VGLI Explained: Veterans Group Life Insurance Rates, Limits, and Alternatives

What VGLI Is and How It Works

Veterans Group Life Insurance (VGLI) is a renewable group term life insurance program administered by the Department of Veterans Affairs and operated by the Office of Servicemembers' Group Life Insurance (OSGLI) through Prudential. It lets service members who had Servicemembers' Group Life Insurance (SGLI) coverage during active duty, Guard, or Reserve service continue life insurance protection after they leave the military.

VGLI is term insurance only, meaning it has no cash value and pays only a death benefit. SGLI coverage automatically expires 120 days after separation, and VGLI coverage can begin as soon as 121 days after separation, so applying quickly is the only way to avoid a coverage gap.

The program was specifically created because many veterans cannot easily buy private life insurance after service. It is a low-cost insurance program developed by the VA to provide benefits for service members and veterans who may not otherwise be eligible to receive insurance benefits from private companies due to risks involved in military service or a service connected disability.

If you are still on active duty and want context on how SGLI feeds into VGLI, our SGLI military life insurance guide breaks down the active-duty side of the program.

VGLI Application Window and the 240-Day Rule

The single most important thing to understand about VGLI is its deadline. Missing it means you lose access to this federally subsidized coverage permanently.

The Two Application Windows

You have one year and 120 days, approximately 16 months, from your date of separation from service to apply for VGLI. After this, you are no longer eligible for VGLI. Within that overall window, there are two very different sub-periods:

If you submit a VGLI application within 240 days following separation from service, you just submit the application along with the first month's premium. You do not need to provide evidence of good health. If you wait past 240 days, you must provide medical evidence and can be declined.

Maximum Coverage and How to Increase It

VGLI provides up to $500,000 of coverage to veterans, with their initial amount tied to the amount of SGLI coverage they had while active (e.g., an active duty servicemember with $50,000 of SGLI is initially eligible for only $50,000 of VGLI; one with $500,000 of SGLI is eligible for the full $500,000 of VGLI).

Coverage is issued in $10,000 increments. The cap was raised from $400,000 to $500,000 by Public Law 117-209, which increased the maximum amount of VGLI coverage for Service members separating on or after March 1, 2023, from $400,000 to $500,000.

Buying Up to the $500,000 Cap

If you separated with less than the maximum, you can build your coverage over time. On their one-year anniversary of getting VGLI, and every five years thereafter, veterans can increase their coverage amount by $25,000, up to the $500,000 limit. No proof of good health or medical underwriting is required to increase coverage. However, veterans cannot continue to increase their coverage after they reach age 60.

VGLI Premium Rates by Age (Post-July 2025)

This is where VGLI gets controversial. Premiums are based only on age (not health or sex) and they step up every five years. VGLI rates will be discounted between 2% to 17%, depending on a veteran's age, with an average discount of 11%. Coverage options for both SGLI and VGLI remain unchanged at up to $500,000. Those July 1, 2025 reduced rates are the schedule currently in effect for 2026.

Monthly Premium per $10,000 of Coverage

Through June 2025, at age 65, the same $500,000 of coverage that costs $31 per month for those on active duty costs $735 per month for veterans. On July 1, 2025, VGLI rates will decrease, and $500,000 of coverage for a 65-year-old will cost $690 per month. Even with the discount, the gap between active-duty SGLI and post-separation VGLI at retirement age is enormous.

VGLI vs Commercial Term Life Insurance

For healthy veterans, the math almost always favors private term life insurance over keeping VGLI long-term. VGLI rates are affordable for younger veterans, but maintaining this coverage can become expensive in later years since rates increase significantly as you age. Premiums for older veterans can be high compared to standard term life rates.

Side-by-Side Annual Cost Comparison for $500,000

Term life is considerably cheaper than VGLI as you get older. While VGLI rates increase every five years, rates for level term life stay the same for the duration of the policy.

If you are exploring private options, our term life insurance buyer's guide explains how level term pricing and underwriting work.

Who Should Keep VGLI vs Switch to Private Coverage

The decision boils down to one question: can you qualify for private coverage at a reasonable rate?

Keep VGLI If You...

• Have a service-connected disability or chronic health condition that would make underwriting difficult
• Were diagnosed with cancer, heart disease, diabetes, or PTSD during or after service
• Are a smoker or have a high BMI combined with other risk factors
• Are within the 240-day window but don't have time to shop for private coverage yet (use VGLI as a bridge)
• Need guaranteed lifetime renewability without re-qualifying

If you are medically uninsurable but within 240 days of separating from the military, VGLI will provide up to $500,000 of life insurance without requiring a medical exam and coverage will remain in force as long as you pay your premiums. However, if you are medically insurable, level term life insurance policies may be more affordable, especially at older ages.

