Since child support and maintenance payments stop when the obligor dies, family law courts frequently order obligors to carry term life insurance to protect his/her survivors in the event of death. Term life insurance is where a person pays a premium for a time frame, and if he/she dies during that coverage period, the benefit is paid. If payments lapse, so does the policy, and, the policy has no surrender value.
Some employers offer inexpensive term life policies, and the military is no exception.
Servicemembers Group Life Insurance (SGLI)
The military offers SGLI, in $50,000 increments, up to $400,000 of coverage. The premium is fixed, regardless of age or health - just 7 cents per month for each $10,000 of coverage, plus an extra $1 per month for a mandatory Traumatic Injury Protection Coverage. So the maximum $400,000 of coverage is only $29 per month - which compares pretty favorably to private plans.
A servicemember can designate both primary and contingent beneficiaries, as well as multiple primary beneficiaries in whatever percentages he/she chooses.
Family SGLI (FSGLI)
FSGLI provides coverage for servicemember's spouse and dependent children (including stepchildren living in the household).
Spouse coverage is available in an amount from $10,000 to $100,000 (or up to the SGLI coverage amount, if lower). If no other amount is selected, then the default is $100,000. The premium is based upon the spouse's age bracket, and ranges from 55 cents per $10,000 if the spouse is under 35, up to $5.20 per $10,000 of coverage if the spouse is 60 or older. See FSGLI Premium Rates Table.
Dependent child coverage is a fixed $10,000 per child. The premium is free.
FSGLI coverage begins automatically for the following categories of servicemembers, providing they have SGLI coverage in effect:
- Being married when the FSGLI program began on November 1, 2001,
- Entering the service with a spouse and/or children, or
- Marrying or having a child while in the service.
To reduce or decline spouse coverage, the servicemember must fill out an SGLV 8286A, Family Coverage Election.
Veterans' Group Life Insurance (VGLI)
VGLI is a post-military insurance program which allows veterans to convert their SGLI into a renewable term life policy. It is available to all servicemembers upon separation, not just retirees. The veteran has one year, plus 120 days, to apply for this coverage. Coverage amounts are from $10,000 up to $400,000, though they cannot exceed the SGLI coverage in effect at separation.
Unlike SGLI, the premiums go up as the veteran gets older, and they also start out more expensive than SGLI (a 40 year-old will pay $76 per month for the same $400,000 coverage which costs a servicemember $29, and a 50 year-old will pay $150 for that coverage). For more details, see the Premium Rates Table.
SGLI Page, on the Department of Veterans Affairs web site.
Family SGLI Page, on the Department of Veterans Affairs web site.
VGLI Page, on the Department of Veterans Affairs web site.
Military.com page on VGLI, with information on VGLI eligibility, etc.
Traumatic Injury Protection Program (TSGLI) article, in the Military Divorce Guide.