Life insurance for armed service members

By James Tobin, CFP®

Critical Takeaways

  • SDLI is a good deal for active service members 
  • VGLI is less competitive than the private market for healthy applicants 
  • Independent agents offer the broadest range of options

Expert Review Of Life Insurance For Armed Service Members

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Reviewed by

Jim Tobin, CFP®

Why you can trust this review

At Workers Bequest, we value our editorial independence. We keep our reviews strictly factual so you can use them to make informed decisions. Life insurance carriers referred to on this site do not approve reviews. 

When you or a loved one made the commitment to join the armed forces, you knew that the decision would impact every part of your life.

What you may not know is how that impact is felt, as it applies to life insurance for armed services members. 

The purpose of this article is to lay out options beyond Service Members guaranteed Life insurance  (SGLI)  and provide the information necessary to make the best decision possible.

Service Member Group Life Insurance 

Service members Guaranteed Life Insurance is available to active duty personnel, reservist, and the  National Guard.  

Life insurance is offered in units of $50000 to a maximum of $400000.

Coverage is guaranteed and does not require a physical examination

Rates are the same across the board without respect to age or gender.

Rates are affordable and convertible to permanent policies. In fact, SGLI is a really good deal that should be seriously considered by anyone with the opportunity.

If, it turns out, you require more life insurance than the 400000 maximum allowed by SLGI, the commercial market has some options for active duty personal  (more on that in a minute).

Life Insurance When You  Leave The Military

Upon retirement from active duty, if you are insured under SGLI, you will be given the opportunity to convert your policy to Veteran guaranteed Life Insurance (VGLI).

While VGLI carriers the same guaranteed issue  policy as SGLI, it often does not compete as well against the private market as SGLI does. There are several reasons for this, among them:

You can not 'lock-in" a rate for 20 or 30 years the way you can with private insurers.  You will face a rate hike every 5 years.

Additionally, they write to one underwriting class-so if you are in good shape and you don't smoke- you will be subsidizing everyone who is overweight and smoking cigarettes

The flip side of this argument is if you are overweight, or otherwise unhealthy, then VGLI may well make sense. The bottom line is you have to compare to know

Independent Agents Provide More Choice And Better Pricing Options

When you come to the point where you will be making a decision about VGLI or private market life insurance your best option is to work with an independent agent. 

Independent agents have access to 50+ carriers who will all have different standards and this will give you the best opportunity to find the best possible deal for your individual situation.

Think about it, if you deal with what is known as a "captive" agent, who works primarily for one carrier, you will have a very limited menu to choose from.

....And if his "home" carrier is not a great deal , or even competitive, he has a strong financial incentive to not let you in on the bit of information

Life Insurance For Armed Services - Private Market Options

If you need life insurance beyond the 400000 offered by SGLI or you are retiring and would like to shop the private market,  it is important to understand that all private carriers have different appetites for specific risks.

Some private carriers have no interest in offering policies to active personnel or have "acts of war" exclusions. However, other carriers welcome active duty applicants with no such exclusions. Save work

Over the years Prudential, Met Life, and USAA have garnered reputations as pro military carriers. However, the landscape is constantly changing and it is recommended that you speak with an independent agent rather than going it alone. 

Your Next Step

Thank you for visiting the Workers Bequest to research life insurance for service members. Should you have any questions feel free to call or drop an email, we'd love to hear from you. 

Bonus: The most common mistakes people make buying life insurance and how to avoid them

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