Military Life Insurance (SGLI, VGLI, TSGLI, etc)

Since child support and maintenance payments stop when the obligor dies, family law courts frequently order obligors to carry term life insurance to protect his/her survivors in the event of death.

Some employers offer inexpensive term life policies, and the military is no exception. Under a term policy, a person pays a premium for a specific timeframe, and if the insured dies during the coverage period, the death benefit is paid. If the insured stops paying the premium, coverage lapses, and the policy has no surrender value (unlike a whole life policy, for example).

Servicemembers Group Life Insurance (SGLI)

The military offers SGLI, in $50,000 increments, up to $400,000 of coverage. The premium is fixed, regardless of age or health - just 7 cents per month for each $10,000 of coverage, plus an extra $1 per month for a mandatory Traumatic Injury Protection Coverage. So the maximum $400,000 of coverage is only $29 per month - which compares pretty favorably to private plans.

A member can designate both primary and contingent beneficiaries, as well as multiple primary beneficiaries in whatever percentages he/she chooses.

Family SGLI (FSGLI)

FSGLI provides coverage for servicemember's spouse and dependent children (including step-children living in the household).

Spouse coverage is available in an amount from $10,000 to $100,000 (or up to the SGLI coverage amount, if lower). If no other amount is selected, then the default is $100,000. The premium is based upon the spouse's age bracket, and ranges from 55 cents per $10,000 if the spouse is under 35, up to $5.20 per $10,000 of coverage if the spouse is 60 or older. See FSGLI Premium Rates Table.

Dependent child coverage is a fixed $10,000 per child. The premium is free.

FSGLI coverage begins automatically for the following categories of members, providing they have SGLI coverage in effect:

• Being married when the FSGLI program began on November 1, 2001,
• Entering the service with a spouse and/or children, or
• Marrying or having a child while in the service.

To reduce or decline spouse coverage, the service member must fill out an SGLV 8286A, Spouse Coverage Election & Certificate.

Veterans' Group Life Insurance (VGLI)

VGLI is a post-military insurance program which allows veterans to convert their SGLI into a renewable term life policy. It is available to all members upon separation or retirement, not just retirees. The veteran has one year, plus 120 days, to apply for this coverage. Coverage amounts are from $10,000 up to $400,000, though they cannot exceed the SGLI coverage in effect at separation.

Unlike SGLI, the premiums go up as the veteran gets older, and they also start out more expensive than SGLI (a 40 year-old will pay $68 per month for the same $400,000 coverage which costs a servicemember $29, and a 50 year-old will pay $144 for that coverage). For more details, see the Premium Rates Table.

Servicemembers Group Life Insurance Traumatic Injury Protection Program (TSGLI)

The Servicemembers Group Life Insurance Traumatic Injury Protection Program, mercifully shortened to TSGLI, is a rider to the SGLI policy. The coverage is mandatory for anyone with SGLI coverage, and costs an additional $1 per month ($1 per year for reservists with only part-time coverage).

TSGLI provides a payment for members injured as the result of a traumatic event. There is no requirement that the injury be on-duty; off-duty injuries qualify as well.

The payments range from $25,000 (e.g. losing hearing in one ear) up to $100,000 (e.g. losing hearing in both ears), depending upon the type of injury. See the complete Schedule of Losses.

Unlike life insurance, the only beneficiary is the military member (or guardian, if the servicemember is not competent). However, if the military member lived for at least 7 days from the date of the traumatic event, then his/her survivor receives the benefit.

The IRS has determined that a TSGLI payment is not taxable!

More Information

SGLI Page, from the Department of Veterans Affairs.

Family SGLI Page, from the Department of Veterans Affairs.

VGLI Page, from the Department of Veterans Affairs.

TSGLI Page, from the Department of Veterans Affairs.