Eligibility and Who Can Purchase
Active-duty service members, reservists, National Guard personnel, and eligible retirees can apply for a $400,000 life insurance policy through the Department of Veterans Affairs (SGLI) or private carriers that offer military‑friendly plans. Eligibility hinges on rank, years of service, and health status; most applicants meet basic medical standards, while higher coverage may require additional underwriting.
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Primary Military‑Specific Policies
The two main government‑backed options are:
- Servicemembers' Group Life Insurance (SGLI) – up to $400,000 in coverage, automatic enrollment for active duty, and low premium rates set by law.
- Veterans' Group Life Insurance (VGLI) – a conversion of SGLI after discharge, allowing continued coverage up to $400,000 for a limited time.
Both policies provide basic death benefits to designated beneficiaries, with optional supplemental riders such as family coverage or accidental death and dismemberment (AD&D).
Cost Structure and Premiums
SGLI premiums are fixed by the federal government: $0.06 per $1,000 of coverage per month. For a $400,000 policy, the monthly cost is $24, or $288 annually. VGLI premiums are based on age at conversion and can rise significantly after age 45. Private insurers may offer comparable coverage, but rates vary widely depending on health, rank, and occupation risk.
Benefits Beyond the Death Benefit
Military life insurance often includes:
- Accelerated death benefits for terminal illness.
- Waiver of premiums for service‑related disabilities.
- Tax‑free death proceeds for beneficiaries.
These features make the policies especially valuable for families relying on a single income.
Enrollment Process
Enrollment is straightforward:
For VGLI, the application must be submitted within one year of discharge; otherwise, coverage lapses.
Comparing Government vs. Private Options
| Attribute | Government (SGLI/VGLI) | Private Military‑Friendly |
|---|---|---|
| Maximum Coverage | $400,000 | Often $250,000–$500,000 |
| Premium Cost | Fixed $0.06/1K per month | Variable; can be higher for older applicants |
| Medical Underwriting | Minimal for active duty | Standard medical exam required |
| Riders | Limited (AD&D, family) | Broad range (critical illness, waiver) |
| Portability | VGLI conversion only | Portable across jobs and states |
Key Considerations for Choosing Coverage
When deciding whether $400,000 is appropriate, weigh the family's financial obligations, mortgage size, education costs, and any existing savings. A common rule of thumb is to aim for 10–12 times annual income; for a service member earning $45,000, $400,000 aligns with that guideline. However, if debt is low and other assets are substantial, a lower amount may suffice.
Review the policy's conversion options early. If you anticipate leaving the service, VGLI offers a bridge, but premium growth can be steep. Private plans may be more flexible but require separate health underwriting.