Veterans Group Life Insurance

Eric Van Haaften Life Insurance Reviews

If you are a military service member or veteran considering life insurance options, you may have heard about Veterans Group Life Insurance.

VGLI life insurance can be a suitable coverage option, but it’s important to understand its unique advantages and potential drawbacks before deciding.

We’ll also provide open-market pricing on life insurance for veterans that are cheaper than VGLI rates.

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What is Veterans’ Group Life Insurance?
Are VGLI rates expensive?
What are the pros and cons of VGLI life insurance?
Should veterans buy VGLI or traditional coverage?

Veterans Group Life Insurance Explained

Veterans Group Life Insurance is a group term life insurance program the federal government offers to all eligible retired military service members.

Many veterans understand that VGLI life insurance is actually a continuance of their coverage offered by Servicemembers’ Group Life Insurance.

SGLI is unique because it specializes in providing life insurance to active-duty military members.

You are eligible for VGLI life insurance if you had SGLI coverage at separation from service and are within one year and 120 days after discharge.

Veterans who purchase this coverage are covered under a massive Prudential Group policy.

VGLI offers up to $500,000 of term life protection to veterans with no medical underwriting as long as they enroll within 240 days after retiring from active duty in the military.

Those who apply more than 240 days after discharge must submit evidence of good health and have a medical examination, and you may not be approved.

You can use the VGLI login to access Prudential’s easy online application to convert your SGLI to a VGLI group life insurance policy.

The application consists of a series of questions and provides you with the cost of your new policy.

You can also call the VGLI phone number 800-419-1473 to ask questions or check on the status of your pending application.

VGLI Prudential life insurance for veterans is a good option for those that have developed medical conditions or become disabled during their military service.

VGLI Prudential Financial ratings

Considering the financial strength ratings from independent agencies like A.M Best, Fitch Ratings, Standard & Poor’s, and Comdex is essential.

These rating agencies perform extensive analysis to determine each insurer’s financial strength and claims-paying ability.

It’s good to know that VGLI policies are sold through Prudential, which all the major rating companies rate highly.

Rating Agency	Grade
AM Best	A +
Duff & Phelps	AA-
Moody’s	Aa3
S & P Global	AA-
Comdex	95

VGLI Rates

VA life insurance rates are based on the amount of coverage you select and your age when you start your policy.

Younger veterans get the lowest prices, while older veterans must pay substantially more for the same coverage.

Once you enter the VGLI program, your premiums will increase every five years until you’re 80. The price freezes after age 8o if you can afford the cost of coverage.

VGLI insurance policies are available in $10,000 increments up to a maximum of a $500,000 death benefit.

If you are curious about the cost of coverage, the VGLI rate chart below shows monthly rates for $100,000 and $400,000 of coverage.

VGLI Rates Chart

Age	$100K	$400K
30 – 34	$9	$36
35 – 39	$12	$48
40 – 44	$16	$64
45 – 49	$21	$84
50 – 54	$33	$132
55 – 59	$60	$240
60 – 64	$99	$396
65 – 69	$147	$588
70 – 74	$226	$904
75 – 79	$428	$1,712

*VGLI rate chart from the U.S. Department of Veterans Affairs

So, is VGLI worth it?

To help put these VGLI Prudential rates into perspective, it helps to compare them with individual coverage you can purchase in the one market.

First, we recommend evaluating how these VGLI rates increase over time to get an accurate total cost for your policy.

For example, a sixty-year-old looking at a $400,000 VGLI policy will be looking at a monthly starting cost of $396.

These premiums will also increase every five years, rising to $588 at age 65, $904 at age 70, and $1,712 at age 75.

What is better than VGLI?

As you can see, the increasing costs will make maintaining coverage challenging for most veterans when they get into their sixties and seventies.

On the other hand, frugal veterans in decent health can purchase a $400,000 private insurance policy with a level 20-year term for only $165 monthly.

If you are unsure how long you need coverage, you can cause our calculator to compare level-term plans of 10, 15, 20, or 30 years.

VGLI Rates VS Term Insurance

VGLI Pros and Cons

Veterans Group Life Insurance is typically viewed as something most veterans should consider due to its association with being a part of the military.

We’ll take a closer look and summarize some of the key advantages and disadvantages so that you can decide whether a VGLI policy suits your needs.

