If you are considering converting your SGLI into VGLI and you are looking for a straightforward review of Veterans Group Life Insurance than you have come to the right place. In the following article we will highlight the positives, negatives, and potential alternatives to VGLI.
Veterans Group Life Insurance
About Veterans Group Life Insurance
Retired military have the option of converting their Servicemembers Group Life Insurance into Veterans Group Life Insurance. Upon separating from military service you will have roughly a year and one hundred and twenty days to apply. If you apply within the first 240 days then there are no health questions involved in the application process.
Note: Veterans Group Life Insurance premiums go up every 5 years.
You can convert your SBLI or VGLI to a commercial policy, such as with Prudential Life Insurance. There are currently 17 companies that you can choose from. Sometimes this is the best option. However, with only 17 companies to choose from your options are limited. In contrast, TermLife2Go works with dozens of top rated best life insurance companies, providing over three times as many options for our clients. If you are considering converting your SBLI or VGLI policy, give us a call and let us compare your conversion premium with what you can qualify for from one of the 60 companies we represent. That way you can guarantee you are getting the best company at the best price.
Veterans Group Life Insurance Review
VGLI is excellent for ex-military who need life insurance and would otherwise not qualify due to a pre-existing health condition. This is typically the only time we would recommend converting SGLI into VGLI. For those with a pre-existing condition not fatal to a life insurance application, there is probably a cheaper alternative than VGLI, especially when you consider that Veteran Group Life Insurance premiums increase every five years (more on this below).
No health questions or medical exam
There are no health questions if converted in the first year and 120 days. Also, there is no exam. That is because VGLI charges the same no matter how healthy or unhealthy you are.
Good rates for smokers
Being a smoker would fall into the pre-existing health condition category. So for all you smokers, VGLI might be the best game in town. The reason for this is that VGLI’s premiums are based solely on age. That is a huge positive for someone unhealthy who smokes. However, for someone healthy, even if you are a smoker, there are probably better options available in the marketplace.
Level Death Benefit
Another positive is that your face amount or death benefit will remain the same. However, you do have the option of requesting that it be lowered. This might be a good idea if you can only qualify for Veterans Group Life Insurance but your premium is too high.
Terminal Illness Rider
Veterans’ Group Life Insurance comes with a terminal illness rider. If you are diagnosed terminally ill and have been given a life expectancy of nine months or less, your policy will pay out up to 50% of the proceeds.
There is no suicide exclusion
Most life insurance policies come with a two year suicide exclusion. This means that if the insured commits suicide in the first two years of the policy the carrier does not have to pay the death claim. In contrast, Veterans’ Group Life Insurance does not have a two year suicide exclusion.
Your VGLI rates almost double every five years
The #1 negative about VGLI is that at age 75 your rates will double. For example, a $400,000 life insurance policy for a 40 year old is $68 a month. Remember however, Veterans’ Group Life Insurance is set up so that the rate goes up every 5 years. So at age 45, a $400,000 policy is $88 a month. (You can view the chart on VGLI rates here). The premium continues to climb until age 75 where the premium is fixed for the remainder of your life at $1,840 a month. The reality is, very few people will be able to pay the premiums past age 74. Could you imagine being retired on a fixed income and have to pay $1800 a month for life insurance? Neither can we. See the VGLI rate chart below.
Please note: Sample VGLI rates are subject to change and are not reflective of what your rates may be. This section of sample quotes is for informational purposes to give our visitors an idea of what rates may be down the road. VGLI rates last updated as of March 2016.
|Coverage||Age 50-54||Age 55-59||Age 60-64||Age 65-69||Age 70-74||Age 75 +|
You can compare the above VGLI rates with the following term life rate charts:
Men and women charged the same premium
With most other companies, life insurance premiums for women are much lower than for men when comparing similar ages and health classes. Women are typically healthier and have a longer life expectancy so it makes sense that life insurance is cheaper. However, Veterans Group Life Insurance makes no such concessions when it comes to the premium for a man or women. Both will pay the same because VGLI only takes age into account.
When we speak to clients who are considering converting their SGLI to VGLI or already have Veterans Group Life Insurance, we try and emphasize that what they are paying today is NOT what they will be paying down the road. Why does this matter? The reason this matters is because what may seem like manageable VGLI rates today may be unmanageable five or ten years down the road when VGLI rates have doubled or tripled.
VGLI Insurance Product Options
A few different types of life insurance to consider other than VGLI would be either a term life insurance policy, a return of premium policy, or a universal life insurance policy, such as indexed universal life. Now all three of these could be more expensive initially.
However, the key is running a scenario where we determine your VGLI rates in twenty years or so and add up the premium you will have paid and compare it to what you would have paid over the same time with a commercial policy. Often the commercial policy will be substantially less once your VGLI rates have quadrupled over the 20 years.
VGLI vs Other Insurance
Here is an example of a male age 40 at a preferred rate class.
(A preferred rate class is the second best rate class available).
See our VGLI rates disclaimer.
Consider a $250,000 policy for a 40 year old. The VGLI premium is $42.50 a month. However, that same policy premium jumps to a whooping $270 a month at age 60. And by age 70 the VGLI payment is $575. Finally, by age 75 your VGLI premium payment is $1,150.
In contrast, a preferred male age 40 would pay $37 a month for 30 year term life insurance. A 35 year return of premium policy, where all your money is returned if you don’t die, is $104.54. And a Universal Life policy that lasts the rest of your life would be $126 a month fixed premium.
In this example, VGLI was more than the term and less than the return of premium and universal life insurance. However, by age 60 you would be paying more than double a month in VGLI premiums compared to those two policies.
The bottom line is we might be able to save you thousands over the life of your policy. We have saved many people over the years substantial amounts of money on life insurance. It is our knowledge, experience, and options that allow us to achieve our goal of finding you the best life insurance rates by age—for you, based on your unique health and lifestyle.
Whether you are considering Veterans Group Life Insurance or converting to a commercial life insurance company, let us compare what we have to offer. We work with the best life insurance companies in the United States. Even if you have an existing health condition we want to help. The worst case scenario is you keep your VGLI insurance. However, chances are we will find a product (see our list of life insurance companies) that will save you a ton of money over the long term.
We do not favor one life insurance company over another. Instead, we find out what you need and then we recommend the lowest priced, best life insurance company to meet your specific need. Therefore, if price matters to you, give us a chance to earn your business. We are here to serve you.
Please give us a call today and see what we can do for you!
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