Insurance for Veterans: A Primer

If you’re a veteran or active-duty serviceman or woman, the spouse or child of a veteran or active-duty serviceman or woman, or a cadet or midshipman at a military academy, you have some insurance perks you can take advantage of.

First, you’re probably eligible for certain types of insurance provided through the Department of Defense (DOD) or Veteran’s Affairs (VA).

And second, you’re likely eligible for discounts on some types of insurance offered by private insurers.

In this article, I’ll provide an overview of the health, disability, life, auto, and homeowners insurance available for veterans, active-duty personal, and their families.

Health Insurance

Tricare

First and foremost here is Tricare. This program is run by the DOD and provides civilian health benefits (care outside of military-run treatment facilities) to active duty military, to retirees, to dependents of both, and to some members of the military reserves.

There are numerous plan options available, including:

• Standard plan
• Preferred provider (PPO) plan
• Health maintenance organization (HMO) plan
• Life plan that supplements Medicare
• Young adult plan (for children of veterans or active-duty personnel who are no longer eligible to collect under their parent’s policy)

This page is a good place to start researching the details of each plan and whether you’re eligible for them.

Other Options

If you’re not eligible for coverage under Tricare, another possibility is CHAMPVA.

In general, the health insurance policies available through either the DOD or the VA will be less expensive than those you can purchase privately, and are therefore recommended if you are eligible. If you do want to look into private insurance, best bets are Military Benefit Association and AFBA.

Disability Insurance

Military Disability Coverage

If you are active duty military, you automatically get disability coverage through the military.

Usually, you cannot file a claim on that policy until after you have been discharged, though there are some exceptions.

Also, if your disability is especially severe, you might be eligible for benefits that are greater than usual.

Private Disability Coverage

Private disability insurance can be difficult to obtain, though it is worth exploring as the benefits paid by the VA are not the highest. Talk to a broker – or more than one if the first has no experience obtaining disability for active duty military.

If, however, you are not active duty military, acquiring disability insurance is generally no different than it is for anyone else (see Why You Need Disability Insurance to learn more).

Servicemembers’ Group Life Insurance

As active duty military, you are automatically enrolled in Servicemembers’ Group Life Insurance (SGLI). You can select the coverage amount in increments of $50,000, up to a maximum of $400,000. Your premium will be seven cents per month for every $1,000 in coverage and it will be deducted from your pay.

If you opt for coverage in any amount, you are also charged an additional $1 per month for the Traumatic Injury Protection Program (TSGLI ). TSGLI provides short-term financial assistance up to $100,000 for traumatically injured servicemen or women, whether combat, on-duty, or off-duty.

So, if you select $400,000 in coverage, your monthly payment will be $29 ($28 for the basic coverage and an addition dollar to fund TSGLI).

You are not required to participate in SGLI, though the onus is on you to opt out – if you don’t, you are in. But, at seven cents per $1,000 of coverage, the price is right, especially if you are in a combat zone where private insurance might not cover you. If you do want to explore the possibility of private insurance, best choices are USAA, AFBA, Navy Mutual, and MBA.

In addition, coverage under SGLI is available for spouses and children. The maximum amount for spouses is $100,000 and the amount cannot be more than your own coverage. Dependent children can be covered up to $10,000.

SGLI is available only for active duty military and eligible family members, but you can convert the policy to a Veterans Group Life Insurance Plan. To do so, you must apply within 120 days of ending active duty. There are also some private insurers that participate in the conversion process.

In addition to the above, life insurance and mortgage life insurance are available to disabled veterans. Benefits are also available to surviving spouses and dependents (and under certain circumstances, parents), under the Dependency and Indemnity Compensation Program (DIC). Also of note is another program, Service-Disabled Veterans Insurance (S-DVI), that provides life insurance coverage for severely disable veterans.

Auto Insurance Discounts

USAA offers discounts on auto insurance to active, retired, officer candidate, and survivors of the military. Geico offers discounts to active, retired, and reserve military. Arbella offers discounts (in Massachusetts only) to active duty military. USAA has made it onto our list of the best car insurance providers if you live in Detroit, Flint, or Odessa.

Homeowner’s Insurance

At least few companies – Armed Forces Insurance and USAA – aim for the military market.

If you’re looking for homeowner’s insurance, definitely consider checking out our guides to the best homeowners insurance:

• Best home insurance companies in Pensacola, FL
• Best home insurance companies in Port St. Lucie

Get Professional Advice

Getting help from an agent or broker is a great way to find the policy that best suits your needs.

If you’re a veteran or active-duty servicemember, don’t settle for the first insurer who will offer you a policy. Get help from an insurance agent or broker so you can be sure you’re getting the insurance you deserve.