- Life insurance needs change at every stage of military life — SGLI covers you during service, VGLI or private term covers the transition years, and final expense insurance addresses end-of-life costs for older veterans
- SGLI provides up to $500,000 of coverage at $30 per month — the same flat rate for all servicemembers regardless of age or health, making it the most cost-effective life insurance most servicemembers will ever have access to
- The 120-day window after separation is the most critical life insurance decision point for veterans — failing to act locks out no-health-statement conversion options that may never be available again
- VGLI premiums increase at every 5-year age interval and become significantly more expensive than private term for healthy veterans in their 30s and 40s — comparing both before committing is worth the effort
- The VA burial allowance covers $948 to $2,000 of end-of-life costs — far less than the average funeral — leaving a gap that final expense insurance is designed to fill
- Veterans with service-connected disabilities may qualify for S-DVI (RH Insurance) — up to $10,000 of VA life insurance with a premium waiver for totally disabled veterans
Life insurance is one of the most important financial decisions a servicemember or veteran makes — and one of the easiest to get wrong by default. SGLI enrollment is automatic, so most servicemembers never actively choose their coverage. VGLI conversion is available without a health exam, so many veterans take it without comparing alternatives. And final expense insurance is so heavily marketed to older veterans that the products that actually make sense get buried under the ones that are most profitable to sell.
This guide maps the complete life insurance landscape for veterans — from the first day of service through retirement — so you can make intentional decisions at each stage rather than defaulting into whatever is easiest.
Life Insurance at Every Stage of Military Life
Life insurance needs and options change significantly across a military career and into veteran status. The right coverage at 22 years old on active duty is not the right coverage at 45 after two decades of service, and neither of those is the right coverage at 72. Understanding which options are available and appropriate at each stage prevents two common and costly mistakes: carrying inadequate coverage and paying too much for the coverage you have.
| Stage | Primary Option | Key Consideration |
|---|---|---|
| Active duty | SGLI — up to $500,000 | Automatic enrollment; flat rate regardless of age or health; add FSGLI for spouse and children |
| Separation (0–120 days) | SGLI still active; decide on VGLI or private | Most critical decision window — no health statement required for VGLI conversion |
| Separation (120–240 days) | VGLI conversion — no health statement still available | SGLI has ended; VGLI still available without exam until day 240 |
| Post-separation, young and healthy | Private term life insurance | Private term typically cheaper than VGLI; locks in low rates while health is good |
| Post-separation, health conditions | VGLI conversion | No-health-statement conversion is most valuable for veterans who cannot qualify for preferred private rates |
| Older veteran, income replacement need | VGLI or private term still in force | VGLI premiums accelerate significantly after 60 — compare with private permanent options |
| Older veteran, end-of-life planning | Final expense insurance | Sized to cover funeral costs rather than income replacement; accessible without a medical exam |
SGLI — Coverage During Service
Servicemembers’ Group Life Insurance is the foundation of life insurance for anyone on active duty or qualifying Reserve and Guard status. Coverage of up to $500,000 is automatically provided at a flat rate of $0.06 per $1,000 per month — $30 per month for the maximum coverage. Every servicemember pays the same rate regardless of age, health, branch, or duty assignment.
Key features of SGLI every servicemember should know:
- TSGLI is included — every SGLI policy includes Traumatic Injury Protection at $1 per month, which pays $25,000 to $100,000 for qualifying traumatic injuries even if the servicemember survives
- FSGLI covers the family — spouse coverage up to $100,000 and automatic free $10,000 coverage per dependent child are available through Family SGLI
- Beneficiary designation controls payment — not a will. A designation that has not been updated since enlistment may name an ex-spouse, a deceased parent, or no one at all
- Coverage continues 120 days after separation at no cost — giving servicemembers time to arrange replacement coverage before SGLI ends
For the complete breakdown of SGLI coverage, TSGLI qualifying injuries, FSGLI rates, and beneficiary rules, see the SGLI Complete Guide.
VGLI — Coverage After Separation
Veterans’ Group Life Insurance is the continuation program for SGLI. Veterans who had SGLI can convert to VGLI without a health statement within 240 days of separation — no medical exam, no health questions, guaranteed acceptance regardless of any conditions developed during service. Coverage is available up to $500,000 in $10,000 increments.
