The Veterans’ Group Life Insurance (VGLI) is a program that allows veterans to continue the Servicemembers’ Group Life Insurance (SGLI) after they separate from service. If you're a veteran or will soon separate from service, should you participate? The answer is probably no. Read this article to find out why and learn how you can potentially save hundreds of thousands of dollars by buying your life insurance elsewhere.

1. Source: http://www.benefits.va.gov/insurance/vgli_rates_new.asp
The cost and availability of life insurance depends on such factors as age, health, and the type, and amount of insurance purchased. Before implementing a strategy involving life insurance,
it would be prudent to make sure that you are insurable by having the policy approved prior to cancelling or changing an existing one. Death benefits are subject to the claims paying ability
of the issuing insurance company.
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JAMES GROH, MBA, FINANCIAL PROFESSIONAL
jgroh@riversidesecurities.com | 210-970-5871
8620 N. New Braunfels Ave., Suite 102 | San Antonio,TX 78217
www.riversidesecurities.com/san-antonio-branch/james-groh
Securities and investment advisory services are provided through NEXT Financial Group, Inc.
Riverside Securities is not an affiliate of NEXT Financial Group, Inc. Neither NEXT Financial Group, Inc. nor its Representatives give tax advice.
Interested in Insurance, Investments, or Financial Planning? Call or Email Me for a Complimentary Analysis of Your Specific Situation.
The Veterans’ Group Life Insurance (VGLI) is a program that allows veterans to continue the Servicemembers’ Group Life Insurance
(SGLI) after they separate from service. It is an increasing premium term policy.There are two parts of that statement to unravel:
1.Term. Term life insurance policies are simple.As long as you pay the premium you are covered. If you die while covered, then your
beneficiary receives the death benefit.Term life insurance policies do not accumulate cash value, provide long-term care coverage, or
have any riders associated with permanent insurance.
2. Increasing Premium. The premium will get progressively more expensive as you get older.The maximum death benefit you can
purchase in the VGLI is $400,000.The table below shows the monthly premium rates for this death benefit, according to the
VGLI website .
WHAT IS THE VETERANS’ GROUP LIFE INSURANCE (VGLI)
AND SHOULD I PARTICIPATE?
$400,000 $32.00 $40.00 $52.00 $68.00 $88.00 $144.00 $268.00 $432.00 $600.00 $920.00 $1,840.00
Amount of
Insurance
Age 29
& Below
Age
30-34
Age
35-39
Age
40-44
Age
45-49
Age
50-54
Age
55-59
Age
60-64
Age
65-69
Age
70-74
Age 75
& Over
Participating in the VGLI is a poor decision for many veterans and they should instead obtain commercial life insurance policies. Case
in point, I recently secured a 30 year level term insurance policy with a death benefit of $400,000 for a 47 year old male veteran. His
annual premium for the next 30 years is guaranteed to be $1,152. He could have initially save $96 per year by opting for the VGLI but
starting at age 50 he would have paid an additional $576 more per year with the VGLI and that number would have gotten bigger as
he got older.You can use the table above to calculate the cumulative cost of the VGLI over the next 30 years for my client.While his
cumulative cost with the VGLI would have been $189,168, his cumulative cost with his commercial life insurance policy will be
$34,560, resulting in savings of $154,608. Moreover, the premiums of the VGLI can be increased, so there is no guarantee the table
above will be accurate for the next 30 years.This is a single case and everyone’s situation is unique, but this example shows how
veterans can save a lot money by buying commercial life insurance.
The one positive of the VGLI system is that if you apply for coverage within 240 days of your date of separation, then you will not need
to answer health questions. Most commercial life insurance policies require medical underwriting. I strongly encourage all veterans
investigate the possibility of purchasing life insurance from an insurance company.You never know if you qualify until you try, and
trying could save you a lot of money.
The easiest way to ensure you get an inexpensive policy is to allow an independent financial advisor like myself to shop the market for
you. I am not a captive agent who only represents a single insurance company. I am an independent agent who can use any life
insurance company so I can find you the best deal.There is no cost for this service.
SHOULD I PARTICIPATE IN THE VGLI?
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