SGLI Insurance: A Comprehensive Guide

Servicemembers’ Group Life Insurance (SGLI) is a life insurance program for members of the United States military. It was created to provide affordable life insurance to service members and their families. This program is managed by the Department of Veterans Affairs (VA) and is available to active-duty members, National Guard and Reserve members, members of the Commissioned Corps of the National Oceanic and Atmospheric Administration (NOAA), and the Public Health Service (PHS).

History of SGLI

SGLI was established in 1965 as a replacement for the World War II-era National Service Life Insurance (NSLI) program. The original coverage amount was $10,000, and the program was intended to provide affordable life insurance to service members. Over the years, the coverage amount has increased, and the program now offers up to $400,000 in coverage.

The program has undergone several changes since its inception. In 2005, the Servicemembers’ Group Life Insurance Enhancement Act was passed, which increased the maximum coverage from $250,000 to $400,000. It also allowed for members to designate their beneficiaries electronically and extended coverage to members serving in the National Guard and Reserve.

Who is Eligible for SGLI?

All active-duty members of the Army, Navy, Air Force, Marines, and Coast Guard are automatically enrolled in SGLI at the maximum coverage amount of $400,000. National Guard and Reserve members, NOAA and PHS members, and members of the Ready Reserve can also enroll in SGLI.

Members must enroll in SGLI within 120 days of their enlistment, or they may be subject to a physical examination. After the initial 120-day period, members can still enroll but may be required to take a physical exam and provide evidence of insurability.

How Much Does SGLI Cost?

The cost of SGLI is based on the amount of coverage selected and the member’s age. The premium is deducted from the member’s pay and is currently $.08 per $1,000 of coverage. This means that a member with the maximum coverage of $400,000 would pay $32 per month for coverage.

It’s important to note that the cost of SGLI is significantly lower than other life insurance options available to service members. For example, a healthy 30-year-old male would pay more than $60 per month for a $400,000 policy with a private insurer.

How Does SGLI Work?

SGLI is a term life insurance policy, which means it provides coverage for a specified period of time (usually until the member separates from service). If the member dies while covered by SGLI, the designated beneficiaries will receive the death benefit tax-free.

Beneficiaries can be designated or changed at any time, and members are encouraged to review their beneficiaries periodically to ensure that they are up to date.

What Are the Benefits of SGLI?

SGLI provides several benefits to service members and their families:

1. It provides affordable life insurance coverage to service members and their families.
2. The premiums are deducted automatically from the member’s pay, making it easy to manage.
3. Beneficiaries receive the death benefit tax-free.
4. The coverage amount can be changed at any time to meet the changing needs of the member and their family.

How Can I Make Changes to My SGLI Coverage?

Members can make changes to their SGLI coverage at any time by completing a SGLV 8286 form. This form can be obtained from their personnel office or downloaded from the VA website. Changes can include increasing or decreasing coverage, designating or changing beneficiaries, or cancelling coverage altogether.

It’s important to note that members who cancel their SGLI coverage during their military service may have a more difficult time obtaining life insurance coverage in the civilian world. It’s recommended that members carefully consider their options before cancelling their SGLI coverage.

SGLI FAQ

What happens if I become disabled before I separate from service?

If a member becomes totally disabled before they separate from service, they may be eligible for a waiver of premiums. This means that the member will not have to pay the premiums for their SGLI coverage for as long as they remain totally disabled.

Can I still enroll in SGLI if I have a pre-existing medical condition?

Members with pre-existing medical conditions may still be eligible for SGLI coverage, but they may be required to provide evidence of insurability. This may include a physical exam or documentation from a medical professional.

Can I designate multiple beneficiaries for my SGLI coverage?

Yes, members can designate multiple beneficiaries for their SGLI coverage. The death benefit will be split equally among the designated beneficiaries.

What happens if I die while serving in a combat zone?

If a member dies while serving in a combat zone, their death benefit will be paid to their designated beneficiaries tax-free. It’s important to ensure that beneficiaries are designated and up to date to ensure a smooth payout process.

Can I change my SGLI coverage after I separate from service?

After a member separates from service, they are no longer eligible for SGLI coverage. However, they may be eligible for Veterans’ Group Life Insurance (VGLI), which is a similar program offered by the VA. Members who switch from SGLI to VGLI within 120 days of separation may not be required to provide evidence of insurability.

Conclusion

Servicemembers’ Group Life Insurance is an important benefit that provides affordable life insurance coverage to service members and their families. It’s automatic enrollment and low premiums make it an easy way to protect against the unexpected. Members are encouraged to review their coverage periodically and make changes as needed to ensure that their beneficiaries are up to date and that they have the appropriate amount of coverage.