No one likes to think about it, but we all die someday. The question is, are you financially prepared? The average funeral costs between $7,000 and $12,000. Social Security benefits are helpful, but they don’t come close to covering that amount — if you qualify, your survivors get a lump sum of $255 for your final expenses.
Similarly, your military benefits won’t be enough by themselves either:
- Military retired pay and VA disability benefits stop at death
- Survivor Benefit Plan can take up to 90 days to establish
- VA burial benefits total $300 for a non-service-connected death and up to $2,000 for a service-connected death, but only for veterans who qualify
Additionally, bank accounts may be frozen or inaccessible immediately after your passing. This creates a financial liability that will fall to your survivors to face on their own if you don’t have life insurance coverage.
Life insurance. Military personnel have access to one of the best deals in life insurance: Servicemembers’ Group Life Insurance costs just 6.5 cents per $1,000 of coverage per month, or $312 per year for the maximum $400,000, regardless of your age or health. You can also get $100,000 in coverage for your spouse. Members of the military should sign up for this policy before buying any other life insurance. For more information, go to the U.S. Department of Veterans Affairs SGLI site.
But $400,000 may not be enough to cover all of your family’s needs if you die, and the good deal on premiums ends when you leave the military. The life insurance calculator at Kiplinger.com can help you figure out whether you need to buy more insurance. Be aware that members of the military can’t just buy any life-insurance policy. Some policies have specific war exclusions or charge high rates if you plan to travel to a foreign country, making the coverage worthless or very expensive if you’re about to be deployed. SGLI covers all of those special needs for members of the military, and it’s important to make sure any additional insurance you’re considering provides full coverage for service members, too. Be up front about your job with the agent or insurer when you’re shopping for coverage and submitting the application, and check the policy for any war-related exclusions.
Veterans Group Life Insurance (VGLI)
Prior military members can take part in the veterans group life insurance vgli program one year and 120 days after they exit the service.
The coverage available is no more than the amount of SGLI that was in the place upon separation. If veterans or retirees apply within the first 240 days, there are no health requirements. Applying after the 240 mark, they have an extra eight months. But, approval is subject to a health review.
Military retirees sometimes compare life policies against the Survivor Benefit Plan(SBP). Many consider life insurance to be the less expensive route. However, the SBP is not comparable in benefits to life insurance. It is a more comprehensive benefit.
Retiring Service members and their spouses should attend the briefings about the SBP to decide whether to opt-in.
Service members who wish to decline the SBP benefit must get approval from their spouse.
The VGLI is an excellent benefit for prior military members who are otherwise uninsurable or would get a higher priced policy on their own. Otherwise, it is not competitive, and veterans should check around to see what else they can get.
In the military, everybody gets standard issue. In basic, you learn to march in step. On active duty, you wear the same camo, chow down in the same DFAC, rack out in the same barracks, and hear the same jokes from the same buddies.
Your SGLI is like that too: standard issue. SGLI is designed to fit your needs–as long as your needs are just like everybody else’s. The same applies to Veterans Group Life Insurance (VGLI), available when you leave the service. VGLI term life insurance is available with no health underwriting to every veteran who submits the paperwork within 240 days after separation–for the amount of SGLI coverage you had at separation or less. It’s needed, it’s great. But it’s standard issue.
And that’s where USBA comes in. We believe once you’re back to civilian life, you might appreciate a little more choice.
We specialize in life insurance for military veterans and their families, and we don’t stop with standard issue. Our dedicated staff, including retired Service members and family of Service members, will work with you to help you choose your life insurance plan, with benefits that give you and your family peace of mind, at a rate you can afford.
How does USBA compare to Veterans Group Life Insurance? Let’s start with premiums. Within 240 days after separation, VGLI rates are based strictly on your age, so good health gets you nowhere. In other words, with VA life insurance, you only get standard–issue coverage, but you pay the brass hat price. And premiums rise every five years no matter what.
USBA, on the other hand, recognizes the hard work you do to stay healthy. If you don’t smoke, and lead a relatively healthy lifestyle, you could qualify for our preferred–rate premiums.
Even if you don’t qualify for our preferred rates, USBA’s standard rates put the choices on your side. Many veterans choose our 20, 15, or 10 Year Group Level Term plans. These plans are affordable–in many cases, you can help protect your family’s financial future for less than it costs to take them out for pizza once a month.*
These affordable group term life insurance plans offer premiums designed to stay level for 10, 15, or 20 years, depending on your budget and coverage needs. With some age restrictions, you’re guaranteed the option to renew at the end of your first term, regardless of health. As for your coverage amount, that never decreases, as long as premiums are paid and the policy remains in force.
See 20 Year Level Term here.
See 15 Year Level Term here.
See 10 Year Level Term here.
Here’s another USBA favorite you won’t find offered through VA life insurance: Our TWO for ONE Family Group Level Term life insurance plan, designed for military households where both legally married spouses contribute to the family. Standard issue life insurance is written so that benefits are activated only on the death of the “primary breadwinner.” But who is that exactly? In today’s military, both spouses may bring home paychecks or contribute as a stay at home parent. For our hard–working members, USBA created Two for One, a term life plan that provides coverage on the death of whichever legally married spouse dies first–for one low premium!
Types of Military Life Insurance Policies
Policy options fall along the same lines for enrollees regardless of whether they are sponsored by the policyholder or an employer, like the U.S. government. If you want to read up on the major differences in life insurance policies, they are covered in The Simple Dollar’s comprehensive Life Insurance Guide. Otherwise, review our quick recap:
- Term Life is the least expensive form of coverage and is pure insurance – it does not grow cash value and is only in force for a specific period of time.
- Whole Life policies provide coverage that will be uninterrupted for your entire life; a portion of your premium accumulates as cash value.
- Variable Life provides a varying death benefit based on your policy’s cash value. This type of policy does not have a guaranteed death benefit.
- Universal Life is another type of policy that grows cash value, but unlike Whole Life, this type of policy allows for some flexibility with regards to how the excess premium is invested.
- Universal Variable Life is a hybrid life insurance product that combines components of both Universal Life and Variable Life in one policy.