United States Department of Veterans Affairs

Servicemembers' & Veterans' Group Life Insurance

VGLI Premium Reduction and Change in Rate Structure

In October 2002, VA reduced Veterans' Group Life Insurance (VGLI) premiums for the third time in four years. The premium reduction benefits approximately 37 percent of the VGLI population. In addition, VA has also changed our rate structure to one that will allow veterans to make a more valid comparison between the VGLI program and other term life insurance programs.

The information below provides more detailed information on the October 2002 VGLI rated reduction.

Premium Rate Reduction

What Age Groups Are Affected By This Reduction?

VGLI premium rates were reduced for policyholders ages 40-59.


When Did The Premium Reduction Occur?

This premium reduction is being done in conjunction with a change in the rate structure, both of which will be phased in over a five-year period beginning October 1, 2002, as VGLI policies come up for renewal.


What Are The New Premium Rates?

As shown below, the amount of premium reduction varies by age group, ranging from 14% to 23%.

Monthly Premiums for $1,000 of Insurance

Age Group

Prior VGLI Premiums

Reduced VGLI Premiums Percent Reduction
40-44
.22
.19
14%
45-49
.32
.25
22%
50-54
.52
.40
23%
55-59
.84
.70
17%

 

Change in Premium Rate Structure

How is the Rate Structure Changing?

Previously, when a veteran enrolled in VGLI, he or she would pay the same premium rate for five years, even if he/she reached the next age group during that five-year period. Now, for all VGLI policies that become effective or renew on or after October 1, 2002, the veteran will begin paying the premium rate corresponding to his or her age at time of enrollment or renewal, but when he or she reaches the next age group, he or she will begin paying the premium for that age group.

For example, under the old structure, if a veteran enrolled in VGLI at age 38, the veteran would pay the premium rate for age group 35-39 for five years until his/her policy renewed, and the veteran was age 42. At renewal, the veteran would pay the premium rate for age group 40-44 for the next five years. Under the new structure, this same veteran will pay the premium rate for age group 35-39 until his/her 40th birthday, at which time he/she will begin paying the premium rate for age group 40-44.

The new rates, and the new rate structure, are designed to address the inconsistency between VGLI and most other term life insurance plans. The new rates will improve the competitiveness of the VGLI program and should promote a higher level of enrollment and retention. Additionally, the new rate structure will enable veterans to make more meaningful comparisons between VGLI and competing plans, and to choose the plan that makes the most sense to him or her.

View VGLI Premium Rates