The no-health-statement conversion right is the single most valuable feature of VGLI — and the one most worth protecting. Veterans who develop serious health conditions during service and convert to VGLI lock in coverage that would otherwise be unavailable or prohibitively expensive through private insurers. For veterans in excellent health, VGLI is one option among several — but it may not be the most cost-effective one.
VGLI premiums are age-based and increase at every 5-year interval. A veteran who converts at 30 and holds VGLI until 70 will see premiums increase from roughly $8/month per $100,000 of coverage to over $600/month per $100,000 — a 75-fold increase over the life of the policy. Veterans who compare VGLI rates against private term insurance at the time of separation often find private term significantly cheaper for the same face amount, with the trade-off that private term requires qualifying health status.
For a complete rate comparison and decision framework, see the VGLI vs. Private Life Insurance Complete Guide.
Private Term Life Insurance
Private term life insurance purchased through a commercial insurer is often the most cost-effective option for healthy veterans in their 20s, 30s, and early 40s. A healthy 30-year-old veteran can typically purchase a 20-year $500,000 term policy for $25 to $40 per month — competitive with or cheaper than VGLI for the same coverage, with the added benefit of a locked-in level premium for the full term.
The advantages of private term over VGLI for qualifying veterans:
- Level premiums — a 20-year term policy purchased at 30 has the same premium at 49 as it did at purchase; VGLI premiums increase every 5 years
- Lower cost for healthy veterans — private underwriting rewards good health with preferred rates that VGLI’s age-only pricing cannot match
- Coverage independent of VA programs — private term does not depend on VA administration, program changes, or continued eligibility
The primary disadvantage of private term: it requires proving good health at application. Veterans with service-connected conditions that affect insurability — PTSD, TBI, sleep apnea, musculoskeletal conditions — may face rated premiums or declination. Those veterans should prioritize VGLI conversion over private term shopping.
Military-friendly insurers — USAA, Navy Federal, AAFMAA, Armed Forces Benefit Association — typically offer favorable underwriting for veterans and do not include war or hazardous duty exclusions. They are the logical starting point for private coverage comparison.
Final Expense Insurance
Final expense insurance is a small whole life policy — typically $5,000 to $25,000 — designed to cover funeral, burial, and end-of-life costs. It is permanent coverage with fixed premiums, available without a medical exam, and sized for end-of-life costs rather than income replacement.
The VA burial allowance provides $948 to $2,000 toward funeral costs depending on the circumstances of death — far less than the national average funeral cost of $8,000 to $12,000. Veterans buried in national cemeteries have gravesite costs covered, but the funeral service, preparation of remains, and transportation costs still fall to the family. Final expense insurance covers that gap.
Final expense is most appropriate for older veterans who have aged out of affordable term insurance, veterans with health conditions that preclude other options, and veterans who want to ensure their end-of-life costs do not burden their families. It is not the right tool for veterans who still need income replacement coverage — a term policy provides dramatically more coverage per premium dollar for those with dependents.
For a full breakdown of simplified issue vs. guaranteed issue policies, premium estimates by age, and what to watch for when comparing products, see the Final Expense Insurance for Veterans Complete Guide.
Other VA Life Insurance Programs
Beyond SGLI and VGLI, the VA administers several smaller life insurance programs that are available to specific categories of veterans. These programs are frequently overlooked and represent meaningful value for eligible veterans.
S-DVI — Service-Disabled Veterans’ Insurance
S-DVI (also called RH Insurance) provides up to $10,000 of whole life insurance to veterans who received a new service-connected disability rating on or after April 25, 1951, and who apply within 2 years of that rating. Veterans who are totally disabled may also qualify for a premium waiver — making the coverage effectively free. S-DVI is underwritten by the VA directly and is available regardless of other health conditions. Veterans who received a new service-connected rating within the last 2 years and have not applied for S-DVI should do so promptly — the 2-year application window is firm. Apply through the VA’s life insurance portal.
VMLI — Veterans’ Mortgage Life Insurance
Veterans’ Mortgage Life Insurance provides up to $200,000 of mortgage life insurance to severely disabled veterans who have received a VA Specially Adapted Housing (SAH) grant. Coverage decreases as the mortgage balance decreases and terminates when the mortgage is paid off or the veteran reaches age 70. VMLI is available only to SAH grant recipients and is applied for through the VA after the SAH grant is approved.
