The Servicemembers Civil Relief Act
While protecting our country, some service members may have trouble meeting their financial obligations for a variety of reasons such as an unexpected activation, deployment, injury, or extension of service. The Servicemembers' Civil Relief Act (SCRA) was enacted in 2003 to offer these service members and their families special protections and benefits.
The SCRA covers all active duty service members, Reservists, and the members of the National Guard while on active duty. The protection begins on the date of entering active duty and generally ends 30 to 90 days after the date when the service member is discharged from active duty.
Under the SCRA, certain life insurance policies are entitled to special protection. To obtain this protection the insured service member, or his or her representative, must submit an application to the insurance company for protection under the SCRA. The insurance company will then submit a request to the Secretary of Veterans Affairs for approval. Approved policies are guaranteed by the United States and cannot lapse or be terminated for failure to pay premiums or interest after the date when the Secretary receives the application. The protection provided by the SCRA is limited to a maximum policy amount, and applies during the insured's period of military service and for two years thereafter.
In order to qualify, the policy must:
- Not decrease the amount of coverage or require the payment of an additional amount as premiums if the insured engages in military service (except increases in premiums in individual term insurance based upon age); or
2. Not limit or restrict coverage for any activity required by military service; and be in force for at least 180 days before the date of the insured's entry into military service and at the time of application.
To find out if you have a policy that is entitled to this protection, contact your life insurance company and ask them to assist you with the application process.
Service members Group Life Insurance (SGLI)
SGLI is low cost group life insurance for service members on active duty, ready reservists, members of the National Guard in all military branches. Service members pay a monthly premium and can obtain coverage between $50,000 and $400,000. The current monthly premium is $.07 per $1,000 of coverage. Service members who become totally disabled while on active duty can retain their SGLI coverage at no cost for up top two years.
Veterans Group Life Insurance (VGLI)
VGLI is low cost group life insurance for veterans who want to convert their SGLI policy to a policy they can keep after leaving military service. VGLI policies are issued in multiples of $10,000 up to $400,000 but a veteran cannot have a higher level of VGLI coverage than the coverage level he or she had as an active duty service member with SGLI. VGLI does not have a set premium like SGLI. VGLI premiums are based on age. To convert SGLI to VGLI, a veteran must submit an SGLV 8714, Application for Veterans' Group Life Insurance to the Office of Servicemembers' Group Life Insurance with the required premium within one year and 120 days from discharge to avoid having to provide evidence of good health. Veterans who apply more than 120 days from leaving service are required to submit this evidence. All veterans must apply for VGLI within one year and 120 days of leaving military service. Once the deadline has passed a veteran is no longer eligible.