Switch to Private Coverage If You...

• Are under 50 and in good health (non-smoker, no major conditions)
• Want to lock in a level premium for 20 or 30 years
• Need more than $500,000 of coverage
• Want a policy with potential cash value (whole or universal life)
• Plan to keep coverage past age 60, when VGLI rates accelerate

Converting VGLI to a Commercial Whole Life Policy

VGLI gives you one unique advantage that civilian term policies usually don't: a guaranteed right to convert to a commercial permanent policy without health questions.

If a veteran initially chooses a VGLI policy but decides to convert that policy into a specific permanent commercial policy, they can do so at any time without having to undergo a medical exam. Only certain companies offer VGLI conversion, and premium rates may vary by company.

How VGLI Conversion Works

1. Confirm your VGLI is active and premiums are current
2. Choose a participating conversion company from the official VA list
3. Request your VGLI conversion notice through your OSGLI online account
4. Apply at a local agent's office for that company's designated permanent product
5. Submit your DD-214 (or equivalent separation document) with the application

The new policy must be a permanent plan (such as whole life), not another term policy. Premiums will be based on your age at the time of conversion and will be level for life, unlike VGLI's stair-step rates.

Beneficiary Rules for VGLI

Veterans have free reign to designate the beneficiaries of their VGLI policies. Further, once designated, a beneficiary is not set in stone. VGLI policy owners can update their beneficiaries as dictated by their needs and circumstances.

You can name almost any person or entity, including a spouse, child, partner, friend, trust, charity, or your estate. You can also name multiple primary and contingent beneficiaries with specified percentages.

Default Order If No Beneficiary Is Named

If a veteran fails to designate a beneficiary and then passes away, VGLI benefits will be paid out in the following order: To a surviving spouse, or to a child or children equally; if one or more children is deceased, their share(s) will be distributed to their own descendants, or to surviving parents, equally, or a surviving parent, or to the executor or administrator of the deceased's estate, or, finally, to the next of kin under state law.

Review your designation after every major life event. Marriage, divorce, the birth of a child, or the death of a previously named beneficiary all warrant an update.

How to Enroll in VGLI

Enrolling is straightforward if you act on time. There are three ways to apply:

1. Online through the OSGLI/Prudential portal at giosgli.prudential.com (fastest)
2. By mail using SGLV Form 8714 sent to OSGLI, PO Box 41618, Philadelphia, PA 19176-9913
3. By fax to 1-800-236-6142

Within roughly 45 to 60 days of your separation date, OSGLI will mail you a VGLI application packet. If you don't receive one, do not wait. Apply directly online.

You'll need your separation date, your final SGLI coverage amount, beneficiary information, and your first month's premium payment. Coverage typically takes effect 121 days after separation (the day SGLI ends) if you apply during the preferred window.

Frequently Asked Questions

Is VGLI worth keeping long term?

For healthy veterans, usually not. VGLI's age-based premium increases make it dramatically more expensive after age 55, while a fixed-rate 20- or 30-year term policy from a private insurer locks in a much lower rate. VGLI makes the most financial sense for veterans with service-connected disabilities or health conditions that would result in rated or declined private coverage.

Can I have both VGLI and a private life insurance policy?

Yes. There is no rule preventing you from carrying VGLI alongside one or more private term or whole life policies. Many veterans use VGLI as a bridge during the first year after separation while shopping for a permanent private solution, then either keep both or drop VGLI once the private policy is in force.

What happens if I miss the 1-year-and-120-day VGLI deadline?

You permanently lose eligibility for VGLI. There are no extensions outside of rare federally declared events. If you missed the window, your remaining options are private life insurance through underwriting, guaranteed-issue policies (which are expensive and limited), or VA Life Insurance (VALife) if you have a service-connected disability rating.

Are VGLI premiums tax deductible?

No. Premiums you pay for personal life insurance coverage, including VGLI, are not tax deductible on your federal income tax return. However, the death benefit your beneficiaries receive is generally income-tax-free, which is the standard tax treatment for life insurance proceeds.

Can I lower my VGLI coverage if premiums become unaffordable?

Yes. You can decrease your VGLI coverage amount in $10,000 increments at any time, or cancel the policy entirely. Many older veterans gradually reduce coverage rather than drop it completely, especially after they have paid off a mortgage or their children reach financial independence. Just be aware that you cannot increase coverage again after age 60.