How to Choose the Right Coverage
The right life insurance strategy for a veteran depends on three factors: current life stage, health status, and financial obligations. A framework for thinking through the decision:
Currently on Active Duty
Maximize SGLI to $500,000 if you have dependents — at $30 per month it is the strongest value in life insurance available at any age. Add FSGLI spouse coverage if your spouse does not have independent life insurance. Review your beneficiary designation now, not later. If you plan to separate within the next year, begin researching VGLI vs. private term rates so the decision is not made under time pressure during a busy transition period.
Separating or Recently Separated
Do not let the 240-day VGLI conversion window pass without a decision. If you have health conditions that affect insurability, convert to VGLI within 240 days — the no-health-statement option may be the only way to maintain affordable coverage. If you are in good health, get private term quotes and compare against VGLI rates at your current age before committing. Run the comparison at projected ages 50, 60, and 70 as well — the long-term cost difference between level-premium private term and escalating VGLI is substantial for healthy veterans who carry coverage for decades.
Older Veteran — End-of-Life Planning
If income replacement is no longer the primary need — dependents are grown, mortgage is paid, spouse has independent income — the coverage need may have shifted from income replacement to covering end-of-life costs. Review whether the face amount on your VGLI or private policy still matches your actual need. If VGLI premiums have become expensive relative to the coverage need, reducing the face amount and adding a final expense policy for the burial cost gap may produce better value at lower total cost.
Frequently Asked Questions
Yes. There is no restriction on carrying both VGLI and private life insurance simultaneously. Many veterans maintain VGLI as a baseline — particularly if they converted without a health statement and have conditions that make private coverage expensive — and supplement it with private term or permanent coverage for additional face amount. Others maintain private coverage as the primary policy and keep a small VGLI policy as a backstop. The total face amount across all policies is simply the total death benefit payable to beneficiaries — there is no coordination of benefits between policies as there is with health insurance.
SGLI coverage continues in full during deployment to a combat zone — there is no combat exclusion, no hazardous duty exclusion, and no increase in premium for deployed servicemembers. A servicemember who declined or reduced SGLI before deployment can restore coverage to the full $500,000 while in a combat zone without submitting a health statement. This is an exception to the normal rule that restoring reduced coverage requires proof of good health. Servicemembers who reduced coverage before a deployment should consider restoring it before entering a combat zone.
No — these are entirely separate programs. VA disability compensation is a monthly payment to veterans for service-connected disabilities and has nothing to do with life insurance. VA life insurance programs (SGLI, VGLI, S-DVI, VMLI) are separate insurance products that pay a death benefit to beneficiaries upon the veteran’s death. Receiving VA disability compensation does not automatically provide any life insurance coverage, and having VA life insurance does not affect disability compensation. The programs are independent and can be held simultaneously.
The standard financial planning guideline is 10 to 12 times annual income for income replacement purposes — enough to allow a surviving spouse or dependents to invest the proceeds and replace the veteran’s income without depleting principal. A veteran earning $80,000 per year would target $800,000 to $960,000 of total coverage. SGLI’s $500,000 maximum often covers much but not all of this need, which is why supplemental private coverage during service makes sense for veterans with dependents and significant income. Veterans without dependents or with dependents who have independent income need significantly less coverage — the income replacement formula does not apply when there is no income to replace.
Yes — life insurance death benefits paid to a beneficiary are unrestricted funds. A surviving spouse can use SGLI, VGLI, or any other life insurance proceeds for any purpose, including purchasing a home. There is no requirement to use the funds for any specific purpose. A surviving spouse who is also eligible for the VA home loan benefit — based on the veteran’s service-connected death or disability status — can combine life insurance proceeds as a down payment with a VA home loan to maximize purchasing power, though VA home loans require no down payment, making the proceeds available for other financial needs.
Explore the Life Insurance Guides
- SGLI Complete Guide — coverage amounts, TSGLI, FSGLI, beneficiary rules, and what happens at separation
- VGLI vs. Private Life Insurance — comparing your post-separation options with rate tables and a decision framework
- Final Expense Insurance for Veterans — how burial insurance works, what it costs, and how to avoid predatory products
This article is provided by MilitaryBenefitGuide.com, an independent educational resource. We are not affiliated with the Department of Veterans Affairs, Department of Defense, or any government agency. For official benefit information, please visit VA.gov or contact your local VA office.