2024 SGLI & VGLI Rates: Are Your Family's Needs Met?

When it comes to life insurance, there are a couple of universal truths: nobody likes talking about it and nobody likes paying for it. Talking about it seems like bad karma and purchasing it can feel unrewarding because there seems to be no immediate benefit. But talking about and addressing the need for life insurance makes it more likely your family will be prepared in the event of your unexpected death.

What is SGLI and how much does it cost?

Military members are eligible for affordable term life insurance known as Servicemembers’ Group Life Insurance (SGLI). In 2024, military members are automatically enrolled in SGLI at the full coverage amount of $500,000 for just $31 per month, or $372 per year. While auto-enrollment is set at $500,000, you have the ability to make changes to your SGLI coverage at any time and can select up to the full coverage amount in increments of $50,000. Some service members who are single and have no dependents may feel tempted to decline SGLI, or at least reduce the amount of coverage in order to lower their monthly premium. But in most cases, the low cost of SGLI makes keeping and paying for the full $500,000 of coverage a smart financial decision – even if it seems like more than you need at this stage of your life.

Those covered by SGLI also automatically receive traumatic injury protection in the form of Servicemembers’ Group Life Insurance Traumatic Injury Protection (TSGLI). If the criteria for a traumatic injury are met, eligible service members may receive from $25,000 to $100,000 in short-term financial support to help during the recovery from a severe injury that is sustained while serving in the military.

What is VGLI and how much does it cost?

Separating or retiring service members can’t take SGLI with them when they leave active duty, but they have the option to replace their SGLI with Veterans’ Group Life Insurance (VGLI). They can apply for VGLI within 1 year and 120 days from discharge for up to the amount of coverage they had with SGLI. 

Monthly premiums for VGLI are substantially higher than SGLI and are based on your age and the amount of coverage you choose. They increase at five-year intervals, so VGLI is not an ideal long-term or permanent solution. In 2024, at age 65, the same $500,000 of coverage that costs $31 per month for those on active duty costs about $700 per month for veterans. That’s a pretty good reason to consider replacing it with a permanent life insurance policy well before the monthly VGLI premium becomes prohibitive.

A First Command Financial Advisor can help you assess the needs of your family to determine the right amount and type of life insurance you will need to replace SGLI when you leave the military.

SGLI isn’t as much coverage as it seems.

For most families, the primary role of life insurance is to replace some or all of the income of the deceased. If it’s only necessary to replace that lost income temporarily, $500,000 might go a long way. But if the objective is to indefinitely or permanently replace the lost income, it may be necessary to keep the lump sum intact and live off the interest it generates. In that scenario, $500,000 won’t go nearly as far. Most financial planners suggest spending no more than four percent of your principal annually – meaning that $500,000 would produce only $20,000 in annual income.

In some cases, it may make more sense to use life insurance proceeds to pay off debt and reduce the cost of living for the surviving family members, or to set aside a portion for anticipated future expenses, like college tuition for children. But this can add up. As the table below illustrates, paying off an average mortgage, car loan and credit card balance and setting aside enough money to pay college tuition for just one child can exhaust most of a service member’s SGLI benefit, leaving only a relatively small amount to help generate supplemental income.

How do you supplement or replace SGLI and VGLI to prepare for your family’s needs?

You may need help determining the best way to fill any gap that might exist between your military life insurance and the needs of your survivors. An experienced financial advisor can walk you through a detailed survivor needs analysis that takes the unique needs of your family into account. And even if you don’t have dependents yet, planning ahead can be a smart financial move for the family you hope to have one day. The simple truth is that life insurance is most affordable when you are young and in good health.

At First Command, over 80 percent of our Financial Advisors are veterans or military spouses. They are well versed in military pay and benefits, and the unique challenges and opportunities associated with life in the military. Your Advisor can help ensure that your life insurance coverage is aligned with the needs of your family and give you the peace of mind that comes from knowing that you've taken action to protect the people you care about most.

FAQ:

Q: Can you have SGLI and VGLI at the same time?

A: Only active-duty service members are eligible to enroll in SGLI. Upon separation or retirement, you have up to one year and 120 days from discharge to apply for VGLI.

Q: Do veterans still have SGLI?

A: You do not keep SGLI when you leave active duty. You do have 120 days of free SGLI coverage from the date you leave the military, but you will need to consider other options for the long term, like applying for VGLI or securing personal life insurance.

Q: Should I replace SGLI with VGLI?

A: The answer depends upon your individual circumstances. Look at the cost of VGLI for the age at which you are leaving the military and be aware that premiums increase in five-year increments and get substantially higher around 55 years of age. And keep in mind that the sooner you purchase a personal policy, the lower your premium will be. Your insurability is a factor to consider too. If you have a pre-existing medical condition, VGLI may be appealing – at least initially – because no proof of insurability is required. Your Financial Advisor can help you determine whether VGLI or a personal life insurance policy might be better for you.

Q: Will SGLI or VGLI premiums or coverage options change in 2025?

A: Premiums and coverage options for SGLI and VGLI do not typically change annually and are not expected to change in 2025. The last coverage option change occurred in March of 2023 when it increased to up to $500,000.⁷ The last SGLI premium change occurred in 2019 when the rate decreased from $.07 to $.06 per $1,000 of coverage.⁸ VGLI rates vary based on age and last changed in April of 2021 when they decreased an average of seven percent across all age groups.⁹

¹Veterans’ Group Life Insurance | VGLI (va.gov)
²Average mortgage debt in 2024: Facts and stats on what U.S. homeowners owe (yahoo.com)
³American Debt: Auto Loan Balances Hit $1.6 Trillion in Q3 2023 (investopedia.com)
⁴What's the Average Amount of Credit Card Debt in the U.S.? | Credit Card News & Advice | U.S. News (usnews.com)
⁵Average cost of a funeral in 2024 (Itemized breakdown) | finder.com
⁶How Much Does College Cost in the US? (moneygeek.com)
⁷SGLI Increase to $500,000 FAQs - Life Insurance (va.gov)
⁸Servicemembers Group Life Insurance SGLI Premiums - 2024 Rates (themilitarywallet.com)
⁹viewPDF.cfm (va.gov)