(Newswire.net -- July 24, 2013) Kailua Kona, HI -- If you are in the military and are soon retiring , you currently receive SGLI and the option of taking VGLI once you transition out.
Lets discuss and compare VGLI and Civilian based Standard Term Life Insurance Rates and reasons why you may want to consider using VGLI or moving to a civilian based Term Life Insurance.
VGLI (Veterans Group Life Insurance) History
This program has been around since 1974. It was designed as a simple 5 year Term Life Insurance plan for those leaving the military. In 1992 it became a renewable Term Life Insurance plan. You can read more about the VGLI program by clicking HERE
Here are some good points about the VGLI plan:
1. Premiums are based on age only – Depending on your current age, initially, the rates might be quite good.
2. No Medical questions – As long as you apply within 240 days of separation
3. No Medical Exam is needed
4. You can request up to 50% of the face amount should you be diagnosed as terminally ill and death is projected to occur within 9 months.
5. Tobacco users – Plan is based on Standard health , Non Tobacco rates. If you Smoke, this is a great plan.
Here are some "Not So Good Points" about VGLI plans:
1. Same rates for men and woman. Woman, generally, get the Best Life Insurance Rates
2. No, Non-Tobacco Rates – Non Smokers will always get a better health rating on Term Life Insurance plans.
3. The monthly premiums will go up , way up, when you reach certain age brackets.
4. VGLI only offers up to $400K of coverage. Depending on your situation you could be underinsured.
5. No opportunity to apply to a better health class to get better rates.
How VGLI Rates Stack up:
Example: 45 year old male, Non Smoker, California resident, $400,000 of 20 year Term Life Insurance. Standard health class.
VGLI - Age Bracket of 40-45 Rate is $88.00 per month HOWEVER when the person turns 50 the rate goes up to $144 a month!
Here is a comparison of some civilian based Term Life Insurance Rates - Note the available Health Classes:
Banner Life Insurance $400K , 20 year Term , Standard Heath, $82.69
SBLI Life Insurance $400K, 20 year Term , Preferred Standard Health $70.54
SBLI LIfe Insurance $400K , 20 year Term, Preferred Health $51.85
Here are a couple of key points about the civilian based Term Life insurance plans:
1. Rates DO NOT go up during the Term period.
2. You have the opportunity to qualify for Preferred Standard or Preferred health classes. This means even better rates.
When to consider staying with the VGLI plan:
If you have a moderate to severe health impairment and obtaining a civilian based Term Life Insurance Plan is not possible, then the VGLI plan would work.
If you have to keep VGLI, due to a health impairment , consider these options to lower the costs
1. Under 50 , lower the face amount to bring the costs down.
2. If you are employed look into your civilian employers Group Life Insurance plan.
3. If you are 50+, consider applying for a small Whole Life Plan (Burial Insurance) as they can be more lenient with a person's health condition. Then keep a lower VGLI face amount to help keep your VGLI rates lower.
4. 65+ Examine your finances. You may not need term life protection at this age. Consider a small Burial Insurance plan instead.
Before you separate from the military, shop around for civilian based Term Life Insurance. If you have already separated, keep the VGLI plan and search around for better rates. Make sure you work with an agent who has access to 50+ carriers. This insures that you can see a variety of life insurance plan options.
Remember, DO NOT GO UN-INSURED, even if you have to drop the face amount to get a more affordable rate. A standard fully underwritten term life insurance plan will require a medical exam ( no cost to you) and the process can take 4-6 weeks to complete.