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Life Insurance

Frequently Asked Questions and Answers

SGLI and FSGLI Premium Reduction


SGLI Premiums 


Q1. Why is the SGLI premium decreasing?

A1.   This decrease is due to both an increase in investment income and the financial position of the program resulting from the 2014 increase in premiums from 6.5 cents per month per $1,000 to 7 cents per month per $1,000.  This earlier premium increase was needed to increase the level of the Contingency Reserve, which was below its target level at that time.  The 2014 premium increase and a rise in investment income allowed the Contingency Reserve to reach its target level.  

Q2. What is the Contingency Reserve and what does it do?

A2.   The Contingency Reserve provides funds to handle normal annual fluctuations in claims experience.   Should SGLI claims that are not due to wartime hazards exceed the available funds from premium and investment income in any given year, VA would utilize the Contingency Reserve as the initial source of funds to pay those claims.   In short, the Contingency Reserve is common practice in the insurance industry and provides financial stability for the SGLI Program.
 
Q3. What is the new monthly premium rate?

A3. The SGLI monthly premium rate will decrease from 7 cents per $1,000, to 6 cents per $1,000 of insurance.  This equates to a $4.00 a month decrease in SGLI premiums for members who have the current maximum coverage of $400,000.    Follow this link to see the full range of SGLI premiums at all coverage levels

Q4:  When will the new premium rate go into effect?

A4. The new premium rate will take effect on July 1, 2019.  

Q5. How does this premium adjustment compare to past years?

A5. VA continues to place the interests of Servicemembers first and foremost by keeping SGLI premiums as low as possible while also maintaining the necessary reserve levels to ensure the program remains financially competitive.  There have been periodic increases and decreases, but over the past 30 years no single premium change has been more than 2.5 cents per $1,000 of insurance.

 

FSGLI Spousal Coverage Premiums

Q1. Why are FSGLI spousal coverage premium rates decreasing?

A1. The Family SGLI spousal coverage premium rates are decreasing based on improving claims experience in all age brackets and the financial position of the program.  


Q2. What are the new monthly premium rates?

A2.  See the full range of FSGLI spousal premiums at all ages and coverage levels.


Q3:  When will the new premium rates go into effect?

A3. The new premium rate will take effect on July 1, 2019.  

 
Q4. How does this premium adjustment compare to prior changes?

A4. The 2019 FSGLI premium reduction is the fourth decrease since the program began on November 1, 2001.  This decrease, like all prior decreases, included reductions for all age brackets. 

 

General

Q1. When will I begin being billed for the new premium?

A1. Members will see their first SGLI and FSGLI spousal coverage premium deductions at the new premium rates in their July pay.   Some members are paid twice a month, while others are paid only monthly.   For those paid on a monthly basis, the premium changes will be reflected on the single monthly pay statement in July.  For those paid twice a month, your service will determine which pay the premiums will be deducted from.  Members drilling for points, or not receiving pay for other reasons will be billed by their service for the lower premiums on the regular schedule.  However, their bill will decrease reflecting the months at the lower premium rate.  

 
Q2. How will Servicemembers be notified of the reductions in premiums?

A2: We use several methods to reach Servicemembers and their families.  We are working directly with the branches of services to provide communications to Servicemembers on the premium decrease.  Their methods of communications include putting a message on Servicemembers’ leave and earning statements, emails, highlighting on branch of service and Defense Finance Accounting Service websites, and using social media.  In addition, VA will issue a press release, highlight the change on its website and on eBenefits, as well as use social media to communicate the change.

 
Q3. Why do you have to charge any premiums?

A3.  VA Insurance programs are run like a private insurance company.  Insurance companies hold reserve funds to ensure they can pay future claims. Those funds come from the premiums they charge.  It is common group insurance industry practice to adjust premium rates as reserve funds increase and decrease, which typically happens when there are changes in the economy and/or changes in the number of death claims.  

 
Q4. How do SGLI and FSGLI premiums compare to that of other insurance providers?

A4. Our premiums are very competitive with other insurance providers, including military mutual aid organizations where many Servicemembers obtain additional insurance coverage.