What Happens to Your SGLI After You Separate?
There aren’t a lot of times that young U.S. troops really think about life insurance while in the military. There are definitely more fun benefits of wearing the uniform and more fun things to do around the barracks at night.
What we do know is that we were automatically enrolled in Servicemembers' Group Life Insurance (SGLI) the day we put on the uniform, and that the premium came out of our paycheck. We never wrote a check or filled out an application, but the deduction came every month. It was just there, like an old acquaintance you didn’t really know. Or care to know.
As we get older and one day separate from the military, its finally leaves us. Except then we’re at an age where we might really want or need it, yet still forget to replace it. Sadly, SGLI doesn't follow veterans into civilian life. It is called Servicemembers’ Group Life Insurance, after all—and we’re suddenly not in the service anymore.
But there is a way forward.
More than 200,000 American troops transition to civilian life every year. A number of them walk out the door without understanding the life insurance coverage they took for granted for so long—or that they have a tiny window to get new coverage without proving their health is still worth the risk.
No matter when you get out (or got out), it’s time to learn what your options are and how to make the right call for your family.
When SGLI Ends
When you leave active duty, SGLI coverage continues for 120 days at no cost. The government picks up the premium during that all-important window. On day 121, it’s over. There’s no grace period, no automatic renewal, and no notifications to remind you the deadline has passed.
Unfortunately, life insurance also happens to be one of the easiest things to forget during transition, especially when you’re overwhelmed with more immediate needs: finding housing, employment, filing VA claims, and the dozen or so other financial problems looming over your suddenly employed life.
The fact of the matter is that, compared to everything else, life insurance just doesn't feel urgent until it is urgent and by then, if your coverage lapsed, it’s very expensive or difficult to get back.
The only exceptions this are those with a service-connected disability that leaves you totally unable to work at the time of separation. They have access to the SGLI Disability Extension, which provides up to two years of full, free SGLI coverage. All they have to do is apply before the standard 120-day free coverage expires (more on that later).
Converting to VGLI
Veterans' Group Life Insurance (VGLI) is term life insurance administered by the VA, and it’s the conversion option for SGLI. Its main advantage is that if you apply within 240 days of separation, it requires no medical underwriting. You can't be turned down for health conditions. Whatever you were dealing with, be it a service-connected injury, a chronic condition, a mental health diagnosis, whatever—none of it affects your eligibility for VGLI in that window.
After 240 days, you can still apply for VGLI through the full deadline of one year and 120 days from separation, but then you'll need to submit evidence of good health. After one year and 120 days, VGLI is no longer an option. Like, at all. You missed it. There’s no getting it back.
It’s good insurance, too. The maximum SGLI and VGLI coverage limits increased to $500,000 in March 2023. VGLI coverage is capped at the amount of SGLI you had when you left the military, though you can increase it by $25,000 at each five-year anniversary of your coverage, up to that $500,000 ceiling, until you turn 60.
VGLI Costs and Why It’s Expensive
VGLI is priced by age and coverage amount, with premiums stepping up every five years as you get older. In July 2025, the VA lowered VGLI premiums by 2% to 17% across all age brackets, a meaningful discount for the more than 5.6 million Americans currently enrolled. SGLI's premium dropped from 6 cents to 5 cents per $1,000 of coverage, reducing the maximum $500,000 policy to $25 a month plus $1 for traumatic injury protection.
What we’re saying is SGLI is a good deal for a group of people who do dangerous work in hazardous conditions… like say, military personnel. And VGLI is great because, while it might be more expensive than some civilian insurers, it might be the only insurance some vets can get.
Its age-based structure means VGLI gets significantly more expensive over time.A veteran under 30 pays $30 a month for $500,000 of coverage. By their 30s, that climbs to $40–$50. By their mid-40s, it's $95. By the their mid-50s, it's $250. In their early 60s, it's $425 a month. All for the same $500,000 policy.
