Troops, veterans to see drop in life insurance costs
For currently serving military members, the monthly premiums for Service Members' Group Life Insurance, or SGLI, coverage will decrease from 6 cents to 5 cents per $1,000.
In addition to a monthly premium, service members also pay $1 per month for SGLI Traumatic Injury Protection coverage.
For example, with the drop in premiums, a service member with the maximum SGLI coverage of $500,000 will now pay $26 per month — including the $1 for Traumatic SGLI — down from the current $31.
All service members pay the same rate, regardless of age, with coverage available in increments of $50,000.
The reductions are the result of the 'sound financial standing' of the insurance programs, according to the Department of Veteran Affairs, which administers the programs.
The reductions will be automatic, meaning troops and veterans don't need to take any action.
For spouses covered by Family SGLI, premiums will decrease by an average of 13%, ranging between 11% and 22%, according to the VA. Rates vary by the spouse's age. For example, premiums for a spouse under the age of 35 will drop from $4.50 to $4 per month for the maximum $100,000 of coverage.
Premiums for spouses between the ages of 40 and 44 will drop from $7 to $6.20 per month.
If the spouse is in the Defense Enrollment Eligibility Reporting System, or DEERS, the premium is automatically deducted from the service member's pay. If the spouse isn't in DEERS, the service member is still responsible for paying the premiums.
Coverage for spouses is available in increments starting at $10,000.
what troops need to know about life insurance in 2024
For veterans covered by Veterans Group Life Insurance, or VGLI, the decreases will average about 11%, with reductions ranging from 2% to 17%. VGLI premiums vary by age.
However, unlike service members' rates, VGLI rates increase every five years as the veteran ages, starting at age 30. For veterans age 29 and younger, the monthly cost for $500,000 of coverage will be $30, a decrease of $5 from the current premium. For $100,000 of coverage, the cost will be $6 per month, down by $1.
For veterans age 40 to 44, the monthly premium for $500,000 of coverage will drop by $10 to $70. Meanwhile, for those 80 and older, the monthly premium for $500,000 will decrease from $2,250 to $2,200.
SGLI coverage doesn't automatically carry over after leaving the military. Everyone leaving the military with SGLI coverage qualifies to sign up for VGLI, with certain time limits. However, VGLI is more expensive than SGLI, so experts advise shopping around for other life insurance options. An advantage of VGLI is that those who sign up within 240 days of leaving the military don't need to prove they're in good health.
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