Servicemembers’ Group Life Insurance (SGLI) is the military’s life insurance option for active duty members, and it’s one of the most affordable options on the market.
Unlike commercial life insurance, all service members pay the same premiums based solely on their chosen amount of coverage. Currently, $400,000 in SGLI coverage (the maximum amount of coverage offered) costs $24 per month plus an additional $1 for traumatic injury protection.
Traumatic Injury Protection (TSGLI) provides financial assistance to service members if they are injured while serving. TSGLI provides up to $100,000 in financial support for service workers during their recovery.
TSGLI also covers all service members who have SGLI; premiums for both are automatically deducted from a service employee’s pay.
SGLI also has a family component called family SGLI (FSGLI). FSGLI provides coverage to spouses and dependent children of military personnel under a different cost structure than SGLI.
Dependent kids get up to $10,000 in coverage for free. Spouses are eligible for up to $100,000 in life insurance coverage for premiums that change based on age.
For $100,000 in coverage, a spouse can expect to pay between $4.50 and $45 per month. Most active-duty spouses receive coverage for less than $10 a month.
SGLI and FSGLI coverage lasts until a service member changes his election amounts, declines coverage, or leaves military service.
What happens to the SGLI coverage in the event of a divorce?
SGLI and FSGLI coverage lasts for 120 days after a service member retires or separates from the military. However, a service member will lose their TSGLI coverage immediately upon leaving the service.
Here are some options for maintaining life insurance coverage outside of the military.
Applying for an SGLI Extension for the Disabled
You can apply for an SGLI extension of disability if you meet certain conditions:
Total disability experienced at the time of separation that prevents you from working Lost hearing in both ears Lost ability to speak Unable to use both hands, feet, eyes or a combination of these disabilities
The extension gives you coverage for up to two years after the divorce, if approved. After the renewal, you can convert your SGLI to Veterans’ Group Life Insurance (VGLI). You can keep VGLI as long as you continue to pay the premium.
Convert your SGLI to VGLI
VGLI can be a good option for veterans with health problems who may be preventing them from getting affordable commercial life insurance.
You are eligible to convert your SGLI to VGLI, provided you apply within one year and 120 days of the divorce. If you file within 240 days of divorce, you do not need to undergo a medical examination to receive coverage.
The maximum amount of your initial VGLI coverage cannot exceed your SGLI coverage at the time of your breakup. However, you can increase your VGLI coverage by $25,000 every five years until you turn 60. The maximum VGLI policy is $400,000.
You can apply for VGLI online through the Office of Servicemembers’ Group Life Insurance or by post or fax.
VGLI costs more than SGLI. Your age and the amount of coverage determine your VGLI premium, so the premiums increase every five years. For example, you would pay $84 for $400,000 in coverage at age 45, but 10 years later, at age 55, you would pay $240 per month to maintain the same amount of coverage. As long as you pay your premium on time, VGLI will not expire.
Convert your SGLI into a commercial policy
You can convert your SGLI coverage to an individual commercial policy within 120 days of the divorce without undergoing a medical examination to obtain coverage. However, few insurers offer direct conversion from SGLI to individual policies, and costs vary.
This option is also available to military spouses who were covered by FSGLI, as opposed to VGLI and SGLI disability extensions.
Take out cover with another insurer
You do not need to continue your term life insurance through any of the above options or to keep the coverage. If you are embarking on a second career, your new employer may offer you life insurance while you work with them. Or you can shop around for a different policy.
Navy Mutual offers a permanent alternative to life insurance to recently divorced members and their families who were covered by SGLI or FSGLI during their service. You don’t have to undergo a medical exam or insurer assessment if you apply within 120 days of divorce.
Navy Mutual representatives can help you determine which of their products will provide the best protection for your family. Schedule a consultation or request a quote online to discuss Navy Mutual’s available term and permanent life insurance options.
This post What happens to SGLI after leaving the military?
was original published at “https://themilitarywallet.com/navy-mutual-sgli/”
