for military personnel and their families. In this comprehensive guide, we cover everything you need to know about SGLI, including eligibility, coverage, benefits, and processes.
What is SGLI?
SGLI, or Servicemembers’ Group Life Insurance, is a low-cost term life insurance program offered to eligible military personnel. It provides financial security for servicemembers and their families in case of an unfortunate event. The program is administered by the Department of Veterans Affairs (VA) and is underwritten by the Prudential Insurance Company of America. As a servicemember you’re automatically enrolled into SGLI through your service branch. The premium is directly taken out of your base pay unless you actively discontinue coverage.
To qualify for SGLI, you must be one of the following:
- Active duty member of the Army, Navy, Air Force, Marines, Coast Guard or Space Force
- Member of the Commissioned Corps of the National Oceanic and Atmospheric Administration (NOAA) or the United States Public Health Service (USPHS)
- Cadet or midshipman of the United States military academies
- Member of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises
- Member of the Ready Reserve or National Guard, scheduled to perform at least 12 periods of inactive training per year
SGLI Coverage and Benefits
SGLI offers coverage in increments of $50,000, up to a maximum of $500,000. You might have heard it was $400,000 – which it used to be, up until March 1, 2023, before it was updated to reflect the current economic status and inflation hitting an all time high. Servicemembers can choose their desired coverage amount and can also update it during their service. Premiums for SGLI are based on the coverage amount – everyone is paying the same premium.
In addition to the basic SGLI coverage, the program also offers Traumatic Injury Protection (TSGLI). This additional coverage provides financial assistance to servicemembers who suffer a qualifying traumatic injury while covered under SGLI. The TSGLI benefit ranges from $25,000 to $100,000, depending on the severity of the injury.
SGLI premiums are based on the coverage amount. Everyone is paying the same. Age, gender, service branch, deployment or other risk factors such as smoking or general health do not play a role in this. As of March 2023, the basic premium rate per $1,000 of coverage is $0.06 – here’s an overview of SGLI premiums and SGLI coverage:
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These rates are subject to change, so it’s essential to stay updated on the latest premium information. In addition to the basic premium, there’s a $1.00 monthly charge for TSGLI coverage.
SGLI Application and Enrollment
Active duty servicemembers are automatically enrolled into SGLI, with the maximum coverage of $500,000. If you wish to change your coverage amount or designate beneficiaries, you can do so by completing the SGLV 8286 form, also known as the Servicemembers’ Group Life Insurance Election and Certificate.
To update your SGLI coverage or beneficiary information, you can submit the SGLV 8286 form through your branch’s personnel office or electronically using the SGLI Online Enrollment System (SOES). It’s essential to keep your beneficiary information current to ensure your loved ones receive the benefits in case of your passing.
SGLI Conversion to VGLI
When you leave the military, your SGLI coverage will end. However, you have the option to convert your SGLI to Veterans’ Group Life Insurance (VGLI) within 1 year and 120 days from your date of separation. VGLI is a renewable term life insurance policy that provides similar coverage to SGLI but without the requirement of military service. However, VGLI premiums depend on your age and will increase every 5 years until they cap out at age 80. In this article we outline why we generally do not recommend VGLI.
To apply for VGLI, you need to complete the SGLV 8714 form, also known as the Application for Veterans’ Group Life Insurance. If you apply within 240 days from your separation date, you won’t need to provide evidence of good health. However, if you apply after 240 days, you’ll need to answer health questions to determine your eligibility.
SGLI for Family Members
In addition to the coverage for servicemembers, SGLI also offers Family Servicemembers’ Group Life Insurance (FSGLI). FSGLI provides life insurance coverage for the spouse and dependent children of eligible servicemembers. Spousal coverage ranges from $10,000 to $100,000, in increments of $10,000, while dependent children are automatically covered for $10,000 at no additional cost.
To apply for FSGLI, eligible servicemembers must complete the SGLV 8286A form, also known as the Family Servicemembers’ Group Life Insurance Election and Certificate. It’s important to note that FSGLI coverage for spouses cannot exceed the servicemember’s SGLI coverage amount.
Conclusion on SGLI
SGLI is a vital life insurance program that offers financial protection and peace of mind to military personnel and their families. Understanding the eligibility, coverage, premiums, and application process can help you make informed decisions about your life insurance needs. Regularly updating your SGLI coverage and beneficiary information ensures that your loved ones are taken care of in case of an unfortunate event.
However, unless you plan on staying within the forces for life, we would strongly recommend utilizing your young age and health to access a better long term solution and go with a 30 year term life insurance. The premiums are similar as you can easily find $500,000 worth of term life coverage for around $30 when you’re 30. Use your youth and health to lock this rate in for 30 years and have coverage reach up to your retirement to protect your working income.