Premium Rates Drop for Popular SGLI and VGLI Policies, VA Announces

Active military personnel and veterans with life insurance policies that are managed by the Department of Veterans Affairs (VA) will see a price drop in their premiums, thanks to improved investment earnings and a reduction in non-combat claims. The cuts affect military personnel covered by Servicemembers' Group Life Insurance (SGLI) and veterans covered by the Veterans' Group Life Insurance (VGLI).

"The reduction in SGLI premiums makes life insurance even more affordable for today's men and women in uniform," said Dr. James B. Peake, Secretary of Veterans Affairs. "Lower VGLI premiums will allow more veterans to provide this low-cost financial security to their families."

The drop in premium prices takes effect on July 1. On that date, premiums for basic SGLI will drop 7 percent-from 7 cents to 6.5 cents per month for $1,000 of coverage.

Personnel with the maximum $400,000 of coverage will see their monthly premium reduced from $28 to $26. For one more dollar a month, they also can receive coverage against severe traumatic injury. VA officials believe this premium reduction will help maintain the nearly universal participation in the SGLI program.

VGLI provides renewable term policies for people after their discharges from the military. Veterans pay premiums according to their age for this coverage. Premium rates for this coverage will decline from 4 to 12 percent for veterans aged 30 to 64, who make up 85 percent of those insured under the program.

More than 2.4 million people currently participate in the VA-managed SGLI program, and 433,000 have VGLI coverage. Peake said those participation numbers may go up, given the premium reductions. In turn, the VA may be able to reduce rates again at some point.

Peake added, "With servicemembers putting their lives at risk against terrorism, life insurance coverage is more important than ever."