April 7, 2008, 08:00:00 AM
Peake: Change Makes Programs More Affordable
The premium cuts affect military personnel covered by Servicemembers’ Group Life Insurance (SGLI) and veterans covered by the Veterans’ Group Life Insurance (VGLI).
“The reduction in SGLI premiums makes life insurance even more affordable for today’s men and women in uniform,” said Secretary of Veterans Affairs Dr. James B. Peake. “
On July 1, 2008, the premiums for basic SGLI will be 6.5 cents per month for $1,000 of coverage, down from 7 cents per month for $1,000. This translates into a 7 percent savings.
Servicemembers with the maximum $400,000 of coverage will see their monthly premium reduced from $28 to $26. Servicemembers are also covered against severe traumatic injury for an additional dollar each month.
The reduction in SGLI premiums is made possible by lower, non-combat-related claims and increases in investment earnings. VA officials believe this premium reduction will help maintain the nearly universal participation in the program.
VGLI provides renewable term policies for people after their discharges from the military. Veterans pay premiums according to their age for this coverage.
On July 1, 2008, VGLI premium rates will be reduced for veterans aged 30 to 64, who make up 85 percent of those insured under the program. Premium rates for those under age 30 are already competitive.
Premium reductions, ranging from 4 percent to 12 percent, are a result of fewer claims being received. The reductions will ensure that VGLI remains highly competitive with similar insurance offered by commercial insurers.
“With servicemembers putting their lives at risk against terrorism, life insurance coverage is more important than ever,” added Peake.
Peake said the premium reductions should result in increased program participation and retention. With increased enrollment, the department may be able to reduce rates in the future.
More than 2.4 million people currently participate in the VA-managed SGLI program, with another 433,000 in VGLI.
To obtain more information about the SGLI and VGLI premium reductions or to view a table with the new VGLI rates, visit the VA insurance Web site at www.insurance.va.gov, or call the Office of Servicemembers’ Group Life Insurance at 1-800-419-1473.
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