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Servicemans Group Life Insurance Coverage Increase

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Updated May 19, 2005
By Donna Miles

WASHINGTON -- Defense and Veterans Affairs officials are ironing out details of programs that will expand benefits provided through Servicemembers' Group Life Insurance.

The $82 billion supplemental legislation signed into law by President Bush May 11 increases maximum SGLI coverage to $400,000 and provides payouts of up to $100,000 for servicemembers with traumatic injuries, explained Stephen Wurtz, the VA's deputy assistant director for insurance.

The increased SGLI coverage will take effect Sept. 1, and the so-called "traumatic SGLI" benefit, December 1. Wurtz said the legislation directs that both benefits will be retroactive to Oct. 7, 2001.

Traumatic SGLI benefits will be retroactive for troops who have lost limbs, eyesight or speech or received other traumatic injuries as a direct results of injuries received during Operation Iraqi Freedom or Operation Enduring Freedom. The benefit does not apply to servicemembers suffering from disease.

The retroactive coverage increase is payable as a result of deaths in either operation, or under other conditions prescribed by the secretary of defense, Wurtz said.

Servicemembers enrolled in the SGLI program will notice an increase in their premiums when the increases take effect. The traumatic SGLI benefit will be rolled into the basic SGLI program and will likely cost about $1 a month, Wurtz said.

Troops opting for maximum SGLI coverage -- $400,000 vs. the current $250,000 - will see their monthly premiums increase from $16.25 to $26, Wurtz said. This is based on the rate of 6.5 cents per $1,000 of insurance coverage.

SGLI coverage is currently available in $10,000 increments, but as of Sept. 1, the increments will increase to $50,000.

Because the rates have not changed, servicemembers who retain $250,000 or less coverage will see no increase in their premiums, Wurtz said, except for the $1 "traumatic SGLI" premium.

While these expanded benefits will be provided retroactively, affected servicemembers won't be charged retroactive payments, he said. DoD will absorb that cost.

In a new twist introduced through the supplemental legislation, troops with dependents must get their spouse's approval to purchase less than the full amount of SGLI coverage. In the case of members who are not married, notice will be provided to the designated beneficiary when the member purchases less than the maximum coverage.

The new traumatic SGLI benefit is designed to provide "a quick infusion of cash" for cash-strapped families of troops recuperating from traumatic injuries received in the line of duty, Wurtz said.

Compensation will range from $25,000 to $100,000, and is designed to help families of severely wounded troops leave their homes and jobs to be with their loved one during recovery. "These families incur a lot of expenses, and this is designed to help them financially," Wurtz said.

While VA staff members consult with DoD to write regulations that will put the new SGLI benefits into effect, Wurtz said, "lots and lots of details have to be worked out."

Among outstanding issues is the fact that the expanded SGLI coverage is part of the supplemental legislation package that funds operations only through Sept. 30. That's 30 days after the new SGLI limit takes effect and two months before the traumatic SGLI benefit begins.

Wurtz said VA is confident Congress will resolve this issue before there's any lapse in coverage.

VA will continue to oversee and control the SGLI program.

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