A 45-year-old veteran carrying $400,000 of VGLI, the monthly premium is $76. The same coverage at age 65 costs $552. Term life insurance is considerably cheaper than VGLI as you get older—because private term rates stay level for the duration of the policy, while VGLI rates increase every five years.
We may not be selling you on how great it is at this point, but read on. A higher price point doesn't mean VGLI is the wrong choice. For some veterans, it's the only realistic one.
VGLI vs. Private Term Life Insurance
The TLDR version of this is that VGLI is valuable for veterans with health issues or those who act on life insurance much later in life. Private term is usually the better deal for healthy veterans under 45.
VGLI's defining advantage is that it doesn't care about your health, at least not right away (the 240 day window). Private term life insurance requires full medical underwriting: A healthy 30-year-old veteran who has never smoked can almost certainly find a 20-year term policy cheaper than VGLI rates.
A veteran with service-connected health conditions who wouldn't last long during an insurer’s underwriting process is in a very different position.
The real trick is to apply for VGLI within the 240-day window regardless of your health status. It costs nothing to apply, locks in your eligibility, and gives you coverage while you're still shopping. Meanwhile, you can always get quotes from private term life insurers.
If you're healthy and under 45, the private term policy will likely beat VGLI on cost over the life of the coverage and you can let the VGLI lapse without penalty. If you have health conditions that private insurers rate up or decline, however, VGLI is a pretty great safety net.
After age 50, the gap between VGLI and private term narrows considerably, because private term life insurance also gets expensive with age. VGLI also converts to whole life insurance at age 80, which is relevant for veterans who want lifelong coverage.
Family Coverage Ends, Too
Family Servicemembers' Group Life Insurance (FSGLI) covers a service member's spouse and dependent children, hence the name. Spousal coverage is available up to $100,000, and not to exceed the service member's own SGLI coverage amount. Children are insured at no cost.
That’s all well and good, but FSGLI ends when the service member’s SGLI end. And just like SGLI, spouses have 120 days from the FSGLI termination date to convert to an individual policy through any private insurer offering conversion policies, no medical exam required during that window. Children's coverage ends at age 18, or age 23 for full-time students.
All of this is easy to overlook when you're focused on your own coverage situation. But if your spouse has a health condition that would make individual life insurance difficult or expensive to obtain, don't let that 120-day conversion window close.
The Disability Extension
As we mentioned earlier, those who have a service-connected disability that prevents them from working at the time of separation, can opt for the SGLI Disability Extension, which provides up to two years of completely free life insurance at the full SGLI coverage amount.
Qualifying conditions include total loss of hearing in both ears, permanent loss of speech without artificial assistance, and permanent loss of use of both hands, feet, or eyes, as well as any total disability that prevents employment.
Vets can apply for the SGLI Disability Extension within two years of separation, but the smart move is (again) to apply before your 120-day free coverage window closes so you don't have a gap. When the extension ends, you'll be automatically enrolled in VGLI at the same coverage level. Veterans with significant service-connected conditions should apply for it as a matter of course.
How Much Coverage Does Your Family Actually Need?
You don’t need an insurance agent for this calculus. A standard rule of thumb in personal finance is to take 10 to 12 times your annual income in life insurance. At the very least, pop a zero onto the end of your salary.
But veterans with VA disability compensation and Survivor Benefit Plan elections should run different numbers. Calculate what your family would need to maintain their standard of living for 10 to 15 years without your income. Then subtract any guaranteed income they'd receive if you died (VA disability compensation ends at your death, but if you elected the Survivor Benefit Plan, your surviving spouse receives a monthly annuity).
The gap between your family's projected needs and their guaranteed income is what life insurance needs to cover. You’ll be dead, but your family will still be taken care of. They might even miss you.
A high-rating, permanent and total veteran who elected SBP may need significantly less life insurance than a civilian peer with equivalent income. A veteran without SBP who hasn't yet established VA benefits has a much larger gap to fill.
This is why it’s important to run the actual numbers for your household. You don't need the perfect long-term life insurance plan figured out before you separate. You just need to not let the windows close while you figure it out.
