WASHINGTON -- Military servicemembers get a great deal in the life insurance program offered by the Department of Veterans Affairs (VA), a new study found.
VA life insurance for military personnel is 58 percent less than the cost of comparable private-sector plans, according to the study. In addition, widows and widowers receiving VA benefits after a veteran's service-related death average about $5,000 a year more in income than their non-veteran counterparts.
The study evaluated the adequacy of the Dependency and Indemnity Compensation (DIC) program for surviving family members of veterans whose deaths are service-connected and four VA life insurance programs: Servicemembers' Group Life Insurance, Veterans' Group Life Insurance, Service-Disabled Veterans Insurance and Veterans Mortgage Life Insurance.
In 1998, Congress directed VA to contract for a study of the adequacy of the five programs, which support the survivors of veterans who die in uniform or with a service-related condition. The two-year, $1.4 million study involved surveying 5,500 servicemembers, veterans and dependents.
"By serving the families of veterans, we serve the veterans themselves and honor their sacrifices to our nation," VA Secretary Anthony J. Principi said.
Principi added that VA would look closely at the way survivor programs are administered to seek improvements in light of the new study.
As a first step, he ordered the report be sent to veterans organizations and members of Congress as well as VA's top managers in hopes of stimulating debate about options for future improvements to these programs. VA officials have begun meeting with veterans groups and congressional staff members as well.
The report, Program Evaluation of Benefits for Survivors of Veterans with Service-Connected Disabilities, recommends an increase in support provided surviving spouses who have dependent children when a veteran's death is service-connected.
Among the report's other recommendations in VA programs are:
• Providing servicemembers with optional supplemental coverage and family coverage;
• Lowering rates for veterans group insurance, which recently has been accomplished by Principi's announcement cutting premium rates for Veterans' Group Life Insurance policyholders between the ages of 30 and 59, effective July 9;
• Increasing basic coverage for insurance for the service-disabled from $10,000 to $50,000 and reducing premiums;
• Eliminating the current termination at age 70 for mortgage life insurance and increasing the maximum coverage from $90,000 to between $150,000 and $200,000; and
• Considering an option of a lump-sum payment in lieu of monthly payments for survivors of veterans whose deaths were service-related.
The report found that servicemembers' coverage of $250,000 is higher than plans provided by private-sector employers.
Other findings included that almost all survivors have income above the poverty level. However, the report concluded that the poverty level is not likely to be a level that most citizens would accept as sufficient gratitude for the service of veterans with service-connected disabilities. Approximately 10 percent were found to have incomes less than 150 percent of the poverty level.
About half of survivors receiving monthly DIC benefits reported that annual expenses exceeded income by about $3,000 to $6,000. However, a significant finding was that the presence of dependents in the survivors' households increased the perceived shortfall to about $9,000 annually.
The study was led by Systems Flow Inc. and conducted by Economic Systems and the Hay Group, with survey support by ORC Macro International. A copy of the executive summary is available on the VA Web site at http://www.va.gov/vetdata/execreportmay2001.doc.
