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CHAPTER 10. Family Coverage

10.01 GENERAL
10.02 PERSONS ELIGIBLE TO BE INSURED
10.03 EFFECTIVE DATE
10.04 COST
10.05 TERMINATION
10.06 REDUCTION AND CANCELLATION
10.07 REQUEST FOR COVERAGE
10.08 ACCELERATED BENEFITS OPTION
10.09 CONVERSION
10.10 CLAIMS
10.11 LEGISLATIVE HISTORY

 10.01. GENERAL

a. Family Servicemembers' Group Life Insurance (FSGLI) is a program extended to the spouses and unmarried dependent children of members insured under the SGLI program. FSGLI provides up to a maximum of $100,000 of insurance coverage for spouses, not to exceed the amount of SGLI the insured member has in force, and $10,000 for dependent children. Spousal coverage is issued in increments of $10,000.

b. FSGLI coverage is provided under a group life insurance policy purchased from a commercial life insurance company by VA. FSGLI is administered by the OSGLI (see paragraph 1.01b for address) and is supervised by VA.

c. FSGLI provides life insurance protection only. It does not provide disability or other supplementary benefits. In addition, FSGLI has no cash, loan, paid-up or extended insurance values and does not pay dividends.

d. Service members with FSGLI coverage have access to up to 50% of the face value of the spousal coverage through the Accelerated Benefits Option (ABO). In order to qualify for the ABO, the spouse must have a medical prognosis of life expectancy of nine months or less. Only the Servicemember can apply for accelerated benefits and the benefit will be paid only to the Servicemember.

e. If an insured member declines Family coverage for a spouse or elects an amount less than the maximum amount available, the member may later apply for coverage or an increase in coverage up to the $100,000 maximum, or the amount of SGLI held by the insured member, whichever is less. Proof of spouse insurability (proof of good health) will be required in these cases.

f. FSGLI is a Servicemembers' benefit, and the member is the beneficiary of the policy.

g. A Servicemember married to another Servicemember can be insured under both the FSGLI and SGLI programs at the same time, for a maximum coverage amount of $500,000.

 10.02 PERSONS ELIGIBLE TO BE INSURED

a. Persons eligible to be insured in the FSGLI program are the current spouses and the dependent children of Servicemembers covered under the SGLI program who are

(1) serving full time on active duty

     or

(2) serving as a Ready Reservist or National Guard member who, under the law, is eligible for full-time SGLI coverage.

Note: Persons who are on active duty for training or inactive duty for training are not eligible for the FSGLI program.

b. Dependent children are defined as follows:

(1) All unmarried natural born children and legally adopted children under the age of 18
(2) All unmarried stepchildren under the age of 18 who are members of the Servicemembers household.
(3) Any unmarried dependent child who, after attaining the age of 18 and until completion of education or training (but not after attaining the age of 23), is pursuing a course of instruction at an approved educational institution.
(4) Any unmarried dependent child who has been declared permanently incapable of self-support before the age of 18.

 10.03 EFFECTIVE DATE OF INSURANCE

a. Spousal coverage will be effective as follows:

For members who... Spousal coverage will be effective...
are married on the date of entry on duty (active, Ready Reserve or National Guard), the date of entry on duty.
marry while on duty (active, Ready Reserve or National Guard), the date of the marriage.
previously elected to have their spouse insured for less than the maximum amount, the date an application electing to increase FSGLI spousal coverage is received by the members branch of service, provided the spouse meets good health requirements;
OR
if the application was forwarded to OSGLI for review, the date the application was received by the service. However, premium deductions will not begin until OSGLI has approved the application.
have applied and been approved for SGLI coverage after previously declining coverage, the date an application electing to increase FSGLI spousal coverage is received by the members branch of service, provided the spouse meets good health requirements;
OR
if the application was forwarded to OSGLI for review, the date the application was received by the service. However, premium deductions will not begin until OSGLI has approved the application.
Have applied and been approved for an increase in SGLI coverage that entitles them to an increase in FSGLI coverage, the date an application electing to increase FSGLI spousal coverage is received by the members branch of service, provided the spouse meets good health requirements;
OR
if the application was forwarded to OSGLI for review, the date the application was received by the service. However, premium deductions will not begin until OSGLI has approved the application.


b. Dependent child coverage will be effective as follows:

For children who... Coverage will be effective...
are dependents of the member when the member enters on duty (active, Ready Reserve or National Guard), the date of entry on duty.
are born or legally adopted while the member is on duty (active, Ready Reserve or National Guard), the date of birth or date of adoption.
become stepchildren due to a member's marriage while the member is on duty (active, Ready Reserve or National Guard), the date a stepchild begins living in the member's household.


