Are You Getting Bent Over By SGLI?

Most military members have the Servicemembers’ Group Life Insurance (SGLI) and have had it since their entry into service. Upon entry into service, each of us are automatically enrolled in SGLI at the maximum rate of $400K in death benefit at a price of $29 per month. Is this a great deal or have you been getting bent over by the SGLI for many years?

For most military members who are in good health and don’t smoke, SGLI is a pretty rotten deal. Though $29 per month certainly doesn’t break the bank, you can likely get far more death benefit (50-100% more depending on the company) for the same price. Also, if you’re happy at $400K in death benefit, you can likely achieve that level for about 30-50% less than the $29 per month. Unfortunately, most folks don’t understand life insurance or how much it should cost, so we keep pouring our money into the SGLI month after month. So, what to do?

To truly know how much death benefit is appropriate for you and/or if SGLI is a good deal for you, you should consult a financial advisor or insurance broker. Beyond the potential monthly savings in money, I’d highly encourage all military personnel with spouses and/or children to consult an insurance professional to assess their life insurance needs. As a man who is married with a child and a couple of mortgages, I can tell you that $400K is insufficient for the level of protection that I’d like my family to have. Bottom line, everyone has a different life situation and an insurance professional can help you assess yours for free (don’t worry, they make a commission if you start a policy with them).

Key Considerations –

  1. As a military member, it is important to ensure that any life insurance policy will pay out the death benefit if you were to parish in a war zone or as an act of terrorism.
  2. I’d also highly recommend you work with someone who specializes in working with military members (Dennis Lott, a prior active duty officer, of St. John’s Asset Management is my go-to guy…here’s his email).
  3. Don’t cancel your SGLI until you have worked with an insurance professional and have another policy in place.
  4. Use SGLI as additional protection during a deployment. SGLI is relatively easy to start and stop via MilConnect on the portal, so why not turn it on for extra coverage during a deployment and then turn it off when you return.
  5. Check the Department of Veterans’ Affairs website for more info on the SGLI and it’s transfer-ability to the VGLI upon separation from military service. There are also other special programs for servicemembers’ with disabilities and for insuring family members.

I don’t mean to completely knock SGLI as it will be likely be the best option for some folks who are over the age of 40-45, smoke and/or have medical conditions. But, if you don’t work with an insurance professional to discover your options, you won’t know for sure if you could be saving money every month or if $400K is the amount of coverage that makes sense for you given your life situation.

Look, I get it, discussing life insurance is about the least sexy topic in the personal finance realm perhaps after talking about budgeting. But, I’d highly encourage everyone to take a good hard look at their SGLI coverage and talk with an insurance professional to determine if there are better options to be had. This process may take an hour or two from start to finish and could impact your budget every month and, potentially, impact your family forever. Please don’t hesitate to ask me if you have questions about life insurance or the SGLI.

When considering your total financial wellness, insurance planning is just one essential piece of a complete financial plan that a qualified financial advisor can assist you with. I’m happy to help in any way possible and I’ll get you the resources you need…just let me know.

Take care! ‘Merica!

2 thoughts on “Are You Getting Bent Over By SGLI?

  1. Do you recommend a small whole life policy and a large term policy together? I’ve been of the mindset that a small whole policy can cover my funeral costs and the large term policy would maintain standard of living for my family. What are your thoughts?


    1. Hey JD, depends on your objectives with that whole life policy. But yes, most of the $1.1M I have in death benefit is from my term policy. I treat my whole life policy as the “safe money” portion of my portfolio since I don’t have any bond portion to my overall portfolio. Northwestern Mutual is the company my policies are with. Dennis Lott is a really good resource…he can broker with a lot of different companies and you don’t pay him, he gets a commission from the insurer. Questions?


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