fi nancialforum V
MOAA Publications MOAA Premium and Life members can find addi- tional information about Veterans’ Group Life Insurance by requesting
or downloading MOAA’s Benefits Planning Guide. Visit
www.moaa.org/ publications or contact MOAA’s Member Service Center at (800) 234- MOAA (6622).
Insurance Options
For those separating or retiring from military service, Veterans’ Group Life Insurance is one of many available insurance options. By Lt. Col. Shane Ostrom, USAF (Ret), CFP®
Veterans’ Group Life Insurance (VGLI) can replace Servicemembers’ Group Life Insurance when a service- member separates from the military. Ser- vicemembers typically learn about VGLI during transition classes, and enrollment in the plan is voluntary. Here are some program specifi cs for servicemembers nearing separation or retirement. If you already have VGLI, these points will refresh your memory on details worth repeating. The eligibility window to apply for VGLI is within the fi rst 16 months following mili- tary service. VGLI will accept you without a health screening if you apply within the fi rst 240 days (or seven months) of the end of your service. This is an important appli- cation detail to consider if you are separat- ing or retiring with health issues. Life insurance is a critical part of a family’s fi nancial plan. Commercial life insurance requires a health screening prior to approval. For someone with ill- nesses or disabilities as a result of mili- tary service, VGLI could be your only option for life insurance coverage (if you apply in the fi rst 240 days). Usually, pursuing commercial life in-
surance is your best option because you can fi nd a policy with a higher death ben- efi t and a smaller premium than VGLI. I’m thinking of term insurance with a level premium for an extended period of time. VGLI also is a form of term insurance, but the premium increases as you get older.
However, if you have health issues,
you should shop early for a commercial policy, fi nd the one right for your fam- ily, and apply to see whether you pass the health screening. Depending on the outcome, you will know whether a com- mercial policy will work or whether you need to rely on VGLI prior to day 240. VGLI monthly premiums increase every fi ve years once you turn 30 years old. VGLI with a death benefi t of $400,000 costs $40 a month at age 30 and by age 75 increases to $1,840 a month. VGLI participants can increase cover- age in $25,000 increments each fi ve-year period up to the maximum death ben- efi t of $400,000 prior to age 60 without proof of good health. There is an option to convert a VGLI policy to a commercial policy at any time — assuming health approval. You might want to consider this option before your VGLI premiums get too expensive. For additional details on this option, refer to the VA pamphlet on VGLI conversion at
http://bit.ly/2cHXNaI. As with anything, be sure to read the fi ne print. Eventually you might have to decide whether your death benefi t is worth the VGLI premium. Regardless, you’re cov- ered until you stop paying premiums.
MO
— Lt. Col. Shane Ostrom, USAF (Ret), is a CFP® and benefi ts information expert at MOAA. Visit
www.moaa.org/fi nancialcenter for other re- sources. Email specifi c benefi t and fi nance inqui- ries to
beninfo@moaa.org.
member benefit: MOAA offers several different types of insurance plans. Visit
www.moaainsurance.com. 44 MILITARY OFFICER NOVEMBER 2016
PHOTO: SEAN SHANAHAN
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