Exploring the Best Life Insurance Options for Veterans

As you transition from active duty back to civilian life, you face a whirlwind of decisions and responsibilities. Amid the excitement of new opportunities and the challenges of forging a new path, it’s easy for an important task to slip through the cracks: securing life insurance to protect your loved ones.

For years, you’ve had the safety net of Servicemembers’ Group Life Insurance (SGLI). But that coverage expires 120 days after you leave the military. Suddenly, you’re faced with the sobering question: If something happens to me, how will my family cope financially? 

Choosing the right life insurance as a veteran is a critical step in safeguarding your family’s future. But with so many options and factors to consider, it can feel overwhelming.

How Life Insurance for Veterans Works

Life insurance for veterans ensures financial protection for their loved ones by providing a payout upon their passing. The Veterans’ Group Life Insurance (VGLI) program allows former service members to convert their SGLI into a renewable term policy.

Your SGLI coverage through the military only lasts for 120 days after you separate from service. That means you have a limited window to secure new life insurance before you’re left without coverage. For many veterans, this transition period is already filled with competing priorities, from finding a new job to relocating their family. It’s easy for life insurance to get lost in the shuffle, but the consequences of that oversight could be devastating.

Another key factor is the financial reality of post-military life. Many veterans, especially those who served for decades and are still in their prime working years, have families who rely on their income. Spouses, young children, aging parents – these loved ones could face significant hardship if a veteran were to pass away unexpectedly without life insurance. The loss of income, combined with final expenses and potential debts, can put survivors in a difficult financial position.

Schedule Appointment »

Veterans must also contend with the potential impact of service-connected disabilities on their life insurance options. Conditions like PTSD, traumatic brain injuries, or chronic illnesses can make it more difficult and expensive to qualify for coverage on the private market. Some insurers may deny coverage altogether or charge significantly higher premiums due to these health factors. This harsh reality makes it all the more important for veterans to explore policies designed with their unique needs in mind.

Ultimately, securing life insurance should be considered an essential part of a veteran’s transition plan. Just as you wouldn’t leave the military without lining up housing and employment, you shouldn’t leave your family’s financial future to chance. A well-chosen life insurance policy is a way to continue the mission of serving and protecting the ones you hold dear.

Policy Checklist Make Sure You Get a Good Policy Is your policy good or bad? Use this checklist to help evaluate your existing life insurance or a new policy you are considering. Get It Here>

Best VA Life Insurance Options for Veterans

As a veteran, you have access to several life insurance programs through the Department of Veterans Affairs (VA). These policies are designed with your unique needs in mind and can provide a foundation of coverage as you transition to civilian life. Let’s take a closer look at the key options:

Veterans’ Group Life Insurance (VGLI)

VGLI is the primary life insurance program offered to veterans, allowing you to convert your SGLI coverage to a civilian policy. Here’s what you need to know:

• Eligibility: You can apply for VGLI within 1 year and 120 days of separating from the military. If you apply within the first 240 days, you won’t need to provide proof of good health.
• Coverage Amounts: VGLI offers coverage up to $500,000, in increments of $10,000. You can choose the amount that best fits your needs and budget.

• Premiums: One key drawback of VGLI is that premiums increase with age. The younger you are when you enroll, the lower your initial rates will be, but they will rise over time. 
• Renewability: VGLI policies are renewable for life, as long as you pay your premiums. This ensures you can maintain coverage even as you age or if your health changes.

Veterans Affairs Life Insurance (VALife)

VALife is a program that replaces the Service-Disabled Veterans Insurance (S-DVI). It’s designed specifically for veterans with service-connected disabilities. Key features include:

• Eligibility: You must have a service-connected disability rating (0-100%) and be under 80 years old to qualify for VALife. No medical underwriting is required. 
• Coverage Amounts: VALife offers up to $40,000 in whole life coverage, which builds cash value over time. You can choose coverage in increments of $10,000.
• Premiums: Your premiums will be based on your age when you enroll and will remain level throughout the life of the policy. 
• Waiting Period: There is a 2-year waiting period for full coverage under VALife. If you pass away during this period, your beneficiaries will receive the premiums you’ve paid plus interest.

