It’s a dangerous world out there, especially for members of the military. Protecting your country can often come with some unique occupational hazards, and carries a non-trivial chance of serious injury or death depending on where you’re posted and what branch of the service you’re in.
Since life insurance carriers often evaluate a person’s eligibility for life insurance based on their risk of death, active duty service members are often (but not always) stuck with higher prices if they opt for commercially available life insurance products. Luckily, they have other options tailor-made for their situation – the Service members Group Life Insurance, or SGLI.
What is SGLI?
SGLI is a military-provided life insurance option which covers active duty service members in the US. It combines elements of Traditional Life Insurance, Accidental Death and Dismemberment coverage, and Long-Term Care protection under one policy that offers guaranteed coverage over the duration of your tenure in the military.
When you join the military, the US government automatically enrolls you in the SGLI program and begins deducting premium payments from your paychecks. However, all service members have the right to opt out of the SGLI coverage to try for a lower price with an alternative life insurance policy if they wish.
SGLI is a standardized plan that is the same for every service member, but there are a few changes that you can make to your coverage to make sure your family is covered correctly. When you initially are enrolled in SGLI, you are covered for the plan’s maximum death benefit amount of $400,000, which costs around $26 every month taken directly from your paycheck. Service members can opt to reduce their coverage from the maximum in increments of $50,000, which reduces the deduction by $3.25 monthly per increment.
If you die on active duty, SGLI will allow your family to receive an extra $150,000 payment up to the maximum allowed coverage of $400,000, so you have the option to pay for a lower coverage amount and still receive the full $400,000 death benefit depending on the circumstances.
Non-military spouses and children can also be covered using the SGLI’s family coverage program, FSGLI. FSGLI can provide up to $100,000 in coverage for spouses of active-duty military members, and $10,000 each for dependent children.
What SGLI Covers
SGLI covers the life of the insured with the face amount of the policy, just like life insurance. However, it also contains separate provisions for injuries that can offer a separate payout of up to $100,000 for loss of sight, hearing, nervous system function, and dismemberment as the result of traumatic injuries.
The conditions that SGLI covers with traumatic injury benefits include:
- Total, permanent loss of sight, speech or hearing
- Paralysis of any limb or limbs
- Loss of a hand or foot
- Loss of fingers, toes, or limbs
- Burns across 20% of either body or face
- Loss of ability to perform Activities of Daily Living (eating, bathing, dressing, toileting, transferring to beds or chairs, and continence.)
- Inpatient hospitalization
- Reconstructive surgery costs for repairing wounds to limbs or face
Alternatives to SGLI
While SGLI’s coverage plan is fairly comprehensive, many young and healthy military service members are often eligible for better coverage amounts at lower prices through commercially available life insurance policies. If you’re stationed in a fairly safe position and are able to complete your life insurance application while you’re in the US, almost every commercial life insurance carrier will be able to cover you.
If you’re stationed in a fairly safe position and are able to complete your life insurance application while you’re in the US, almost every commercial life insurance carrier will be able to cover you.
However, not all life insurance carriers offer meaningful coverage to service members on active duty in dangerous parts of the world – the heightened risk associated with combat deployment can often mean that coverage will be denied outright. Even for carriers that are willing to cover front-line service members, coverage in the case of death via an ”act of war,” such as dying in combat, is often excluded from policies.
This means that comparison shopping for term life insurance policies is crucial if you’d like to find the right coverage for your situation. The simplest way to shop around for coverage that will fit your life is to use an independent agency like Quotacy. If you apply online through our application process, we’ll shop around behind the scenes for you to make sure that you’re getting the best deal possible on a plan that will cover your lifestyle.
What Carriers Will Want To Know
If you decide to apply for coverage through a civilian life insurance carrier as an alternative to SGLI, they will likely have quite a few questions to ask you in order to give you a price that most accurately reflects your risks. Those questions will include:
- Are you now a member of any military service, active or inactive?
- What branch do you serve in?
- What is your present duty status?
- What is your rank?
- What is your unit, assignment, and location?
- What is your occupational specialty?
- Does your position involve any hazardous activities (like aviation, diving, parachuting, bomb disposal, special service groups, etc.)?
- Do you receive supplemental hazard pay based on your duties? If so, how much?
- To the best of your knowledge, are you aware that A: you or your unit will be transferred overseas? If so, where? B: you will be transferred to a new unit? C: you or your unit will be alerted for duty (if presently in the Reserve or National Guard)?
Carriers will ask for this information at various points during your application process. Depending on the company and the amount of information you give them to work with, you may get these types of questions upfront or a few weeks in.
If you opt for an independent agent life insurance agent, they should be able to steer you towards carriers that have better track records working with military families, thanks to their ability to shop around for your case. However, not all independent agents will work at length for military families, so be sure to speak with your agent up front to make sure they can help your family.
Life insurance is important for all families, especially if a parent has a dangerous job. Losing a mother or father can change a child’s life and leave a spouse with unexpected debts, not to mention the grief and sadness that come from losing someone you love. Working with a life insurance agent will help you learn the facts and find the best options available, whether that’s through a commercial life insurance carrier or through SGLI’s automatic coverage.
Photo Credit to Sgt. Randall A. Clinton
About the writer
Eric moved from sales to communications at Quotacy. His writing is informed by his experience guiding hundreds of people through their own life insurance buying journey. Eric lives in Minneapolis, where his coworkers are trying to convince him to start his own podcast, do stand-up, or take his humor into the spotlight. Connect with him on LinkedIn.