SGLI vs. VGLI vs. Private Life Insurance: What Every Service Member Needs to Know

The problem with how most service members think about life insurance

Most active-duty service members know they have SGLI. Most couldn't tell you the premium. Almost none have a plan for what happens when it ends.

That's not a criticism — it's a predictable outcome of a system where extraordinary insurance coverage is automatic, invisible in its cost, and taken for granted. The $26/month SGLI deduction on your LES barely registers. The $500,000 in coverage it buys feels infinite and permanent.

Neither is true. The coverage is finite (exactly $500,000 maximum), and it ends — definitively — at 120 days after your separation from active duty. Understanding this single fact changes how you need to approach life insurance planning as a military career progresses.

SGLI: what you have and what it costs

Servicemembers' Group Life Insurance (SGLI) is available to all active-duty members automatically. Enrollment is opt-in by default — you have to take action to reduce or decline coverage.

Coverage options: $50,000 increments up to $500,000 maximum.

Premium: $0.05 per $1,000 of coverage per month (effective July 2025), plus $1.00/month flat for TSGLI.

• $500,000 coverage: $25.00 basic + $1.00 TSGLI = $26.00/month total
• $400,000 coverage: $20.00 basic + $1.00 TSGLI = $21.00/month total
• $250,000 coverage: $12.50 basic + $1.00 TSGLI = $13.50/month total

Additional coverage: TSGLI (Traumatic Injury Protection) is automatically included in the $1/month flat charge above. This provides a lump-sum benefit of $25,000–$100,000 if you suffer a qualifying traumatic injury (loss of limb, vision, hearing, etc.) — separate from and in addition to the main SGLI death benefit.

Why SGLI is extraordinary: There are no health questions, no medical exam, no underwriting, and no rate adjustments for your occupation. A combat infantryman, a pilot, a special operations member, and a finance officer all pay the same $26/month for the same $500,000 in coverage. In the civilian market, your occupation, health history, and activities like skydiving or motorcycling can raise rates dramatically — or disqualify you entirely.

FSGLI (Family SGLI): Spouses of active-duty members can get coverage up to $100,000. The premium is based on the spouse's age at enrollment. Dependent children are automatically covered for $10,000 at no additional cost.

For most service members, the correct answer on SGLI elections is: take the maximum $500,000. The cost difference between maximum coverage ($26/month total) and minimum $50,000 coverage ($3.50/month total) is $22.50/month. Given what life insurance costs in the civilian market, this is not a cost-optimization decision worth agonizing over.

The SGLI termination problem

SGLI terminates 120 days after separation from active duty. There's no warning. There's no automatic conversion (there is a conversion option, but it's not automatic and it converts to expensive permanent life insurance). If you separate from active duty and take no action, your life insurance coverage ends four months later.

For a healthy 30-year-old, this gap matters most in the context of future insurability. Right now, while you're active duty and presumably young and healthy, you can get life insurance at excellent rates. After separation, if you develop a health condition — elevated blood pressure, a diagnosis, an injury that affects your medical profile — your rates go up, or you may not qualify at the same coverage levels.

The window while you're still on active duty is the best window you'll ever have to lock in private life insurance. The smart play is to use it.

VGLI: convenient but expensive

Veterans' Group Life Insurance (VGLI) is the continuation option for SGLI. After separation, you can convert your SGLI coverage to VGLI with no medical exam required — regardless of your health status at the time of separation. This guaranteed-issue window is open for 240 days after separation (and the first 120 days, you need no evidence of good health; days 121–240, you can still convert but may need to show good health).

Why VGLI sounds great: Guaranteed issue means even if you separate with health issues, you can get life insurance. For members who have developed medical conditions during service, this is genuinely valuable protection.

Why VGLI costs more than most people realize:

VGLI premiums increase every 5 years based on your age bracket. Unlike term life insurance, where you lock in a rate for the term length, VGLI rates climb throughout your lifetime:

| Age | Monthly Premium ($500,000 coverage) | |-----|-------------------------------------| | Under 30 | $30.00 | | 30–34 | $40.00 | | 35–39 | $50.00 | | 40–44 | $70.00 | | 45–49 | $95.00 | | 50–54 | $145.00 | | 55–59 | $250.00 | | 60–64 | $425.00 | | 65–69 | $690.00 | | 70–74 | $1,075.00 | | 75–79 | $1,925.00 | | 80+ | $2,200.00 |

Source: VA.gov VGLI rate tables

A 30-year-old who converts to VGLI and holds it to age 65 will pay escalating premiums throughout that period. At 30–34 the rate ($40/month) is close to what a comparable private term policy might cost for a healthy individual (roughly $25–35/month is a common illustrative estimate, though rates vary). By the mid-50s, VGLI is running $145–$250/month — substantially more than a locked-in term rate. By the early 60s, it reaches $425/month.

The cost difference over time favors private term for healthy members who lock in rates early. The exact difference depends on the term length purchased and the individual's insurability, but VGLI's age-based escalation is the key driver: a rate that looks competitive at 30 becomes significantly more expensive through the 50s and 60s compared to a policy locked in at age 30.

Private term life insurance: the right tool for most separating service members

For healthy service members without disqualifying medical conditions, private term life insurance is almost always the right long-term choice.

What term life insurance is: You pay a fixed monthly premium for a defined period (10, 15, 20, or 30 years). If you die during the term, your beneficiaries receive the death benefit. At the end of the term, coverage ends (or can sometimes be renewed at much higher rates). Unlike whole life or universal life, there's no cash value — it's pure death benefit.