Veterans’ Mortgage Life Insurance (VMLI)

VMLI is a unique program that provides mortgage protection for severely disabled veterans who have received a Specially Adapted Housing (SAH) grant to modify their home. Here are the essentials:

• Eligibility: You must have a severe service-connected disability, have received an SAH grant, and be under 70 years old to qualify for VMLI.
• Coverage Amounts: VMLI provides up to $200,000 in mortgage life insurance, which is paid directly to your mortgage lender in the event of your death. 
• Premiums: Your premiums will be based on your age, the amount of your mortgage, and the length of your mortgage term.
• Decreasing Coverage: As you pay down your mortgage balance, your VMLI coverage will decrease accordingly. Once your mortgage is paid off, the coverage ends.

These VA life insurance programs can provide valuable protection for veterans, particularly those with service-connected disabilities or unique housing needs. However, they may not offer sufficient coverage for all veterans’ financial situations.

Pros and Cons of VA Life Insurance

VA life insurance programs offer some distinct advantages for veterans, particularly those with service-connected disabilities. However, these policies also come with certain limitations that are important to consider when deciding on your coverage needs.

Pros:

• Guaranteed Acceptance: If you apply for VGLI within 240 days of separating from the military, you’re guaranteed coverage without having to provide proof of good health. This can be a significant advantage if you have pre-existing conditions that might make it difficult to qualify for private life insurance.
• Disability Coverage: VALife and VMLI provide unique coverage options for veterans with service-connected disabilities. These programs offer protection that may be hard to find from private insurers, especially at affordable rates. 
• No Medical Underwriting: Both VGLI and VALife do not require medical underwriting, which means you won’t need to undergo a physical exam or answer health questions to qualify for coverage. This can be a relief for veterans with complex health histories.

Cons:

• Lower Coverage Amounts: The maximum coverage available through VA life insurance programs may not be sufficient for all veterans’ needs. VGLI caps out at $500,000, while VALife only offers up to $40,000. For veterans with significant financial obligations, such as a mortgage, dependent children, or business loans, these amounts may fall short of providing adequate protection.
• Higher Premiums: VGLI premiums, in particular, can become quite expensive as veterans age. The premiums are based on your age group and increase every 5 years, which can make the coverage less affordable over time. Veterans on fixed incomes may struggle to keep up with the rising costs.
• Lack of Flexibility: VA life insurance policies don’t offer the same level of customization as many private insurance options. You may not be able to add riders like accelerated death benefits, which allow you to access a portion of your death benefit if diagnosed with a terminal illness, or long-term care riders that can help cover the costs of assisted living or in-home care.
• No Option to Convert VGLI: While you can convert a VGLI policy to a commercial life insurance policy at any time, there is no option to convert it to a permanent policy like whole life insurance offered by the VA. This means you may need to shop around for private coverage if you want a policy that builds cash value or offers lifelong protection.

Weighing these pros and cons can help you determine whether VA life insurance provides sufficient coverage for your needs or if you should explore additional options. For some veterans, the guaranteed acceptance and disability coverage may outweigh the limitations. For others, the lower coverage amounts and lack of flexibility may be a sign that it’s worth looking into private life insurance alternatives.

Ultimately, the right life insurance solution will depend on your unique financial situation, health status, and long-term goals.

Private Life Insurance Alternatives for Veterans

While VA life insurance programs can provide a solid foundation of coverage, they may not fully meet every veteran’s needs. Fortunately, there are many private life insurance options available that can offer more flexibility, higher coverage amounts, and additional features. 

Term Life Insurance

Term life insurance provides coverage for a specific period, typically 10, 20, or 30 years. If you pass away during the term, your beneficiaries receive the death benefit. If you outlive the term, the policy expires and you’ll need to purchase a new one if you still need coverage. Here are some key advantages of term life:

• Affordability: Term policies often have lower premiums than permanent life insurance, making them a budget-friendly option for younger veterans.
• Higher Coverage Amounts: You can typically purchase term life insurance in amounts up to $1 million or more, providing ample protection for your family’s needs.
• Flexibility: You can choose a term length that aligns with your specific obligations, such as a 30-year term to cover your mortgage or a 20-year term to protect your children until they reach adulthood.

