VA Reduces SGLI Premiums for Military and Family Coverage
By Sgt. 1st Class Doug Sample, USA
American Forces Press Service
WASHINGTON, April 10, 2003 The Department of Veterans Affairs has announced that premiums for the Service members Group Life Insurance will be reduced, handing military members a few extra dollars in their pockets each month.
Beginning in July, the cost for a $250,000 policy the maximum coverage -- will drop from $20 to $16.25 monthly, a $3.75 savings. The Department of Veterans Affairs reports that rates for Veterans Group Life Insurance will not change.
Tom Tower, DoD's assistant director for military compensation, welcomed the reduced premiums, adding that anytime you put "more money in the pockets of military members, it's always a good result."
Premiums will also be reduced for SGLI family coverage, with rates varying among age groups.
The largest saving will go to spouses between 35 and 39 years old, whose premiums will be nearly cut in half. Service members currently pay $13.00 for a $100,000 family policy. That policy will cost $7.50 beginning in July a $5.50 savings.
The reduced rates means a military family will save an average of $100 a year. The VA estimates that service members collectively will save about $96 million annually in premiums, and $42 million in family coverage premiums each year.
Tower said the reduced premiums are a result of an ongoing process to keep costs down for military members.
"The VA regularly checks to see how much is paid out versus how much is collected in premiums, and whenever it seems like they have built up premium reserves, they like to reduce premiums to keep the cost to a minimum for the member," Tower said. "Its part of the objective of the program: to provide the lowest cost possible."
SGLI began in 1965 to meet the insurance needs of Vietnam- era service members. Before SGLI, the military provided $10,000 policies to service members, and policies were available to active-duty military only.
Today the SGLI program provides coverage of $250,000 to active duty service members and most Reservists. Coverage of $100,000 has also been provided for spouses of participating members with free coverage of $10,000 for dependent children. Reduced levels of coverage may also be elected.
Information about the change in SGLI premiums can be found at www.insurance.va.gov, or call the Office of Servicemembers Group Life Insurance toll-free at 1-800-419- 1473.