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Advantages of Veterans Group Life Insurance

Guaranteed Approval: Life insurance for veterans is automatically approved for eligible members.
No Medical Exam: There are no health questions if you enroll within 240 days of military retirement.
Level Death Benefit: Your death benefit will never decrease, and coverage remains in force as long as premiums are paid.
Smokers: Veterans that smoke cigarettes pay the same rates as non-smokers in their age group.
Free Membership: VGLI has no membership fees like many group insurance programs.

As you can see, VGLI’s insurance program is primarily designed to provide easily accessible immediate coverage to those who have left active military service.

While VGLI does offer some advantages, veterans and their families need to understand the possible drawbacks of such a policy.

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Disadvantages Of Veterans Group Life Insurance

Increasing Rates: Your VA life insurance rates will increase every five years and quickly become expensive.
Coverage Limitations: Your initial death benefit is predetermined by the amount of SGLI coverage you previously purchased.
Seniors Pay More: Prudential’s life insurance for veterans has increasing costs that get very expensive as you age.
Non-smokers: Healthy veterans who do not smoke are classified as smokers in the same more expensive rate class.
No Permanent Coverage: VGLI offers only term coverage and does not offer either universal or whole life insurance options for veterans.
Small Death Benefit: VGLI recently increased its maximum death benefit but is limited to only a $500,000 face amount.

Advice on Life Insurance for Veterans

Whether you apply for VGLI coverage within 240 days will determine whether you are automatically approved or must undergo a medical exam.

If you are in decent health, you will have more affordable options for buying individual coverage outside the VGLI program.

Many traditional insurance policies can be purchased without a medical exam, while others may require a physical to qualify for coverage.

Level-term life insurance vs. VGLI

Before buying any policy, it’s beneficial to shop around with multiple insurers to find a premium that fits your budget over the future life of your policy.

VGLI term life insurance rates will increase every five years, while term life on the open market has level rates for up to 40 years.

We find that 30-year and 40-year term life insurance is popular with younger buyers with long-term needs.

While a cheaper 10-year term life policy is perfect for seniors looking for coverage with a specific need in mind.

Term insurance plans from renowned companies like Transamerica, Lincoln Financial, and Banner Life offer level premiums for between 10 and 40 years.

You can also select a death benefit above VGLI’s $500,000 limit with the ability to convert to permanent life insurance in the future.

A conversion option lets term insurance policyholders convert to a universal or whole life insurance policy with no medical questions or health exams.

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Permanent life insurance

If you want lifetime coverage that builds cash value, you are out of luck because Prudential does not offer group rates for permanent coverage.

That’s fine when you are younger when Prudential’s term rates are cheaper than permanent coverage.

However, older veterans will surprisingly spend less on permanent coverage because of Prudential’s increasing term insurance cost.

If you are looking for lifetime coverage, universal life insurance offers a happy medium between term and whole life insurance.

Like whole-life coverage, guaranteed universal life has a premium and death benefit, customized to last to a specific age.

Insurers such as Penn Mutual, American National, and Pacific Life are reliable companies for cash value accumulation and lifetime protection.

Using our calculator, you can compare our term and permanent life insurance rates with VGLI rates without speaking with an agent.

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VGLI and Survivor Benefit Plan

Along with choosing an insurance policy under the VGLI program, veterans also have a separate pension decision to consider upon retirement

Military pensions have a Survivor Benefit Plan that allows your pension income to continue to be paid to your spouse and your children after you pass away.

Your spouse’s maximum inflation-adjusted monthly income will be calculated based on 55 percent of your gross pay under the Survivor Benefit Plan.

However, you must pay a fee for the Survivor Benefit Plan, which is capped at a maximum of 6.5 percent of your retirement income.

If you do not want to pay a fee and want a more pension income, ensure you have a life insurance policy to replace the lost income for your family.

Here’s how Pension Maximization works:

You elect the bigger single-life pension instead of, the smaller payout with a survivor benefit plan, which will increase your income during retirement.

Then, purchase a term or permanent life insurance policy to provide a similar income for your spouse. If you die, the death benefit is paid as a lump sum and is tax-free.

If your spouse dies first, you can either discontinue the insurance policy or name a new beneficiary and continue to pay the premiums.

Veterans must shop for coverage to find the proper type and amount of life insurance based on their needs and budget.

Remember that VGLI Prudential rates are too expensive, and the death benefits are too small for this pension maximization strategy.

However, retiring vets with health problems would be better off sticking with VGLI coverage and selecting the pension survivor benefit plan.