2012 Military Times Insurance Guide: VGLI may serve as life insurance ‘bridge’ - Military Financial Advice - Army Times

2012 Military Times Insurance Guide: VGLI may serve as life insurance ‘bridge’

When you leave the military, your Servicemembers’ Group Life Insurance coverage remains in effect for 120 days.

During that time, you can apply for a Veterans Affairs Department program called Veterans’ Group Life Insurance program without having to get a medical exam. Once those 120 days are up, you have up to another year to enroll in VGLI, but you must have a medical exam.

VGLI is a good option for troops who may not be able to get life insurance elsewhere because of a physical condition caused by military service, for example.

“We encourage people leaving the service to take VGLI if they have medical issues,” said Lisa Milman, vice president of marketing and sales for Army and Air Force Mutual Aid Association.

But VGLI can be costly. The premiums start at $32 a month for $400,000 of life insurance for veterans up to age 29 but increase at age 30 and every five years thereafter, up to $1,800 a month for those 75 and older.

VGLI can be bought in increments of $10,000. For example, a 65-year-old pays $150 a month for $100,000 of VGLI.

VGLI is often used as a kind of life insurance “bridge” by people leaving the military until they get settled in their civilian lives.

June Walbert, a financial planner for USAA, said it’s a good idea to start checking into commercial life insurance policies about six months before you leave the service or retire.

“The six-month time frame is prudent, because if something goes awry, you can still apply for VGLI in the window,” she said. It won’t hurt to apply for VGLI if you haven’t had time to set up another life insurance policy. You can always cancel it later.

“You don’t want to remove VGLI from the table if you’re not sure it’s not the best or the only option you have,” Walbert said.