(1) If the member had previously declined SGLI coverage, dependent children are automatically insured on the date an application to elect SGLI coverage is received by the uniformed service, provided the member meets good health requirements. If the application is forwarded to OSGLI for review, dependent children are insured on the date the application is approved by OSGLI.

 

 10.04 COST OF INSURANCE

a. For all members entitled to SGLI coverage, the necessary amount will be deducted from the member's service pay or otherwise collected from the member by the uniformed service.

b. Coverage for dependent children is provided at no cost to the member.

c. Spousal premiums are based on the age of the spouse and the amount of coverage. (See Appendix C for the current FSGLI Premium Rate Table.) Premiums will increase as the spouse reaches each successive age bracket.

 10.05 TERMINATION OF INSURANCE

a. FSGLI coverage for both spouses and dependent children will terminate 120 days after the member separates from service.

 10.06 REDUCTION AND CANCELLATION OF INSURANCE

a. Spousal Coverage- an insured Servicemember may elect to reduce or cancel spousal coverage at any time. If the member elects to reduce the amount of spousal coverage, the reduced amount of coverage will remain in effect until coverage is canceled or a request for an increase in coverage is made. Where spouse coverage is canceled, it will terminate as follows:

(1) 120 days after the date of an election made in writing by the member to terminate the coverage or;

(2) the earliest of either:

(a) 120 days after the date of the member's death;
(b) 120 days after the date the member's SGLI coverage terminates (see Chapter 2);
(c) 120 days after the termination of the marriage.

b. Dependent Child Coverage - Dependent child coverage may not be reduced for any reason while the Servicemember is insured. Dependent child coverage automatically terminates when the insured member is no longer insured or when the dependent child no longer qualifies as a dependent under paragraph 10.02 above. Where dependent child coverage is terminated it will terminate as follows:

The earliest of either:

(1) 120 days after the date of the member's death;
(2) 120 days after the date the member's SGLI coverage terminates (see Chapter 2);
(3) 120 days after the termination of the dependent's status as an insurable dependent of the member.

 10.07 REQUEST FOR COVERAGE

a. If a member elects to cancel or reduce FSGLI spousal coverage and later wants to obtain or increase his or her FSGLI spousal coverage, the member must make a written request through that member's uniformed service. The member should complete form SGLV 8285A, Request for Insurance, in accordance with instructions attached to the form. (See appendix A)

b. Parts I and II of SGLV 8285A should be completed and signed by the member and the member's spouse. The form should then be submitted to the members Commanding Officer, equivalent or designee, who should then complete the certification in Part III. In accordance with the instructions on the form, if all medical questions are answered "NO" the form should be filed in the members' personnel file and action initiated to withhold premium payments effective the date the form is received by the branch of service.

c. If any of the medical questions are answered "YES" the form should be sent to the OSGLI for review and decision. Premium deductions should not be made until the decision is received from the OSGLI.


d. Both the member and the uniformed service concerned will be advised of the acceptance or rejection of the application by the OSGLI.

10.08 ACCELERATED BENEFITS OPTION

a. The Accelerated Benefit Option permits a Servicemember to receive up to 50% of the spousal SGLI coverage for a spouse who has been diagnosed by his/her physician as being terminally ill. Only the Servicemember can apply for this benefit.

b. Additional details regarding procedures for applying for this benefit, as well as general information, may be found in Chapter 5 of this handbook.

 10.09 CONVERSION

a. A dependent spouse of a Servicemember may convert his/her SGLI policy to a private life insurance company, under the same provisions as provided in section 10.05, when the policy is terminated. The decision to convert the policy is the dependent spouse's and the policy may be converted to an individual policy of insurance, under the same conditions as conversion of a VGLI policy to an individual policy. Conversion takes place upon written application made to the participating company, as selected by the spouse and upon payment of the required premiums. A spouse may not convert the policy to a VGLI policy. Where the insurable dependent is a child, that policy may not be converted to another individual policy of insurance.

 10.10 CLAIMS

a. General Information

(1) All claims for death benefits for any spouse or dependent child who dies while insured under FSGLI must be submitted to the OSGLI, 80 Livingston Avenue, Roseland, New Jersey 07068-1733.

(2) The casualty branch must certify the death of an insured spouse or dependent child using Form SGLV-8700. When the OSGLI receives the certification of death, OSGLI will pay to the member the amount for which the spouse or dependent child is insured under the group policy. The form SGLV 8283A, Claim for Family Coverage Death Benefits (see Appendix A) is provided for the purpose of claiming the proceeds. Payment will be made to the member at the time of the member's death; or if the member and the spouse or dependent child die simultaneously, the proceeds will be paid in order of precedence as provided by law. (See paragraph 6.06 for the order of precedence.)

(3) Under no circumstances can more than $100,000 FSGLI (plus interest) be paid in settlement of a death claim.