Whole Life Insurance

Whole life insurance provides lifelong coverage and includes a cash value component that grows over time. As long as you pay your premiums, your policy will remain in force and your beneficiaries will receive the death benefit when you pass away. Some key benefits of whole life include:

• Permanent Protection: Unlike term policies, whole life insurance doesn’t expire. This can provide peace of mind knowing that your loved ones will be protected no matter when you pass away.
• Forced Savings: A portion of your premiums go into a cash value account that grows over time. You can borrow against this cash value or use it to pay premiums later in life.
• Potential Dividends: Some whole life policies pay dividends, which you can use to increase your cash value, pay premiums, or receive as cash.

It’s important to note that whole life insurance typically has higher premiums than term life, especially in the early years of the policy. However, for veterans who want lifelong protection and a forced savings vehicle, whole life can be a valuable tool.

Working with Veteran-Friendly Insurers

When shopping for private life insurance, veterans may want to consider working with insurers that cater to military families. Companies like Navy Mutual and the Armed Forces Benefit Association have a long history of serving veterans and offer policies tailored to their unique needs.

These veteran-friendly insurers may offer more lenient underwriting for service-connected health conditions, as well as special discounts or rates for veterans. They also tend to have a deep understanding of the challenges and opportunities that veterans face, which can make the process of securing coverage feel more personalized and supportive.

Ultimately, the best life insurance solution for a veteran will depend on their individual needs, budget, and long-term financial goals. It’s essential to carefully assess your specific situation, compare policies and quotes from both VA and private insurers, and choose the option that provides the most comprehensive protection for your loved ones.

What Veterans Should Remember

Choosing the right life insurance coverage can feel overwhelming, but it’s a crucial step in safeguarding your family’s financial well-being. As a veteran, you have access to unique options through the VA as well as a wide range of private insurance alternatives. Here are some key action items to help you make an informed decision:

• Assess Your Needs: Start by evaluating your current financial obligations and future goals. Consider factors like your mortgage, outstanding debts, dependent children, and spouse’s income. This will help you determine how much coverage you need to ensure your loved ones are protected.
• Compare VA and Private Options: Carefully review the VA life insurance programs you’re eligible for, noting their coverage amounts, premiums, and any limitations. Then, get quotes from reputable private insurers for term and whole life policies that align with your needs. Compare the costs and benefits of each option to identify the best value for your situation.
• Work with a Knowledgeable Agent: Partnering with a life insurance agent who understands the unique needs of veterans can make the process much smoother. Look for an agent who can help you navigate both VA and private options, answer your questions, and provide personalized recommendations based on your goals.
• Don’t Delay: It’s easy to put off purchasing life insurance, but the earlier you secure coverage, the better. Life insurance premiums generally increase with age and the onset of health conditions, so acting sooner rather than later can help you lock in more affordable rates. Plus, you’ll have the peace of mind knowing that your loved ones are protected.
• Review and Update Regularly: As your life circumstances change, so should your life insurance coverage. Make a point to review your policy annually and whenever you experience a major life event, such as getting married, having a child, or buying a home. Your agent can help you update your coverage as needed to ensure it always aligns with your needs.

Peace of Mind for Those Who Serve

As a veteran, you understand the importance of service, sacrifice, and protecting those you hold dear. Choosing the right life insurance coverage is an extension of that commitment, ensuring that your loved ones are financially secure no matter what the future holds.

At McFie Insurance, we’re dedicated to helping veterans like you navigate the complexities of life insurance and find the best possible coverage for your unique needs. Our team of experienced agents understands the challenges and opportunities that veterans face, and we’re here to provide personalized guidance and support every step of the way.

Don’t leave your family’s future to chance. Take action today to secure the life insurance protection they deserve. Contact McFie Insurance to schedule a complimentary consultation and explore your options. With our help, you can achieve the peace of mind that comes from knowing your loved ones will always be cared for, no matter what tomorrow brings.

McFie Family Insurance Offers Life Insurance for Veterans

Life insurance can provide veterans with essential financial protection for their loved ones. If the coverage offered through the Veterans Association doesn’t meet your needs, there are alternative options. McFie offers both whole life and term life insurance plans that may be available to veterans, providing flexible and transparent coverage. Explore our plans to find a policy that aligns with your financial goals and personal history.

Tomas P. McFie DC PhD

Most Americans depend on Social Security for retirement income. Even when people think they’re saving money, taxes, fees, investment losses and market volatility take most of their money away. Tom McFie is the founder of McFie Insurance which helps people keep more of the money they make, so they can have financial peace of mind. His latest book, A Biblical Guide to Personal Finance, can be purchased here.