Life insurance provides families with peace of mind when planning for their death. Policy owners make regular payments called premiums that will eventually be distributed as tax-free lump sum payments upon their passing.
Acquiring a 100% disability rating can enable veterans to take advantage of a range of additional benefits, such as free VA healthcare, property tax waivers and housing grants.
Life Insurance
Life insurance should be part of everyone’s plan, but certain groups have specific needs that make life insurance all the more relevant – veterans are one such group with unique insurance needs that make life insurance all the more vital for them. Because veterans with service-connected disabilities typically have limited incomes and large debts like mortgages that must be settled upon death, the VA offers several forms of life coverage tailored specifically for veterans and their spouses.
Veterans in active service are automatically eligible for up to $500,000 of coverage through Servicemembers Group Life Insurance (SGLI), yet after leaving military service they may not know all their options to improve financial security. Josh Andrews can assist veterans by helping them discover and manage life insurance options tailored specifically for them through USAA membership.
As veterans, one of the first times they should consider life insurance is when making decisions regarding disability benefits applications and coverage requirements/budget. Without access to appropriate information and resources, this decision-making can be challenging.
As previously announced by the VA, they have recently expanded their life insurance offerings with the launch of Veterans Affairs Life Insurance (VALife), an innovative guaranteed acceptance whole life policy for service-connected disabled Veterans that will go into effect January 1st 2023 and replace current program Service-Disabled Veterans Insurance (S-DVI). Existing S-DVI customers can keep or switch over to VALife.
VALife will offer up to $40,000 of coverage, available in increments of $10,000. There is no medical exam or health question required, with only two-year waiting period before full benefits take effect. VALife coverage will be offered to any veteran aged 80 years or younger with an impairment rating between 0%-100%; those 81 and older may apply if certain criteria are met, such as applying within two years after receiving their disability rating.
Disability Insurance
If you are permanently and totally disabled due to a service-connected injury, VALife could offer life insurance benefits through the Department of Veterans Affairs. Applications will open up for VALife starting Jan 1, 2023 for veterans 80 years old or younger with VA disability rating between 0 and 100.
VALife policies tend to have lower costs than private commercial policies and are available for service-connected disabilities including mental health conditions. VALife will pay out a death benefit depending on your level of coverage; you can apply via their website.
Private disability insurance tends to be more costly than VALife policies, yet also provides greater coverage. Policies may be purchased directly through financial professionals or employers as group disability policies (subsidised by them to keep costs low for employees). Unfortunately, group policies don’t port easily and will expire if an employee leaves or retires a job; VALife policies cannot.
Every disability insurance policy differs in its terms and provisions; however, some common features include:
Waiting periods that require you to be disabled for a specified amount of time before receiving benefits kick in; typically shorter for STD and longer for LTD policies. Definition of “disability” can differ between policies; it often refers to inability to engage in normal occupation due to injury or illness; some policies even have “mental & Nervous” exclusion clauses which restrict coverage for mental disorders or substance abuse as causes for disability.
Some disability policies offer cost-of-living adjustments (COLAs) that adjust benefits annually to account for inflation or other factors, and have riders that allow you to move it to another carrier or spouse upon divorce or separation. Others feature special provisions for catastrophic disabilities like total and complete loss of sight in both eyes, hearing in both ears or use of either limb.
Long-Term Care Insurance
Long-term care insurance has become an increasing necessity, as estimated figures reveal that approximately 49% of men and 65% of women reaching age 65 will require significant long-term care services over their lifetimes. Though some assistance from family or friends will likely be offered in this regard, paying for these services can often prove expensive; expenses could even eat away at savings and devalue homes altogether.
VA Life offers eligible veterans a way to obtain whole life insurance that also offers long-term care benefits at an affordable price. While premiums vary based on age, health status and other considerations, most plans include an inflation growth provision which will increase benefits over time to compensate for rising long-term care expenses.
This hybrid coverage offers life and long term care features in one policy, making it more appealing than purchasing separate policies. This may especially prove advantageous to those hoping to qualify for Medicaid coverage for long-term care services for disabled individuals.
S-DVI, also referred to as “RH insurance,” offers up to $10,000 of coverage. S-DVI premiums typically are waived if the Veteran is totally disabled or widowed; VALife enrollment does not require medical questions but there is a two year waiting period before its full benefits come into effect.
As long as the VALife application is approved during this two-year waiting period, any existing S-DVI coverage (including premium waivers) will continue. Once VALife coverage begins in its full form, S-DVI will end and full VALife coverage will become effective; alternatively a Veteran may keep their existing S-DVI for the two year period and apply later for VALife; however this option is no longer permitted if submitted after January 1, 2026; any existing cash values from S-DVI still accrue but new cash values will no longer accrue, although any remaining cash values will continue accruing due to S-DVI coverage whereas new cash values will accrue during its two year waiting period and become effective upon approval of VALife application approval; alternatively they could choose to keep S-DVI during its two year waiting period and then apply later; alternatively they could keep existing coverage until approval and apply at a later time – see also section 7 above). A veteran’s spouse or beneficiary could continue receiving any cash values due under S-DVI as would normally due under S-DVI plans would accrue but no new cash values accrue from S-DVI may accrue.
Final Expense Insurance
There are various types of life insurance, with final expense policies being one of them. Final expense policies usually feature a predetermined death benefit and fixed premiums; many policies sold as whole life policies provide coverage until death occurs or until they reach 100 years old, depending on which term the policy covers. Furthermore, some may even offer cash value accounts which accrue over time.
Choose a policy with a cash value account, and your premium payments will go toward its investment earnings – providing additional funds for covering future expenses.
Other final expense insurance options may not provide for cash value accumulation and may carry higher premiums, depending on your specific needs and coverage needs. Such policies could help cover burial expenses, funeral costs or any end-of-life costs that arise during or following life’s journey.
Many of the same companies that sell life insurance also sell final expense policies, with the main distinction being that final expense policies typically don’t require medical examinations; instead, they may ask you to answer some health-related questions or electronically analyze your prescription history to assess eligibility for the coverage.
VALife, or “Guaranteed Acceptance Whole Life Insurance,” offers coverage without medical exams or health questions for veterans who meet certain criteria, with fully automated online enrollment with instant approvals. According to its blog post about this program, it will offer fully automated enrollment with instantaneous approvals.
If you’re shopping around for final expense insurance policies, do your research carefully before choosing a provider and comparing features and prices of different companies. Be sure to consider how much money is necessary to cover final expenses, any existing life insurance you might already possess, any assets left behind after death as well as brand trust when selecting providers with high customer satisfaction ratings and strong financial ratings.
