Military Life Insurance (MLI) Eligibility and Coverage
Military Life Insurance (MLI) provides financial protection for service members and their families. After retirement, veterans may continue their MLI coverage under certain conditions.
Eligibility Requirements
Retirees who meet the following criteria are eligible for MLI coverage:
- Retired from active duty with 20 or more years of service
- Retired from the Reserves or National Guard with 20 or more qualifying years of service
- Receiving retired pay
Types of MLI Coverage
Retirees can choose from two types of MLI coverage:
- Regular MLI: Provides coverage up to $400,000
- Supplemental MLI (SGLI): Provides additional coverage up to $100,000
Maximum Coverage Amounts and Premiums
The maximum coverage amount for Regular MLI is $400,000. The premium for Regular MLI is based on the retiree’s age and coverage amount. The maximum coverage amount for SGLI is $100,000. The premium for SGLI is a flat rate of $27 per month.
Benefits of MLI Coverage
Maintaining Military Life Insurance (MLI) coverage after retirement offers substantial financial benefits. MLI provides peace of mind and financial security for beneficiaries, ensuring their well-being in the event of the insured’s passing.
The financial benefits of MLI coverage include:
- Tax-free death benefit to beneficiaries
- Affordable premiums, especially for younger retirees
- Guaranteed coverage regardless of health conditions
- Option to increase coverage as needed
Peace of Mind and Financial Security
MLI provides peace of mind for retirees by ensuring that their loved ones will be financially secure in the event of their passing. The tax-free death benefit can cover expenses such as funeral costs, outstanding debts, and mortgage payments, providing financial stability for beneficiaries during a difficult time.
Examples of MLI Benefits
Many retirees have benefited from maintaining MLI coverage. For example, one retiree used the death benefit to pay off his mortgage, ensuring that his wife could continue living in their home without financial worries. Another retiree used the benefit to fund his grandchildren’s education, providing them with a brighter future.
Options for Maintaining MLI Coverage
Upon retirement, service members have several options to maintain their life insurance coverage. These options include the Servicemembers’ Group Life Insurance (SGLI), Veterans’ Group Life Insurance (VGLI), and commercial life insurance.
Servicemembers’ Group Life Insurance (SGLI)
SGLI is a low-cost group life insurance program available to active-duty service members, reservists, and members of the National Guard. Coverage is automatic for active-duty members, but reservists and National Guard members must enroll. Coverage can be continued after retirement for up to 120 days.
Pros:
– Low cost
– Automatic coverage for active-duty members
– Guaranteed issue, regardless of health
Cons:
– Limited coverage amount ($400,000)
– Coverage ends after 120 days of retirement
– No additional benefits
Veterans’ Group Life Insurance (VGLI)
VGLI is a group life insurance program available to veterans who have separated from service with an honorable discharge. Coverage can be continued for up to five years after separation.
Pros:
– Low cost
– Guaranteed issue, regardless of health
– Coverage can be continued for up to five years after separation
Cons:
– Limited coverage amount ($400,000)
– Coverage ends after five years of separation
– No additional benefits
Commercial Life Insurance
Commercial life insurance is a private insurance policy that can be purchased from a life insurance company. This option offers greater flexibility and customization than SGLI or VGLI, but it also comes with a higher cost.
Pros:
– Customizable coverage amounts
– Variety of policy options and riders
– Coverage can be continued indefinitely
Cons:
– Higher cost
– May require medical underwriting
– No guaranteed issue
Factors to Consider When Choosing an MLI Option
When selecting an MLI option after retirement, retirees should carefully evaluate several key factors to make an informed decision that aligns with their financial situation and insurance needs. These factors include:
Premium Costs
Premiums for MLI vary depending on the coverage amount, the type of policy chosen, and the retiree’s age and health status. Retirees should consider their monthly budget and ensure that they can afford the premiums without straining their finances.
Coverage Amount
The coverage amount should be sufficient to meet the retiree’s financial obligations and provide for their loved ones in the event of their death. Retirees should consider their income, assets, debts, and family size when determining the appropriate coverage amount.
Type of Policy
MLI offers two main types of policies: term life insurance and whole life insurance. Term life insurance provides coverage for a specific period of time, while whole life insurance provides coverage for the retiree’s entire life. Retirees should choose the type of policy that best meets their individual needs and financial goals.
Health Status
Retirees’ health status can impact their MLI premiums and coverage options. Those with pre-existing conditions may have to pay higher premiums or may be ineligible for certain types of coverage. Retirees should be honest about their health status when applying for MLI to ensure they receive the most accurate quotes and coverage options.
Financial Goals
Retirees should consider their overall financial goals when choosing an MLI option. If they plan to use MLI as a supplement to their retirement savings, they may want to choose a policy with a lower coverage amount and lower premiums. If they need MLI to provide significant financial protection for their family, they may want to choose a policy with a higher coverage amount and higher premiums.
Resources for Retirees
Retirees seeking information about Military Life Insurance (MLI) coverage have access to various resources. These include:
Online Resources
- Department of Veterans Affairs (VA) website: https://www.va.gov/life-insurance/
- Social Security Administration (SSA) website: https://www.ssa.gov/benefits/survivors/
- Military OneSource: https://www.militaryonesource.mil/financial-legal/personal-finance/insurance/
Contact Information
- VA Insurance Center: 1-800-827-1000
- SSA: 1-800-772-1213
- Insurance Providers: Contact information can be found on their websites or through insurance agents.
- Financial Advisors: Contact information can be found through financial planning organizations or online directories.
