WASHINGTON -- A majority of the veterans who carried military life insurance into their civilian lives and have maintained coverage through the Veterans' Group Life Insurance (VGLI) program will enjoy $15 million in premium reductions during the next 12 months.
The Department of Veterans Affairs (VA) is cutting premium rates for VGLI policyholders between the ages of 30 and 59. This affects more than a quarter-million veterans and includes about 70 percent of those who maintain policies through the regular payment of premiums.
"This decrease is part of our continuing effort to provide veterans with insurance coverage that provides financial security at a reasonable price in today's market," said Secretary of Veterans Affairs Anthony J. Principi.
VA's experience with the costs of the program enable periodic adjustments to keep the premiums affordable while ensuring VGLI is self-sustaining. The new premiums also keep VGLI competitive with private insurance companies.
Depending upon the age of policyholders, premium rates will decrease from 5 percent to 24 percent. For example, policyholders with $100,000 in coverage between the ages of 55 and 59 will see a $4 drop in their monthly premiums to $84, while the group from 45 to 49 years of age will have a $10 monthly reduction to $32, a $120 yearly savings.
Policyholders will see the premium reductions and additional discounts reflected in their first premium bill after July 9.
Coinciding with the reduction are new premium discounts that will be offered to those who make payments quarterly or semi-annually. Currently, only a discount for annual payments is offered.
Just two years ago, in the spring of 1999, VA reduced premium rates an average of 30 percent for veterans who were under age 50. Since that time, enrollment in VGLI has increased. VA officials hope the July decrease will continue that trend.
Veterans' Group Life Insurance (VGLI) is a program that allows former military personnel to convert their Servicemembers' Group Life Insurance coverage to lifetime renewable, five-year term life insurance.
There are about 392,300 veterans covered under VGLI policies with a total face value, or basic insurance amount, of about $37.4 billion.
