Will life insurance cover a military death?
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UPDATED: Dec 21, 2011
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The Servicemembers’ Group Life Insurance, commonly known as SGLI, does cover a military death, but many private life insurance companies do not. When making a decision regarding life insurance, members of the military should be careful to read the small print. If it is important to them to have their life covered in the case of death from an act of war, they should ensure that the proposed policy meets their needs. Failure to do so will only cause extra stress and confusion to their loved ones in the event of tragedy.
How does SGLI work and does it cover a military death?
Servicemembers’ Group Life Insurance is offered by the United States’ Department of Veteran Affairs as an option for all members of the American military. Usually, once an individual enrolls in the Uniformed Services, they are automatically provided with the protection offered by SGLI. It covers its members for up to $400,000 and offers a reasonably priced premium of 6.5 cents for every $1,000 of coverage. This premium is often taken out of the wages of the insured. If an individual does not wish to be covered by SGLI, they can request in writing that it be cancelled or reduced by $50,000 at a time. You can choose to pay for only as much insurance as you anticipate you might need in the case of accident, injury, illness or death. SGLI is a program based on group membership and is available to everyone involved in the U.S. military, including:
- National Guard members
- Those on active duty
- Commissioned members of the Corps of the National Oceanic and Atmospheric Administration and Public Health Service
- Those in the ready reserve
- Midshipmen and cadets in the service academies
- Reserve Officer Training Corps members
As well as covering death in an act of war, SGLI also includes Traumatic Injury Protection. This means that, if a service member receives traumatic injuries leading to financial loss, they will be given between $25,000 and $100,000 to enable family members and/or caregivers to look after them while they return to a state of health. This benefit, added to SGLI relatively recently, is another one not always offered by private insurance companies.
Once a military member has left the Reserve Corps or is no longer performing active duty, they are able to convert their SGLI to Veterans’ Group Life Insurance, or VGLI. Alternately, they can change to a program offered by a private life insurance company.
SGLI is a program designed to meet the particular needs presented by life in the military, especially cover in the case of death during combat and financial assistance in the case of traumatic injury. However, it may not be suited to military members who would require more than $400,000 in compensation in the case of death, as this amount exceeds the maximum coverage offered.
Why do so many private companies have a war exclusion clause on their life insurance policies?
The coverage limited presented by SGLI leads some service members to grow curious about other options when it comes to life insurance. As previously stated, many life insurance policies offered by private companies do not meet the needs peculiar to the military. This is fundamentally because their policies include a war exclusion clause. This states that the insurance company will not cover their fatality, if the insured party dies as the result of an act of war or a war-related event, such as:
- Military coup
- Insurrection or revolution
This kind of clause was originally introduced to stop insurance companies from facing bankruptcy during wars or related tragedies that occur on a vast scale. In the case of huge casualty rates, insurance companies would simply not be able to afford the payouts incurred. Some insurance companies, because they do not pay compensation when death occurs during combat, will refund the premiums paid by the insured to the nominated beneficiary.
Is it possible to supplement SGLI?
One option available to military members who are not satisfied with the terms of SGLI, but still need coverage in the case of death during combat, is to pay for a supplement. They can keep their SGLI and add to it. Many individuals choose to find appropriate coverage for their partner’s life, particularly if dependents are involved. This gives them the chance to provide for their children, should their partner pass away.
Many websites enable users to compare and contrast available private life insurance policies at a few clicks of the mouse. However, quite often, it is not so easy to compare and contrast exclusions and clauses. Quick comparison tools are very useful but it is essential that military members check that the policies offered meet their needs before making a commitment.
Military life can often be chaotic and orders for deployment are sometimes made unexpectedly and quickly. It is important that this does not cause a poor decision when it comes to purchasing life insurance. This will only cause heartache and difficulty for family and friends already facing the trauma and grief of losing a loved one.
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