If you separated or retired within the last 240 days, submit the VGLI application now, before you finish reading this. Inside that window Veterans’ Group Life Insurance is issued without any health questions and without proof of good health. After day 240 and up to one year and 120 days from separation, you can still apply, but you must submit evidence of insurability, and a veteran who has developed a cardiac condition, a cancer history, or an autoimmune diagnosis in the interim may be declined. There is no appeal to a missed calendar.
The deadline stack is unusually dense and it is worth writing all of it on one page. SGLI coverage continues at no cost for 120 days after separation. The no-health-questions VGLI window runs 240 days. The absolute VGLI application deadline is one year and 120 days. The right to convert SGLI or VGLI into an individual commercial policy runs 120 days from the date that coverage terminates. And if you carry a service-connected disability rating, VALife has a two-year waiting period before full coverage takes effect, which means applying early is worth real money.
Everything below assumes a veteran who is now weighing rising VGLI premiums against alternatives. The honest headline is that the most valuable option for most retirees is not the one that gets discussed.
In This Article
The deadline stack, in order
Day 0 to day 120: free SGLI extension. Servicemembers’ Group Life Insurance continues at no premium for 120 days following separation. Maximum SGLI coverage rose to $500,000 effective March 1, 2023 under the Supporting Families of the Fallen Act, and the premium while serving is charged at a per-thousand monthly rate plus a separate TSGLI charge. During this 120-day window you are covered and paying nothing, which is exactly when people forget to act.
Day 0 to day 240: VGLI with no health questions. Apply within 240 days of separation and VGLI is issued without proof of good health. This is the single most valuable entitlement in the entire transition for anyone whose health is imperfect, and it is the reason to apply even if you are unsure you want to keep it long term. You can always drop coverage later. You cannot re-create a right you let expire.
Day 241 to one year and 120 days: VGLI with evidence of insurability. Still possible, now underwritten. If your health has changed since separation, expect this to be a real hurdle.
120 days from termination of SGLI or VGLI: the conversion right. You may convert to an individual policy with a participating commercial insurer at standard rates without proof of good health. The conversion policy must generally be a permanent plan; term plans and policies with supplemental benefits such as disability or accidental death are typically excluded. This right is discussed at SGLI and VGLI conversion options and it is where most of the overlooked value sits.
Age 60: the VGLI increase cutoff. VGLI holders may increase coverage by $25,000 every five years up to the $500,000 maximum, and that right generally ends at age 60. Coverage cannot exceed the SGLI amount held at separation.
Confirm every one of these directly with the VA or the Office of Servicemembers’ Group Life Insurance before relying on it. Federal program rules change and the consequence of acting on a stale number is losing an entitlement.
VALife, and what replaced S-DVI
Service-Disabled Veterans Insurance, the program long known by its RH policy prefix, closed to new enrollment on December 31, 2022. Its replacement, Veterans Affairs Life Insurance, opened on January 1, 2023, and it works differently in ways that matter.
VALife is guaranteed acceptance whole life. Veterans with a service-connected disability rating, including a 0 percent rating, may apply, generally up to age 80, with certain accommodations for older applicants. Coverage is available in $10,000 increments up to $40,000. There are no medical questions and no exam.
The critical mechanic is the two-year waiting period. Full coverage does not take effect until the policy has been in force for two years. If the insured dies during that period, the program returns the premiums paid plus interest rather than paying the face amount. That single provision is why applying early matters: every month of delay is a month added to the date on which full coverage begins. A veteran who applies at 68 and one who applies at 70 are separated by two years of waiting, not by two years of premium.
Two honest limitations. First, $40,000 is a modest face amount and will not solve an income replacement problem, though it comfortably covers final expenses. Second, veterans who already held S-DVI before the cutoff generally retained it, and holders should compare their existing S-DVI coverage against VALife before switching anything, because the older program’s supplemental provisions may be more valuable in specific cases. Verify your own status with the VA rather than assuming.
The VGLI premium problem, stated plainly
VGLI is group term insurance with age-banded rates, and the bands escalate steeply. Rates step at five-year intervals, and the bands above 60 cost multiples of the mid-fifties rate for the same face amount. A veteran carrying $400,000 of VGLI comfortably at 55 can find the same coverage genuinely unaffordable at 72, and the increases arrive on schedule with no underwriting event to blame.
Three responses exist and they are all legitimate.
Reduce the VGLI face amount. Coverage can generally be reduced in increments, which lowers the premium proportionally and requires nothing from anyone. This is the simplest fix and the least used. If the mortgage is retired and the children are grown, $100,000 may be entirely adequate where $400,000 once was.
