Military Life Insurance: Should You Supplement SGLI With Personal Coverage?

At the beginning of your military career, you may not have accounted for major life events. That's why life insurance shouldn’t be something you review once and forget about. It's something worth revisiting as your life changes.

For many service members, life insurance starts with Servicemembers’ Group Life Insurance (SGLI). If you're eligible, you're automatically enrolled in $500,000 of coverage, which disburses in $50,000 increments. If you want less coverage, you can reduce it in $50,000 increments or decline it entirely. The full coverage amount costs $25 per month, plus $1 per month for Traumatic Injury Protection coverage. Additionally, Family SGLI (FSGLI) provides up to $100,000 for a spouse, capped at the service member's SGLI coverage, and $10,000 for each dependent.

For many military families, SGLI is a strong starting point, but it may not be the only coverage worth considering.

Does SGLI Provide the Right Amount of Coverage?

SGLI offers a significant amount of coverage at a low cost, but whether it’s enough depends on your family’s unique needs, financial obligations and long-term goals. So, is $500,000 enough to meet your family's needs if you pass away? Consider what the benefit would need to cover, how long your family would need support and what other resources would be available. Compare those anticipated needs with the SGLI benefit and any savings, existing life insurance or other resources available to your family.

The table below shows a hypothetical example of common survivor expenses and how far $500,000 may go toward meeting those needs.

Bear in mind, these are average household costs, and your family’s actual expenses may be higher or lower. The example also does not account for income replacement, which can significantly increase coverage needs. For example, replacing $60,000 in annual income for 10 years would require $600,000 before accounting for inflation or other financial resources. That need alone would exceed the maximum SGLI benefit, without accounting for housing, debt, education or final expenses. Life insurance should be based on what your family needs.

How Private Life Insurance Differs From SGLI

Unlike SGLI, private life insurance is purchased separately and is not tied to military service. It can supplement SGLI while you’re serving and remain in place after you leave the military, subject to the policy’s terms. Private policies may also offer coverage beyond SGLI’s $500,000 limit and include term or permanent coverage options. Eligibility and premiums may depend on factors such as your age, health, coverage amount and policy type.

How Much Life Insurance Do Young Military Families Need?

A common rule of thumb is to carry life insurance equal to several times your annual income, but that approach doesn't account for every family's needs. Military families may also need to account for caregiving responsibilities, housing costs, children, education goals, debt or a future transition out of the military.

Consider what your family’s financial picture might look like. Would it need to:

• Replace your income for a period of time?
• Help keep your spouse or children in the home?
• Pay for childcare, college costs, final expenses or other major obligations?

Looking at those needs one by one can give you a more realistic number than relying on a rule of thumb.

Supplementing SGLI Coverage With Private Insurance

If SGLI may not cover everything your family would need, private life insurance may be worth considering as a supplement. The goal is not necessarily about replacing SGLI but matching coverage to your family’s needs and how long those needs are expected to last.

For example, term life insurance may make sense for temporary needs, like covering a mortgage, childcare costs or college expenses during a specific period. Permanent coverage, such as whole life insurance, may be better suited for longer-term needs, such as final expenses or support needed beyond a defined term.

Starting with what you need the insurance for can make it easier to compare your existing options and decide what type of coverage may help meet that need.

Private Life Insurance vs. VGLI After the Military

Life insurance planning also changes as you get closer to separation or retirement. When you leave the military, SGLI does not continue. Veterans’ Group Life Insurance (VGLI) allows eligible service members to continue coverage after service without medical underwriting, with premiums that increase as you age. For a breakdown in premium increase over time, look at the chart below. 

VGLI may help some veterans, especially if health concerns make private coverage harder to qualify for or more expensive. But it is not the only option to consider. If you’re in good health, you may be able to secure comparable term coverage for less or purchase a permanent policy that locks in your premium based on your age when the policy is issued. Costs vary based on age, health status, underwriting outcomes, coverage amount and policy type.

Neither option is automatically better. As you transition out of the military, compare costs, coverage duration and how each option fits your family's financial plan.

What’s the Best Time To Consider Private Insurance?

In general, life insurance tends to be more affordable when you're younger and in good health. One reason is that younger, healthier individuals are often viewed as having lower mortality risk, which can result in lower premiums, depending on the policy and underwriting factors.

Because of that, you don’t have to wait until separation or retirement to consider private coverage. Exploring your options while you're on active duty may give you more choices, help protect your family while you serve and reduce the likelihood that a future health condition could limit your eligibility or increase your costs.

It’s also important to review your coverage after major life changes, such as marriage, divorce, having children, buying a home or taking on new financial responsibilities. These events can change what your family would need if your income were no longer available, making it worth revisiting your coverage.

Reviewing your coverage with a First Command Financial Advisor who understands military life and benefits can help you evaluate whether your current plan still fits your long-term goals.

Frequently Asked Questions

Can active-duty service members buy private life insurance?

Yes. Active-duty service members can buy private life insurance in addition to SGLI. A private policy may help supplement your existing coverage, but costs, eligibility and policy terms will vary based on factors like your age, health, coverage amount and the type of policy you choose.

What happens to my SGLI coverage when I separate from the military?

Eligible service members generally receive 120 days of free coverage after separation. You can also convert SGLI to VGLI if you apply within the required timeframe. If you apply within 240 days after separation, you generally do not need to provide proof of good health. After that, you may still be able to apply for up to 1 year and 120 days after separation but will need to prove you are insurable by answering health questions.

Can I replace my SGLI entirely with private life insurance while active duty?

Yes. You can reduce or decline SGLI coverage but replacing it entirely with private life insurance may not make sense for every service member. SGLI is designed for military service and generally offers low-cost term coverage to eligible service members. Private policies can offer different coverage amounts, terms and long-term planning features, but they may also involve underwriting, different costs or exclusions. Before making changes, compare both options carefully and consider whether your family will still have enough coverage in place.