At age 55, VGLI costs you $250 a month for $500,000 in coverage. A 20-year term policy you bought at 30 — same coverage — runs closer to $28.
That gap is what happens when you don’t plan before you separate.
This breaks down the actual numbers: what SGLI costs you now, what VGLI costs you later, and how to lock in a private policy before your window closes.
What SGLI Actually Costs You
While you’re active duty, SGLI is the best life insurance deal in the country. Full stop.
The math (rates effective July 1, 2025):
- $0.05 per $1,000 of coverage per month
- $500,000 maximum coverage
- That’s $25/month for $500K
- Add $1/month for the TSGLI rider (Traumatic Injury Protection — pays a lump sum for severe injuries like amputations, blindness, or burns)
- Total: $26/month
No medical underwriting. No health questions. You’re automatically enrolled. Your family gets $500,000 if you die — for the cost of a tank of gas.
It’s automatic, it’s cheap, and most people don’t think about it until it’s about to disappear.
What Happens When You Separate
SGLI doesn’t cut off the day you out-process.
You get a 120-day free extension after your separation date. Coverage stays at full value. No premium. This is your transition window, and it’s the most important insurance planning period of your military career.
After 120 days, the coverage ends. You have two choices: convert to VGLI, or get private life insurance.
Most people default to VGLI without running the numbers. Here’s what that actually costs.
The VGLI Premium Table
VGLI premiums are set by the VA. Here’s what $500,000 in coverage costs per month (rates effective July 1, 2025):
| Age Band | Monthly Premium |
|---|---|
| 29 and under | $30 |
| 30–34 | $40 |
| 35–39 | $50 |
| 40–44 | $70 |
| 45–49 | $95 |
| 50–54 | $145 |
| 55–59 | $250 |
| 60–64 | $425 |
| 65–69 | $690 |
| 70–74 | $1,075 |
| 75–79 | $1,925 |
| 80 and older | $2,200 |
Read that column slowly.
A 30-year-old paying $40/month sounds manageable. But VGLI premiums increase every five years. By your mid-fifties, you’re paying $250/month — and the next band is $425. These are post-discount rates. Before July 2025, they were higher.
VGLI makes sense for one group: veterans with serious health conditions who can’t qualify for private life insurance. The guaranteed acceptance (no medical underwriting required within the application window) is real value when you have nowhere else to turn.
For healthy veterans? You’re almost certainly overpaying.
The Comparison That Matters
You’re 30 years old, just separated. You need $500,000 in life insurance for the next 20 years — enough to cover a mortgage, kids growing up, a spouse who depends on your income.
Option 1: VGLI
Start at $40/month. Then:
- Ages 30–34: $40/month → $2,400 total
- Ages 35–39: $50/month → $3,000 total
- Ages 40–44: $70/month → $4,200 total
- Ages 45–49: $95/month → $5,700 total
Total over 20 years: approximately $15,300
At 50, if you still need coverage, you step into the $145/month band.
Option 2: 20-year level term, private carrier
A healthy 30-year-old male non-smoker can qualify for a 20-year, $500,000 term policy for roughly $28–30/month — fixed for the entire 20 years.
Total over 20 years: approximately $6,720–$7,200
Same death benefit. Fixed premium. No escalating bands.
The gap over 20 years is roughly $8,000–$9,000. That’s real money.
What About Your VA Disability Rating?
A disability rating doesn’t automatically disqualify you from private life insurance. Many veterans with ratings — even moderate ones — still qualify for standard or near-standard rates.
The general picture:
- 0–30% rating: Most conditions at these levels don’t significantly affect underwriting. Competitive rates are likely.
- 40–70% rating: Depends heavily on the specific conditions. Many veterans still qualify, sometimes with a slightly higher premium.
- 80%+ rating or serious conditions: Private carriers may decline or rate you significantly higher. This is where VGLI’s guaranteed acceptance has real value.
If you’re unsure, apply and find out. Underwriting is free. You’re not committed to anything until you accept a policy.
FSGLI: Don’t Overlook Your Spouse and Kids
While you’re still active, your spouse gets coverage too through FSGLI (Family Servicemembers’ Group Life Insurance):
- Spouse: Up to $100,000 in coverage; premiums start at $4.00/month for spouses under 35, rising to $40/month at 60+ (rates reduced July 1, 2025)
- Children: $10,000 per child, at no additional cost to you
When you separate, FSGLI ends for your spouse. This is easy to forget in the middle of transition chaos. Your spouse’s coverage needs to be part of the plan — not an afterthought.
Your Action Window: 90 Days Before Separation
This is where most people lose. They wait until terminal leave or out-processing week to think about this. By then, the clock is already running.
The sequence that protects your family:
90 days before separation: Start shopping private term life insurance. Get quotes from USAA, SelectQuote Military, or a term life comparison tool. Multiple quotes cost you nothing.
60 days before separation: Submit your application. Underwriting typically takes 4–6 weeks — longer if medical records are requested. Give yourself buffer.
30 days before separation: You should have a policy decision in hand. If approved, coordinate the effective date so there’s no gap with your SGLI coverage.
Day of separation: SGLI free extension begins. Your 120-day clock starts.
Before day 120: Your private policy should already be active. SGLI lapses — you don’t notice, because you’re already covered.
If you miss this window and need to fall back on VGLI, you have up to 1 year and 120 days from separation to apply. Within the first 240 days you can apply without proving insurability. But defaulting to VGLI means accepting those escalating premiums. Run the math before you accept the default.
What to Do Right Now
Before you do anything else: open myPay and confirm your current SGLI election. A lot of service members never looked at it after initial enlistment. Make sure you’re enrolled at $500,000.
Then, if separation is within the next 6 months:
- Pull up the VGLI premium table at benefits.va.gov — look at your age band and the next three
- Calculate your coverage need: annual income × 10–12 years is a reasonable starting point
- Get a private term life quote for that amount (USAA and SelectQuote Military are veteran-focused starting points)
- Compare 20-year total cost, not just the monthly premium
- Apply for the private policy now — don’t wait for terminal leave week
- If you have a VA disability rating, apply anyway and see what you qualify for
The worst case: you apply, get a rate that isn’t competitive, and choose VGLI instead. You’re no worse off. The real worst case is waiting until day 119 and realizing you have no plan.
SGLI is the best insurance deal of your military career. Don’t let it quietly expire.
Coverage amounts, VGLI premium tables, and eligibility rules can change. Verify current rates at benefits.va.gov before making coverage decisions. This post is for educational purposes and is not financial or insurance advice.