Convert to an individual permanent policy. Within 120 days of VGLI terminating, you can convert to a permanent commercial policy at standard rates without proof of good health. A permanent policy has level premiums and builds cash value, and unlike VGLI it does not reprice every five years. For a veteran in imperfect health this can be the difference between insurable and uninsurable. The tradeoff is that permanent premiums start higher than the current VGLI rate, so the comparison must be run over the expected holding period, not against next month’s bill.
Underwrite a new individual policy in the open market. For a veteran in good health, commercial term or permanent coverage may simply cost less than VGLI at the same face amount. Get quotes before assuming the VA program is the cheapest option; for older veterans in good health it frequently is not.
The group-versus-individual mechanics generalize beyond military coverage; see portability versus conversion on group life and what group life conversion means.
| Deadline | Runs from | What you get or lose |
|---|---|---|
| 120 days | Separation | Free SGLI extension, no premium due |
| 240 days | Separation | VGLI issued with no health questions |
| 1 year and 120 days | Separation | Last day to apply for VGLI, evidence of insurability required |
| 120 days | Termination of SGLI or VGLI | Right to convert to an individual permanent policy at standard rates |
| Every 5 years until age 60 | VGLI issue | Option to increase coverage by $25,000, capped at $500,000 |
| 2 years | VALife issue | Waiting period before full coverage; premiums plus interest paid if death occurs during it |
| December 31, 2022 | Program date | S-DVI closed to new enrollment; VALife opened January 1, 2023 |
Can VGLI be sold? The honest answer
This comes up constantly and the accurate answer has two parts.
On assignability. Federal law at 38 U.S.C. Section 1970 addresses assignment of SGLI and VGLI interests, and assignment has been permitted in specified circumstances since amendments in the 1990s that were driven in part by terminally ill servicemembers seeking viatical arrangements. Because this is federal program law rather than ordinary state insurance law, do not rely on a summary. Confirm the current rule directly with the Office of Servicemembers’ Group Life Insurance before anyone spends money on the assumption.
On marketability, which is the more practical question. Even where assignment is legally possible, VGLI is a poor fit for the secondary market and buyers know it. It is annually renewable group term with no cash value and a premium schedule that escalates sharply with age. A buyer acquiring it would take on a rising and open-ended premium obligation on a contract that never accumulates value. That combination produces few or no bids. The direct treatment is at whether SGLI or VGLI coverage can be sold.
The useful move, and the one almost nobody is told about, is the conversion right. An individual permanent policy obtained by converting SGLI or VGLI at standard rates without medical underwriting is an ordinary commercial contract. It has level premiums, it builds cash value, and it is transferable under normal state law. A veteran whose health has declined and who converts inside the 120-day window ends up holding an asset with real optionality, where staying in VGLI leaves them holding an escalating bill. If any part of your planning contemplates a future policy review, converting is the step that makes that review possible. The general version of this point is at selling group life after retirement and whether group life can be sold at all.
Ranking the options for a veteran facing rising premiums
Apply for VGLI inside the 240-day window. Unconditionally first if you are still inside it. Nothing else on this list is recoverable the way this one is not.
Apply for VALife if you carry any service-connected rating. Second, because the two-year waiting period runs from issue and delay is pure loss. Even at $10,000, guaranteed acceptance coverage for a veteran with health problems is worth having.
Reduce the VGLI face amount to fit the actual need. Third, immediate, free, and reversible only downward.
Convert to an individual permanent policy within 120 days of termination. The highest-value move for a veteran in impaired health who wants a durable asset rather than an escalating term bill. Run the cost comparison over your expected holding period.
Shop the open market. Fourth for a healthy veteran, because commercial rates may beat the VGLI bands outright.
Accelerated death benefit. VGLI includes an accelerated benefit option for a terminally ill insured, generally requiring a prognosis within a stated period. Confirm the current terms with OSGLI. This can be the right answer where a life settlement is not available.
Policy loan, 1035 exchange, reduced paid-up, extended term. All four are features of permanent cash value contracts and none of them exist on VGLI, which has no cash value. They become relevant only after a conversion.
Let coverage lapse. Last, and it is what most veterans actually do by default when the premium becomes unaffordable, without ever learning that reducing the face amount or converting was available. If you take nothing else from this page, take that.
Life settlement. Realistic only on a converted individual permanent policy of meaningful size, for an older veteran whose health has declined and who no longer needs the coverage. Not realistic on VGLI itself.
When selling is the wrong answer for a veteran
When the coverage is inside the 240-day window and not yet secured. Secure the entitlement first. A guaranteed-issue right is worth more than any offer and it expires on a fixed date.
