|
Unlike SGLI Life Insurance, most commercial life insurance policies contain a “war clause”. This clause excludes payment for death caused by civil uprising, military uprising, and military action to protect the country. When a person dies in the line of duty, the insurance company only has to pay back the premiums paid into the policy, a far cry from the value of the death benefit. There are a few exceptions, one, SGLI, is strictly for those in the military.
The cost of the insurance is $6.50 a month for $100,000 and the age of the participant doesn’t matter. There is an option to convert the policy to a permanent one after the participant leaves the service. There are presently 47 companies that accept conversion of the SGLI policy. If the severance with the military is due to disability the policy remains in force for two years with no payment necessary.
Servicemembers’ Group Life Insurance automatically gives coverage for $400,000 unless the member chooses different and files a form to reduce it by increments of $50,000 or eliminates it entirely. The coverage includes actions of war or uprising and accomplished by heavy subsidy provided by the government and management by the United States Department of Veteran Affairs. It is one of the benefits offered to the servicemen that few private companies offer.
If you decide that you don’t want coverage, file the forms and later realize that it was a great opportunity, you still can get it. The difference is that this time you must qualify for the coverage and answer the medial questions. If you have a medical condition, then there must be a review of the nature of that condition before the coverage takes effect. When you fill out the form SGLV 8285 requesting coverage you have to fill it out in front of an authorized representative from the same uniformed service that you belong. The representative then signs and certifies that they were witness and puts the form into your personnel file, unless it necessitates a review of a medical condition for a final decision.
If you’re a member of the National Guard or Ready Reserves also are eligible for coverage, if you qualify as active duty status. This means that you must be on orders that specify longer than 31 days. Any National Guard or Ready Reservist that required to perform active duty, whether for training or not at least 12 periods per year is also eligible. There is a provision for those that don’t qualify for full time status or the assignment is less than 31 days and the cost is $28 per year. It covers you when you are on active duty.
You have the right to name anyone the beneficiary of the policy but if you name someone other than a spouse or child, the Department of Defense notifies your spouse. You can change the beneficiary also, any time you want. If you change it to anyone other than your spouse or child, the Department of Defense also notifies your spouse.
You also have the right to select the method of payment. There are only two options, a lump sum and 36 equal monthly installments. The lump sum option is automatic and paid in a special interest bearing checking account called Alliance Accounts. This allows the beneficiary to write checks for necessary payments and not have to wait for a check to clear if it were in standard check form.
Congress realized that death from war was not as costly to the family as disability and trauma caused by war. They added TSGLI (Traumatic Servicemembers’ Group Life Insurance) to the package at the cost of $1 more each month. There is no ability to decline the coverage, but who would want to do that? For a mere $1 the military personnel gets coverage between $25,000 and $100, 000 to pay in the event they receive severe traumatic injury. In December, 2005 soldier’s saw the additional money removed and felt assured that they received coverage under this package. It doesn’t affect VA disability compensation but does affect CIP or Combat-related Injury Rehabilitation Pay. You can only have one of the two. A huge benefit of the TSGLI is that it comes in a lump sum, used at sole discretion of the soldier and is tax-free, like life insurance payments.
The SGLI insurance program is an outstanding benefit that only active military personnel can receive. The cost is minimal and the benefits to both the family and the soldier are great.
|