VA Implements Insurance Program Improvements
National Guard Bureau
WASHINGTON, Jan. 24, 1997 Thousands of Retired Reserve policyholders who carry Servicemembers' Group Life Insurance will be affected by a program merger early this year according to the Department of Veterans Affairs.
Legislation signed into law last October eliminated the Retired Reserve SGLI program. Effective Jan. 6, all of these policies have been exchanged for policies under the Veterans' Group Life Insurance program.
In addition, for the first time, VGLI has been extended generally to reserve component members who decide to separate prior to reaching 20-year retirement.
VA supported these changes to provide reserve component members parity with active duty members. The eligibility of reservists for coverage will benefit the entire VGLI program by expanding the pool of eligibles, thus lowering premiums, a VA official said.
The expansion of VGLI eligibility is among several insurance program changes under the Veterans Benefits Improvements Act. It authorizes conversion of VGLI policies to commercial life insurance at any time instead of awaiting the end of every five-year coverage period, and it allows retired reservists to retain lifetime coverage under VGLI instead of being cut off from coverage at age 61 or when receiving retired pay, as was the case with Retired Reserve SGLI.
The new law also changed the program name from "Servicemen's" to "Servicemembers'" Group Life Insurance.
The program merger affects an estimated 14,000 retired reservists who hold about $1 billion in insurance coverage and who, in converting to VGLI, join 350,000 other veterans holding about $29 billion in coverage.
Because VGLI is available only in increments of $10,000, amounts of insurance may change for those in the Retired Reserve SGLI program whose insured amount is not evenly divisible by $10,000. They will be notified that their coverage will be automatically rounded up to the next $10,000 increment unless they contact the Office of Servicemembers' Group Life Insurance to request their coverage be reduced to a lower, evenly divisible amount. Premiums will change correspondingly.
Those members with Retired Reserve SGLI policies that expired because they began receiving retired pay or reached the age of 61 prior to Oct. 9, 1996, will not be eligible for VGLI.
For those whose policies are converted, in addition to lifetime coverage, benefits will include a longer reinstatement period of five years after a policy has lapsed instead of three, as well as several new premium payment options, notably the use of automatic payments by deductions from VA benefits or retirement checks and an option to take a one-month discount for annual payments.
For more information and application forms, call the Office of Servicemembers' Group Life Insurance at (800) 419-1473.
The 2.6 million veterans covered by VA's National Service Life Insurance and other VA programs are unaffected by the changes. Questions pertaining to those programs may be directed to (800) 669-8477.