By Karen Jowers - Staff writer
Posted : Tuesday Apr 8, 2008 9:59:59 EDT
Troops will pay less for Servicemembers’ Group Life Insurance as of July 1, according to the Department of Veterans Affairs, which manages the program.
Monthly payments for the maximum coverage of $400,000 will decrease by $2, to $26 from $28. The additional $1 per month for severe traumatic injury coverage remains the same.
SGLI coverage is available in multiples of $50,000, up to the maximum of $400,000.
The change will not affect Family SGLI premiums, which decreased two years ago.
However, premiums for Veterans’ Group Life Insurance for veterans ages 30 to 64 will decrease from 4 percent to 12 percent, also July 1. That age group makes up about 85 percent of the population insured under the program, which is available for those who want to convert their policies from SGLI to VGLI after leaving service.
Officials said the VGLI premium rates for those under age 30 “are already competitive.”
VGLI rates vary by age of the policyholder. New rates and charts will be available on the VA’s insurance Web site in the near future, but information was not immediately available about when the site will be updated.
VGLI coverage is available in multiples of $10,000 up to the amount of SGLI coverage a service member had before separating.
SGLI premiums, currently 7 cents per $1,000 of coverage, will decrease to 6.5 cents per $1,000. The reduction is possible because claims for non-combat deaths have dropped, and investment earnings on money held in the program has increased, officials said.
The reduction in VGLI rates is a result of fewer claims being filed, they said.
“The reduction in SGLI premiums makes life insurance even more affordable for today’s men and women in uniform,” Veterans Affairs Secretary James Peake, said in a prepared statement. “Lower VGLI premiums will allow more veterans to provide this low-cost financial security to their families.”
SGLI rates increased two years ago from 6.5 cents to 7 cents per $1,000 because the amount of premiums being collected was not enough to cover the cost of peacetime claims. The cost of wartime SGLI claims is paid by the services, not through premiums paid by service members.
More than 2.4 million people participate in the SGLI program, and another 433,000 in VGLI.
Peake said the premium reductions should result in increased program participation, and with increased enrollment, VA may be able to reduce rates further in the future.