Why the rates are dramatically better when you're young and healthy:

| Age | Health | $500,000 / 20-Year Term (illustrative monthly estimate) | |-----|--------|--------------------------------------------------------| | 25 | Excellent | $18–22 | | 30 | Excellent | $24–30 | | 35 | Excellent | $34–45 | | 40 | Excellent | $55–75 | | 45 | Excellent | $95–130 | | 50 | Excellent | $165–220 |

These are illustrative estimates only. Actual premiums vary significantly by insurer, gender, specific health profile, tobacco use, and state. Get quotes from multiple carriers for accurate figures.

The pattern, however, is consistent across insurers: every year you wait to lock in a term policy costs you in permanently higher premiums.

A 30-year-old who locks in a 20-year term policy at $28/month keeps that rate from age 30 to age 50. That same person who waits until separation at 35, or until they develop a health condition at 40, pays substantially more — potentially for the same benefit.

The right move for most service members: Buy a private term life policy 12–24 months before your anticipated separation date, while you're still in peak health and on active duty. You can hold it alongside SGLI without any conflict. Once you separate, SGLI ends and your private policy continues.

When VGLI is the right choice

VGLI isn't always the wrong answer. It's the right answer in specific circumstances:

If you develop a health condition before separation: If your medical profile during service makes you uninsurable at standard rates in the private market, VGLI's guaranteed-issue conversion is the only way to maintain substantial coverage. The higher premiums are a real cost, but having $500,000 in coverage at any price may be better than being declined entirely.

As a bridge policy: Some separating service members use VGLI to maintain coverage during the transition period while they sort out their civilian life and finances, then replace it with a private policy once they've established civilian income and can go through proper underwriting.

If you're within 10 years of expected need: For a service member in their mid-50s with health issues who separates, VGLI's cost at that age may be comparable to private alternatives, and the guaranteed issue avoids the underwriting risk.

Combat zone: why you keep SGLI

Some private life insurance policies may include war exclusion clauses — check your specific policy terms. If your policy excludes combat deaths, SGLI remains your essential coverage while deployed.

SGLI covers combat deaths with no exclusions. If you hold a private term policy alongside SGLI (which you should, as your post-service coverage), keep SGLI active throughout your deployment regardless of what your private policy covers.

Do not cancel or reduce SGLI coverage before a deployment. The $26/month is the cheapest combat-zone life insurance available anywhere.

After separation, the combat zone consideration becomes less relevant (since you're no longer deploying), and private term coverage takes over as your primary protection.

The FSGLI decision

FSGLI for your spouse deserves its own consideration.

Coverage: Up to $100,000 in coverage. Premium is based on the spouse's age — typically $5–$20/month for spouses under 45.

What FSGLI doesn't cover: Dependent children are covered automatically at $10,000 — meaningful if the concern is final expenses, but not a replacement for a spouse's primary income contribution.

The question to ask: Does your spouse have independent life insurance, either through their own employer or privately? If your spouse is employed, their employer may provide group life coverage. If your spouse doesn't work outside the home, $100,000 may be inadequate for your family's actual needs (childcare costs, mortgage coverage, income replacement while you grieve and adjust). Consider supplementing FSGLI with private coverage on your spouse's life.

A simple framework

| Situation | Recommendation | |-----------|---------------| | Active duty, 5+ years from anticipated separation | Hold maximum SGLI; no urgent need for private policy yet | | Active duty, 1–3 years from separation | Buy private 20-30 year term life insurance NOW while healthy | | Separating next 120 days | Private term life is the priority; convert to VGLI only if health issues make private coverage unaffordable | | Separated, healthy, held VGLI | Evaluate replacing VGLI with private term if you're under 45 and in good health | | Separated with health conditions | VGLI likely the best available option; maintain it | | Deployed to combat zone | Keep SGLI regardless of other policies | | Reserve/Guard | Evaluate SGLI partial coverage options; consider FSGLI for spouse |

The practical steps

If you're active duty and haven't addressed post-service life insurance, here's where to start:

1. Verify your SGLI coverage level on your LES — make sure you're at $500,000 and that TSGLI is enrolled.

2. Estimate your life insurance need — generally 10–12 times annual income for income replacement, adjusted for mortgage balance, number of dependents, and spousal income. Most military families with dependents need $500,000–$1,000,000 in coverage.

3. If you're within 2 years of separation: Contact a life insurance company (most operate entirely online now) and get quotes for 20 or 30-year term life coverage. The application process takes 1–3 weeks and may involve a medical exam (usually conducted at your home or unit area). Apply while you're in the best health of your life.

4. After separation: Do not let 120 days pass without either private coverage in place or VGLI enrollment completed. This is not a task to defer.

5. Brief your family: SGLI beneficiary designations are managed through SGLI/myPay. Verify your designated beneficiary is current before every deployment. A beneficiary designation that was set years ago and never updated can create significant complications for families during an already difficult time.

The bottom line

SGLI is one of the best insurance values available to anyone in the United States — universal coverage, occupationally-neutral pricing, immediate enrollment, and genuine combat protection for $26/month. Use it fully while you have it.

The mistake is treating it as permanent.

The service member who buys private term life insurance at 28 or 30 — while healthy, on active duty, before any of life's complications develop — is the one who arrives at 50 or 55 with $500,000 in coverage that costs $28/month, locked in two decades earlier. The one who waits until separation at 38, or until a health issue at 42, pays multiples of that rate for the same protection.

The SGLI window is also your cheapest private insurance window. Use both simultaneously during the transition period. Your future self, and your family, will be glad you did.