Military life insurance rates up for troops, down for spouses
June 22, 2006
WASHINGTON — Troops will see their monthly military life insurance rates increase by as much as $2 next month, but they could see a reduction in the rate they pay for spouses also on the plan.
Department of Veterans Affairs officials announced that starting July 1, the monthly cost of Servicemembers Group Life Insurance will jump from $27 to $29 for a full $400,000 in coverage. Troops enrolled in the program will see the money automatically deducted from paychecks.
The increase is the first change in the SGLI premium prices since 2003, when the cost was dropped from 8 cents per $1,000 in coverage to 6.5 cents. The new rate is 7 cents per $1,000 in coverage.
The bill also includes a $1 charge for the new traumatic SGLI insurance, or TSGLI, which provides up to $100,000 in payouts for serious injuries while serving on duty.
Stephen Wurtz, deputy assistant director for insurance at the department, said the new cost reflects a higher number of claims, raising the funds needed for the program to break even.
That calculation does not include costs associated with insuring servicemembers serving in combat zones. Congress has authorized separate funding to pay for those payouts, as well as money to subsidize the premium costs paid by troops.
“And it’s still a very low rate,” Wurtz said. “We’re restricted in that we can’t charge different rates for different ages, or for people who smoke or nonsmokers, and despite those requirements we’re still under a fair rate.”
Wurtz noted for the last 20 years, the SGLI rates have remained between 6.5 and 8.5 cents per $1,000 in coverage, well below most commercial rates.
While claims among peacetime troops have increased, claims among spouses enrolled in family SGLI have gone down over the last two years, prompting a decrease for every age group in that program, Wurtz said.
The price cuts range from 50 cents to $5 per month for those receiving the full $100,000.