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Life Insurance Benefits for the Military

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Do military personnel have life insurance protection?

All members of the uniformed services are insured for $400,000 under the Servicemembers' Group Life Insurance (SGLI) program. SGLI is a federal program that provides servicemembers with term life insurance, which provides life insurance coverage for a specified period of time. SGLI life insurance is issued under a group policy purchased by the Department of Veterans Affairs from a private insurance company. 

Servicemembers can choose a lesser amount of coverage or can decline coverage. They also may obtain coverage from private insurance companies through individual policies, or a group plan.

What is the cost for SGLI?

Members pay $26.00 per month for full-time coverage, which is deducted from their military pay. Personnel serving part-time duty pay $26 annually for $400,000 part-time coverage.

Who is eligible?

All full-time, active duty servicemembers and ready reservists performing active drilling status are automatically insured for the maximum $400,000. Reservists who are subject to involuntary call-up authority also are automatically eligible.

Does SGLI offer coverage for families?

Yes. The maximum coverage available for a spouse is $100,000. The premium for spouses is age-based, and is deducted from the servicemember's pay.

Children are eligible if they are dependents under age 18, or full-time students age 18-23. The maximum coverage is $10,000 and is offered at no cost. However, the servicemember must carry SGLI for dependent coverage to be in effect.

If a servicemember owns an individual (private) life insurance policy, will a life insurer pay claims if he or she dies in war or from terrorist acts?

Most individual life insurance currently in force does not include war or terrorism exclusions, and such exclusions may not be subsequently added by the company. A death claim resulting from an act of war or terrorism is treated the same as any other death claim.

Some policies may contain an act of war or terrorism exclusion that applies to an accidental death benefit rider. However, only the accidental death benefit - not the basic death benefit - would be subject to the exclusion.

Some companies also sell freestanding individual accidental death and dismemberment policies that may include war and terrorism exclusions.

Do policies currently being sold to military personnel contain war and terrorism exclusions?

Some insurers market life insurance to military personnel that contain no war or terrorism exclusions. Others, however, may choose to exclude death benefit payments in the event the insured dies due to war or terrorism. Presently few insurers, if any, are attempting to exclude coverage for acts of terrorism.

It is important to remember that if an existing policy contained no war or terrorism exclusion at the time it was issued, it may not be subsequently amended to include any exclusion.

All life insurance consumers should read and understand the contracts they sign to know exactly how much their beneficiaries can expect to receive in the case of their death.

Do reservists lose coverage from their employer's group life policy while serving?

In most traditional group employer plans, once an employee no longer works a minimum number of hours per week, he or she becomes ineligible for group life benefits. Alternatively, the employee is given the right to convert any existing benefit amounts to an individual life policy offered by the employer. Further, as a reservist, the individual is automatically enrolled in the federal SGLI program (unless he or she actively declines coverage).

Many employers do provide a "policy continuation" for some period following the departure of an employee for active military duty. This period is often about three months, though some employers provide for continuation up to six months. Such continuation provisions address those situations where valuable employees must leave temporarily for duty but return relatively quickly. In cases of the Persian Gulf War (100 days) and the recent Afghani action, reservists might have benefited from such continuation provisions.

Are service members assigned to active duty responsible for paying premiums on their individual (private) life insurance polices?

Servicemembers should contact their life insurance company to find out if there are premium payment options available to them. In addition, servicemembers may be eligible for premium deferrals under the Soldiers and Sailors Civil Relief Act, and should check with their company and with the Department of Veterans Affairs for program details and application information.

DIRK KEMPTHORNE, PRESIDENT & CEO (bio and speeches)                                                                        © American Council of Life Insurers    
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