VGLI vs. Private Life Insurance: A Side-by-Side Cost & Coverage Guide for Veterans

What VGLI actually is (and isn't)

Veterans' Group Life Insurance (VGLI) is the post-separation continuation of SGLI, administered by the VA. You can carry up to the amount of SGLI you held at separation, in $10,000 increments, capped at $500,000.

Three rules drive everything else: premiums are level only within a five-year age band, the policy is group term (no cash value, no permanent conversion to a civilian whole-life equivalent at preferred rates), and the application window is 1 year and 120 days (485 days) from separation — with no medical evidence required in the first 240 days.

VGLI's value is the guarantee. Its cost is the price curve.

What private life insurance offers veterans

Private term policies (10, 20, or 30 years) lock a single premium for the full term. A 35-year-old who buys a 30-year level term pays the same monthly rate at 64 as at 35. Most A-rated carriers (Banner, Pacific Life, Symetra, Protective, Lincoln, Mutual of Omaha) issue up to $1M+ to healthy veterans through accelerated underwriting in 24–72 hours.

Permanent options — whole life, guaranteed universal life (GUL), and indexed universal life (IUL) — keep coverage in force for life and build cash value. For most veterans, a 20- or 30-year term plus a small permanent layer is more efficient than VGLI plus nothing.

Cost comparison by age — $400,000 of coverage

VGLI rates (from the VA's July 1, 2025 rate table) versus indicative civilian 20-year level term for a healthy non-smoker:

Age 30 — VGLI $32/mo · civilian 20-year term ~$19/mo. Age 40 — VGLI $52/mo · civilian 20-year term ~$26/mo. Age 50 — VGLI $116/mo · civilian 20-year term ~$58/mo. Age 60 — VGLI $340/mo · civilian 20-year term ~$165/mo (and 30-year availability ends). Age 70 — VGLI $860/mo · civilian term is rarely issued; the comparison shifts to GUL or final-expense.

Over a 20-year horizon starting at age 35, total VGLI premium for $400k is roughly $33,000–$38,000. The same coverage on a 20-year level term issued at 35 totals roughly $5,500–$7,000. The difference funds a Roth IRA, a 529, or a permanent layer.

How service-connected disabilities affect private underwriting

Civilian underwriters never see your VA disability percentage. They see the underlying diagnoses, current treatment, and stability. A 70% rating built from tinnitus, hearing loss, and an orthopedic claim almost never changes the premium.

Conditions that do affect underwriting — controlled or otherwise — include hypertension, sleep apnea, PTSD with active medication changes, cardiac history, and certain cancers. The general rule: two years of stable, documented treatment usually produces Standard or better; six months of stability rarely does.

If you have a serious uninsurable condition, VGLI's guaranteed-issue is irreplaceable and you should keep it. For everyone else, a current health snapshot — not the rating number — drives the civilian quote.

Conversion windows you can't miss

SGLI → VGLI: within 1 year and 120 days (485 days) of separation. No medical evidence required in the first 240 days. After day 240 you can still apply through day 485 but must prove insurability.

VGLI → civilian permanent: VGLI itself can be converted to an individual commercial policy at any time, but only with a participating company and at that company's standard published rate — not a preferred class. The math almost always favors qualifying for a new civilian policy on your own health.

The right move for most healthy separating servicemembers: shop civilian term inside the first 240 days, keep SGLI/VGLI in force until the civilian policy is issued and delivered, then decide whether to drop VGLI or keep a small layer.

When VGLI is still the right answer

Uninsurable or near-uninsurable conditions — active treatment for serious cancer, recent cardiac events, severe untreated mental-health conditions, or a recent disabling diagnosis. VGLI's guarantee is worth its price curve in these cases.

Short bridges — a 2–4 year gap before a civilian job with strong group life. The five-year band structure does not bite over a short hold.

Maximum-coverage stacking — a healthy veteran who needs more than $1M total can sometimes carry civilian term plus a smaller VGLI layer to reach the target without re-underwriting later.

Texas-specific notes for veterans

Texas has no state income tax, so federal-only tax treatment applies to death benefits — proceeds are generally income-tax-free to a named beneficiary (IRC §101(a)).

Texas Insurance Code §1108.051 exempts life insurance proceeds and cash value from most creditors when paid to a named beneficiary other than the estate — relevant for veterans starting a business or carrying a VA home loan.

Tex. Ins. Code §1131.451 gives you at least a 10-day free-look period on a new civilian policy. Use it.