Military Life Insurance: SGLI vs. VGLI vs. Civilian Policies Complete Comparison

Bottom Line Up Front: SGLI ($500K for $32/month) is mandatory and cheapest while active duty. After separation, compare VGLI ($50-$310/month depending on age) vs. civilian term life ($30-$200/month). Under 40 and healthy = civilian term life cheaper. Over 50 or health issues = VGLI better (no medical exam if convert within 240 days). Most need $500K-$1M total coverage (10x annual income).

The Three Options Compared

| Feature | SGLI (Active Duty) | VGLI (Veterans) | Civilian Term Life | |-----------|----------------------|-------------------|---------------------| | Coverage | Up to $500K | Up to $500K | $100K-$5M+ | | Cost (age 30) | $32/month | $50/month | $30-$50/month | | Cost (age 50) | $32/month | $160/month | $80-$150/month | | Medical exam | No | No (if convert within 240 days) | Yes | | Availability | Active duty only | Veterans only | Anyone | | Portable | No (ends at separation) | Yes | Yes | | Renewable | Automatic | Until age 90 | Usually until age 80 |

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SGLI Deep Dive (Active Duty Only)

What You Get

• Coverage: $500K (can reduce to $50K in $50K increments)
• Cost: $32/month for full coverage ($0.065 per $1,000)
• Who's covered: All active duty (automatic enrollment)

Additional Coverage During Deployment

• TSGLI: $1/month for traumatic injury coverage
• Supplemental: Can increase to $1M during combat deployment
• Family SGLI: Spouse ($100K max), Kids ($10K each, free)

When SGLI Ends

• 120 days after separation (coverage ends)
• 240-day window to convert to VGLI (no medical exam)

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VGLI (Veterans Group Life Insurance)

Who Should Get VGLI?

VGLI is better if:

• ✅ Age 50+ (civilian term life gets expensive)
• ✅ Health issues (can't qualify for civilian insurance)
• ✅ Want guaranteed coverage (no medical exam required if convert within 240 days)

Civilian term life is better if:

• ✅ Age <40 and healthy
• ✅ Can pass medical exam
• ✅ Want more coverage (>$500K)

VGLI Rates (Age-Based)

For $500,000 coverage:

• Age 30: $50/month ($600/year)
• Age 40: $85/month ($1,020/year)
• Age 50: $160/month ($1,920/year)
• Age 60: $310/month ($3,720/year)

Rates increase every 5 years (as you age into new bracket)

How to Convert SGLI to VGLI

Within 240 days of separation (NO medical exam):

1. Go to VA.gov/life-insurance
2. Apply for VGLI online
3. Choose coverage amount ($50K-$500K)
4. First premium billed

After 240 days (MEDICAL EXAM required):

• Must prove insurability
• May be denied if health issues
• Higher risk, not recommended

CRITICAL: Apply within 240 days to avoid medical exam!

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Civilian Term Life Insurance

Best Providers for Veterans

1. USAA Term Life

• Rates: Competitive ($35-$45/month for $500K at age 30)
• Benefits: Military-friendly, easy process
• Medical exam: Required (paramedic comes to your home)

2. Navy Federal Term Life

• Rates: Similar to USAA
• Benefits: Bundling with other products
• Medical exam: Required

3. SBLI (The Savings Bank Life Insurance)

• Rates: Often lowest
• Benefits: Direct (no agents), simple online application
• Medical exam: Required

4. Ladder Life

• Rates: Very competitive for healthy individuals
• Benefits: 100% online, instant quotes
• Medical exam: Required (or questionnaire only for lower amounts)

Term Life vs. Whole Life (DON'T BUY WHOLE LIFE)

Term Life:

• Coverage for set period (10, 20, 30 years)
• Cheap ($40/month for $500K)
• No cash value
• Best for: 95% of military members

Whole Life:

• Coverage for entire life
• Builds cash value
• Expensive ($300-$500/month for $500K)
• Complex, high fees

Why whole life is usually BAD:

• 10x more expensive than term
• "Cash value" grows at 2-3% (worse than TSP C Fund at 10%)
• Agents earn huge commissions (why they push it)

Exception: Estate planning for wealthy (>$10M net worth)

For military members: Stick with term life. Invest difference in TSP.

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How Much Life Insurance Do You Need?

The 10x Rule (Simple)

Need: 10x your annual income

Examples:

• E-5 ($60K/year) → Need $600K
• E-7 ($80K/year) → Need $800K
• O-3 ($100K/year) → Need $1M

Detailed Method (More Accurate)

Calculate actual needs:

1. Income replacement: $60,000/year × 10 years = $600,000
2. Debts to pay off: $30,000 (car, credit cards)
3. Mortgage payoff: $200,000 (so spouse owns home free)
4. College for kids: $100,000 ($50K per kid × 2)
5. Emergency fund: $20,000
6. Total need: $950,000

Your coverage:

• SGLI: $500,000
• Additional civilian: $450,000
• Total: $950,000 ✅

Coverage by Life Stage

Single, no kids:

• Minimum: $100,000-$250,000 (cover funeral, debts)

Married, no kids:

• Minimum: $500,000 (SGLI sufficient)
• Better: $750,000 (add $250K civilian term)

Married with kids:

• Minimum: $750,000
• Better: $1,000,000-$1,500,000

Senior enlisted/officers with kids:

• Minimum: $1,000,000
• Better: $1,500,000-$2,000,000

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SGLI vs. Civilian at Different Ages

Age 30, $500K Coverage

SGLI (while active duty):

• Cost: $32/month = $384/year

VGLI (after separation):

• Cost: $50/month = $600/year

Civilian (healthy):

• Cost: $35/month = $420/year

Winner: SGLI (while active), then switch to civilian if healthy

Age 40, $500K Coverage

VGLI:

• Cost: $85/month = $1,020/year

Civilian (healthy):

• Cost: $60/month = $720/year

Winner: Civilian (saves $300/year)

Age 50, $500K Coverage

VGLI:

• Cost: $160/month = $1,920/year

Civilian (healthy):

• Cost: $120/month = $1,440/year

Winner: Civilian (saves $480/year), but gap narrowing

Age 60, $500K Coverage

VGLI:

• Cost: $310/month = $3,720/year

Civilian (healthy):

• Cost: $250/month = $3,000/year

Winner: Civilian still cheaper, but if you have health issues, VGLI is guaranteed

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Action Steps

While Active Duty:

1. ✅ Keep SGLI at $500K (don't reduce)
2. ✅ Verify beneficiary is correct (update after marriage/divorce/kids)
3. ✅ Get additional civilian term if you need >$500K

120 Days Before Separation:

1. ✅ Decide: VGLI or civilian term life?
2. ✅ If civilian: Get quotes from 3-5 companies
3. ✅ Apply for civilian term BEFORE separating (while healthy/employable)
4. ✅ If VGLI: Apply within 240 days (no exam required)

After Separation:

1. ✅ Ensure coverage started (VGLI or civilian)
2. ✅ Update beneficiaries
3. ✅ Review coverage every 3-5 years (needs change as kids grow)

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Related Guides

• SGLI Life Insurance Complete Guide
• Estate Planning for Service Members
• Financial Planning After Military Retirement

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Remember: Life insurance protects your family. Get enough coverage (10x income), choose cheapest option for your age/health, and review regularly. SGLI is cheapest while active. After separation, compare VGLI vs. civilian - most under 50 save money with civilian term life.