Veterans Life Insurance
Prior to making a transition from military service, it is important to make arrangements for adequate health care insurance for you and your family. Bills for medical care can be devastating without insurance. The following is a summary of veterans life insurance and what you need to know:
- Status of Life Insurance Programs
- Dividends Can Increase Total Insurance
- Reinstatement of Lapsed Insurance
- Automatic Renewal
- Modified Life
- Guaranteed Permanent Plan Policy Values
- Policy Loans
- Waivers for Total or Permanent Disability
- Total Disability Income Provision (TDIP)
The Department of the Veteran Affairs (VA) is responsible for ensuring you receive the care and support you earned with your military service. Through the VA, you may be eligible for medical care, disability compensation, and insurance. The VA has a national toll-free telephone number which connects callers to the nearest regional office; it is (800) 827-1000.
It is recommended that members schedule a physical about 120 days prior to separating from service as this may be the basis for future disability compensation claims. Additionally, it is a good idea to get a certified copy of your medical records prior to separation.
|Program||Beginning Date||Ending Date for New Issues||Policy Letter Prefix|
|U.S. Government (USGLI)||May 1919||April 24, 1951||K|
|National Service (NSLI)||Oct. 8, 1940||April 24, 1951||V, H|
|Veterans Special (VSLI)||April 25,1951||Dec. 31, 1956||RS, W|
|Service Disabled (SDLI)||April 25,1951||Still Open||RH|
|Veterans Reopened (VRI)||May 1, 1965||May 2, 1966||J, JR, JS|
|Servicemen's Group (SGLI)||Sept. 29,1965||Still Open|
|Veterans Mortgage (VMLI)||Aug. 11, 1971||Still Open|
|Veterans' Group (VGLI)||Aug. 1, 1974||Still Open|
Since July 1, 1972, the maximum amount of government life insurance, exclusive of SGLI, VGLI and VMLI, can be increased from a ceiling of $10,000. Policyholders with WWII National Service Life Insurance (V) can use their dividends to purchase additional paid-up coverage, permitting insureds to have more than $10,000 coverage. Policyholders with Veterans Special Life Insurance (RS, W) and Veterans Reopened Insurance (J JR, JS) also can purchase additions to coverage.
Lapsed term policies may be reinstated within five years from the date of lapse. However, NSLI on the Limited Convertible Term Plan (Policy prefix W) may not be reinstated if the term insurance expired after the policyholder's 50th birthday. Lapsed permanent plan policies may be reinstated at any time except that "J" and "JR" policies must be reinstated within five years from date of lapse, and an endowment plan must be reinstated within the endowment period.
Visit the Military.com Insurance Center to get information, advice, tips and to learn more about your life, auto, renters, and long-term care insurance options.
A five-year term policy which is not lapsed at the end of the term period is automatically renewed for an additional five-year period. The exception is the NSLI Limited Convertible Term Plan (policy prefix W) which may be converted to a permanent plan, but cannot be renewed after the insured's 50th birthday. The premium rate for each renewal is based on the attained age of the insured, except "V" and "RS" prefixed policies renewed beyond age 70. The rate on these policies is based on the age 70 renewal rate, with no further increases occurring over the remaining life of the contract.
Any term policy which is in force may be converted to a permanent plan if requirements are met. NSLI policyholders, however, are not eligible to convert to an endowment plan while totally disabled. Upon reaching renewal at age 70 or older, NSLI "V" and "RS" terrn policies on total disability premium waiver are automatically converted to a permanent plan of insurance which provides cash and loan value as well as higher annual dividends.
A "modified life at age 65" plan of insurance is available to NSLI policyholders. The comparatively low premium rates for this plan remain the same throughout the premium-paying period, while the face value reduces by 50 percent at age 65. The reduced amount may be replaced with a "special ordinary life" plan, for an additional premium. In 1972, a "modified life at age 70" plan became available, which is like the modified life at age 65 plan except that face value reduction does not occur until age 70. The premium rate is only slightly higher than for the modified life at age 65 plan.
Dividends are paid to holders of "K," "V," "RS," "W," "J," "JR," and "JS" insurance on the policy anniversary date. Dividends are not paid to holders of "H" or "RH" policies, or to those insured under SGLI, VMLI and VGLI. The Internal Revenue Service has announced that interest on insurance dividends left on deposit with VA is not taxable. For details on this ruling contact the IRS.
When a permanent plan policy has had premiums paid or waived for at least one year, and it is not lapsed, the guaranteed values include cash surrender, loan and reduced paid-up provisions. If a permanent plan policy lapses after being in force for at least three months, it will automatically be extended as term insurance. The period of this protection is determined by the net cash value of the policy. The amount of extended coverage is the face value less any indebtedness.
Policyholders may borrow up to 94 percent of the cash surrender value of their permanent plan on insurance and continue the insurance in force by payment of premiums. All NSLI policy loans applied for on and after Nov. 2, 1987, are charged interest at an adjustable rate which is adjusted each Oct. 1. Changes to the adjustable loan interest rate are tied to the 10-year U.S. Treasury securities index. The annual interest charged on adjustable-rate loans will not go higher than 12 percent or lower than 5 percent. The interest rates on United States Government Life Insurance (USGLI) policy loans and existing fixed rate NSLI policy loans will remain unchanged. Interest on policy loans is compounded annually. The current interest rate may be obtained at any VA office, or by calling the toll-free number, 1-800-669-8477.
NSLI policyholders who become totally disabled before their 65th birthday and are likely to remain so for six or more months should consult VA about their entitlement to premium waiver. USGLI policyholders who become totally and permanently disabled should consult VA about receiving the proceeds of their policies in monthly payments.
Full information about adding the TDIP rider to a policy is available from the VA Regional Office and Insurance Center which maintains the veteran's insurance records, or the nearest VA office. The provision currently provides that an NSLI policyholder will be paid $10 per month, per $1,000 insurance, after being totally disabled for six consecutive months. A few older riders pay $5 per month. In either instance, disability must have commenced before the insured reached the 60th or 65th birthday, depending upon the insurance. USGLI policies also carry a TDIP provision. The amount of the monthly payment, however, differs from that paid to NSLI policyholders. TDIP payments do not reduce the face value of the policy. TDIP is not available for policies with the prefix "RH," "JR" or "JS."