When the surviving spouse’s income depends on it. Military retirement pay ends at death, and the Survivor Benefit Plan election made at retirement determines what continues. If SBP was declined or reduced, life insurance may be the entire survivor income plan. Model the survivor’s actual monthly shortfall before disposing of any coverage.
When VA Aid and Attendance or a needs-based VA pension is in play. These are means-tested, and converting a policy into cash can affect eligibility, including under the VA’s asset transfer look-back rules for needs-based benefits. Coordinate with an accredited VA claims agent or attorney first. Background at how a policy interacts with Aid and Attendance.
When the face amount is small. A $40,000 VALife policy or a $50,000 converted policy is below the size at which secondary-market interest exists. Keep it, name a current beneficiary, and treat it as final expense coverage.
When someone contacted you first. Veterans are heavily targeted by benefit-adjacent marketing. Nobody legitimate charges an upfront fee to evaluate a policy, and nobody legitimate needs your decision this week. Verify licensing with your state insurance department before sharing anything.
When the veteran is in good health. Secondary-market pricing improves as life expectancy shortens. A healthy 63-year-old retiree will generally see no offers, and reducing coverage or shopping the open market is the better answer.
Pine Lake Life Solutions does not purchase policies and is not licensed in every state. A free policy review for a veteran starts with the separation date, the VGLI or converted policy documents, and any VALife or S-DVI paperwork, because the deadlines are the asset. Send what you have to (305) 209-7183. This page is educational information and is not legal, tax, or VA benefits advice; confirm all program rules with the VA directly. The parallel federal civilian situation is covered at FEGLI premiums in retirement.
Frequently Asked Questions
What exactly is the 240-day window?
It is the period after separation during which a veteran may obtain Veterans’ Group Life Insurance without answering health questions or submitting proof of good health. Coverage cannot exceed the SGLI amount held at separation. After day 240 and up to one year and 120 days, application is still possible but evidence of insurability is required, which is where veterans with new diagnoses are declined.
Why do VGLI premiums keep going up?
VGLI is age-banded group term insurance, so the rate steps up at five-year intervals and the bands above 60 cost multiples of the mid-fifties rate for the same coverage. There is no cash value and no level-premium option. The two responses that work are reducing the face amount to match the actual need, or converting to an individual permanent policy while the conversion right is available.
Can I sell my VGLI coverage?
Practically, no. VGLI is group term with no cash value and a steeply escalating premium schedule, so buyers face a rising open-ended obligation on an asset that never accumulates value, and bids are rare to nonexistent. Assignment of SGLI and VGLI interests is addressed by federal law at 38 U.S.C. Section 1970, so confirm the current rule with the Office of Servicemembers’ Group Life Insurance rather than relying on a summary.
What happened to S-DVI, and is VALife better?
S-DVI closed to new enrollment on December 31, 2022 and VALife opened January 1, 2023. VALife is guaranteed acceptance whole life for veterans with a service-connected rating, in $10,000 increments up to $40,000, generally up to age 80, with a two-year waiting period before full coverage. Veterans who already hold S-DVI should compare their existing coverage with the VA before changing anything.
Is the conversion right worth using?
For a veteran whose health has declined, often yes. Converting SGLI or VGLI within 120 days of termination produces an individual permanent policy at standard rates with no medical underwriting, meaning level premiums, cash value accumulation, and an ordinary commercial contract rather than an escalating group term bill. Run the cost comparison over your expected holding period rather than against next month’s premium.
What should I send for a free policy review?
Your separation or retirement date, the VGLI certificate or the converted policy’s cover page, any VALife or S-DVI documentation, and the most recent premium notice. The deadlines are the most valuable thing in the file, so the review looks at those first. There is no fee, no exam, and no obligation, and the number is (305) 209-7183.
Find out what your policy is worth — free, confidential, no obligation.
A 15-minute educational review covers your eligibility, every alternative, and a realistic view of what each path would net you.
Related Reading
- Sgli Vgli Conversion Options
- Can I Sell Sgli Or Vgli Coverage
- Va Aid Attendance Policy
- What Is Group Life Conversion
- Portability Vs Conversion Group Life
- Sell Group Life After Retirement
- Can I Sell A Group Life Insurance Policy
- Fegli Retiree Premiums
- Term Conversion Deadline Approaching
Pine Lake Life Solutions does not purchase life insurance policies and does not provide legal, tax, or investment advice. Information provided is for educational purposes only. Eligibility for any option, including life settlements, is not guaranteed and depends on individual circumstances, policy terms, underwriting, and market conditions. Consult independent legal, tax, or financial professionals before making decisions regarding a life insurance policy.