SGLI vs Private Term Life: Do You Actually Need Both?
Example: SGLI coverage amount (max $500,000): 500000 $ · Your current age: 28 yrs · Comparable private term life quote (monthly): 55 $ · Years of coverage needed: 20 yrs
| SGLI saves you vs private term | $4,560 |
| SGLI monthly premium | $36 |
| Total SGLI cost over period | $8,640 |
| Total private term cost over period | $13,200 |
| SGLI annual cost per $1,000 of coverage | 0.86 |
Worked example
For a 28-year-old wanting $500,000 in coverage for 20 years: SGLI costs $29/month ($348/year). A comparable 20-year term policy for a healthy 28-year-old might run $35–$55/month. Over 20 years, SGLI costs $6,960 vs $8,400–$13,200 for a private policy — a savings of $1,440–$6,240. The risk is what happens at separation: VGLI (Veterans Group Life Insurance) rates rise sharply with age and health. A smart strategy is to lock in private term coverage while young and healthy on active duty, so you have a private policy at known rates regardless of what happens at separation.
Frequently asked questions
What is VGLI and how does it relate to SGLI?
VGLI (Veterans Group Life Insurance) is the continuation of SGLI coverage after separation. You have 240 days from separation to apply for VGLI without a health exam (up to your SGLI coverage amount). After 240 days, you must provide evidence of insurability. VGLI premiums are age-banded and increase every 5 years, making it expensive in your 50s and 60s.
Can I increase my SGLI coverage above $500,000?
No. The maximum SGLI coverage is $500,000 as of 2024. If your family needs more coverage — for example, if your spouse does not work and you have dependents and a mortgage — you will need supplemental private term life insurance.
Does SGLI cover death in combat?
Yes. SGLI covers death from any cause, including combat, accidents, illness, and suicide (subject to a two-year contestability period for suicide). It is one of the most comprehensive group life insurance policies available.
What is the SGLI Traumatic Injury Protection (TSGLI) rider?
The $1/month TDP rider pays $25,000–$100,000 for severe traumatic injuries that result in certain losses (limb, sight, hearing, etc.) or require prolonged hospitalization. It is automatically included in SGLI and pays regardless of whether the injury is combat-related.