For those of you watch your Leave and Earnings Statement carefully, be prepared for a small change to Servicemembers Group Life Insurance (SGLI) premiums in July 2014. SGLI rates will increase from 6.5 cents per $1,000 of coverage to 7.0 cents per $1,000 of coverage. For a servicemember who maintains the full $400,000 in SGLI coverage, this will be a $2.00 per month increase in premiums. Premiums for full coverage will increase from $26.00 per month to $28.00.
The Department of Veterans Affairs (VA) is charged with keeping the SGLI program financially solvent and ensuring adequate reserves. Historically low-interest rates, combined with very low SGLI premiums, have decreased the reserves held by the SGLI program. This small increase in premiums will keep SGLI reserves in the appropriate area so that it is able to pay all its claims and maintain a solid financial footing.
Current SGLI premiums are remarkably low. Since the start of the SGLI Program in 1965, monthly premiums have decreased from 20 cents per $1,000 to the current 6.5 cents per $1,000. The current rate has been in effect since 2006.
Reservists drilling for retirement points and other servicemembers not receiving pay will continue to be billed directly by their branches.
Complete details about the SGLI program can be found that the VA website’s SGLI page: http://benefits.va.gov/insurance/sgli.asp .