(4) In the event the member and the dependent or spouse die simultaneously, any determination as to eligibility of a claimant as beneficiary or any request for evidence required in support of a claim will be made by the OSGLI. This office must also receive proof that a claimant is entitled to payment. If, for example, the payment in the order of precedence is made to parents and one parent is deceased, a certified copy of the death certificate for the deceased parent should be furnished.

NOTE: If form SGLV 8283A was not furnished to the beneficiary, the form may be downloaded from our forms page.

b. Payment of Proceeds

(1) Spousal SGLI Insurance Proceeds

a) If the proceeds are to be paid in a lump sum payment, the member will be given the option of receiving the lump sum payment either through the Prudential Alliance Account, check, or by Electronic Funds Transfer (EFT)*, by checking under "My Preferred method of payment is" either Alliance Account®, or Single Payment by Check in Block 11a - Spousal benefit, in Part III, Information Concerning Payment of  Insurance Benefits on SGLV 8283A, Claim for Family Coverage Death Benefits.  Alliance is not available for payments less than $5,000, payments to individuals residing outside the United States and its territories, and certain other payments.  These will be paid by check.

*An Alliance Account is an interest bearing draft account established in the beneficiary's(ies) name with a draft book.  The beneficiary can write drafts ("checks") for any amount up to the full amount of the proceeds.  There are no monthly service fees or per check charges and additional checks can be ordered at no cost, but fees apply for some special services including returned checks, stop payment orders and copies of statements/checks.

The funds in an Alliance Account begin earning interest immediately and will continue to earn interest until all funds are withdrawn.  Interest is accrued daily, compounded daily and credited every month.  The interest rate may change and will vary over time subject to a minimum rate that will not change more than once every 90 days. You will be advised in advance of any change to the minimum interest rate via your quarterly Alliance Account statement or by calling Customer Support at (877) 255-4262.

Open Solutions Inc. is the Service Provider of the Prudential Alliance Account Settlement Option, a contractual obligation of The Prudential Insurance Company of America, located at 751 Broad Street, Newark, NJ 07102-3777. Draft clearing and processing support is provided by UMB Bank, N.A. Alliance Account balances are not insured by the Federal Deposit Insurance Corporation (FDIC). Open Solutions Inc. and UMB Bank, N.A. are not Prudential Financial companies.

b) Members who receive a lump sum payment can take advantage of no cost professional financial advice through the Beneficiary Financial Counseling service. More information about BFCS can be found in Chapter 9 of this handbook.

c) If the proceeds are to be paid in 36 equal monthly payments, the first payment will be payable as of the date of death. The amount of each payment will be computed so as to include interest on the unpaid balance at the then effective rate.

(2) Dependent Child SGLI Insurance Proceeds

a) The proceeds will be paid in a lump sum payment.  The member will be given the option of receiving the lump sum payment either through the Prudential Alliance Account, check, or Electronic Funds Transfer (EFT)*. The member should check the appropriate Method of Payment in Part III of form SGLV 8283A, Claim for Family Coverage Death Benefits. Alliance is not available for payments less than $5,000, payments to individuals residing outside the United States and its territories, and certain other payments.  These will be paid by check.

*An Alliance Account is an interest bearing draft account established in the beneficiary's(ies) name with a draft book.  The beneficiary can write drafts ("checks") for any amount up to the full amount of the proceeds.  There are no monthly service fees or per check charges and additional checks can be ordered at no cost, but fees apply for some special services including returned checks, stop payment orders and copies of statements/checks.

The funds in an Alliance Account begin earning interest immediately and will continue to earn interest until all funds are withdrawn.  Interest is accrued daily, compounded daily and credited every month.  The interest rate may change and will vary over time subject to a minimum rate that will not change more than once every 90 days. You will be advised in advance of any change to the minimum interest rate via your quarterly Alliance Account statement or by calling Customer Support at (877) 255-4262.

Open Solutions Inc. is the Service Provider of the Prudential Alliance Account Settlement Option, a contractual obligation of The Prudential Insurance Company of America, located at 751 Broad Street, Newark, NJ 07102-3777. Draft clearing and processing support is provided by UMB Bank, N.A. Alliance Account balances are not insured by the Federal Deposit Insurance Corporation (FDIC). Open Solutions Inc. and UMB Bank, N.A. are not Prudential Financial companies.

 10.11 LEGISLATIVE HISTORY

a. Public Law 107-14, effective November 1, 2001, established Family SGLI coverage for members of the uniformed services who are eligible for full-time SGLI coverage. This law allows for elected SGLI insurance coverage of the member's spouse for up to $100,000, in $10,000 increments, and automatic coverage of the member's dependent children for $10,000 for the time that they have full-time SGLI coverage. It also allows the dependent spouse the opportunity to convert SGLI Family coverage to a private life insurance policy.

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