Whole Life Insurance Options for Military Veterans Explained

As a military veteran, you've likely made sacrifices for your country, and it's essential to consider your financial security, especially in your retirement years. Whole life insurance is a type of policy that can provide a guaranteed death benefit and a cash value component that can be borrowed against.

One of the key benefits of whole life insurance for veterans is the ability to use the policy's cash value to supplement retirement income. This can be especially helpful for veterans who may not have access to traditional pension plans or retirement savings accounts.

Whole life insurance policies can also be used to pay off outstanding debts, such as mortgages or car loans, which can free up more money in retirement. Many veterans find this peace of mind invaluable as they approach retirement.

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Whole life insurance is a type of permanent life insurance that provides a guaranteed death benefit and a cash value component.

The cash value of a whole life insurance policy grows tax-deferred and can be borrowed against or used to pay premiums.

For veterans, there are a few different life insurance options available, all backed by the government. These options vary among programs and not all former military personnel may be eligible.

Northwestern Mutual offers term, whole, and universal life insurance policies, as well as the ability to switch from existing government life insurance programs like SGLI and VGLI.

Individual whole life insurance policies offer a cash value account, but group term life insurance policies do not.

A key difference between individual whole life and group term life insurance policies is that group term life policies don't last as long as whole life policies. They're only for a specified term, after which the coverage may change or end.

With a group term life policy, your life insurance premiums are guaranteed to stay the same for the set term, but once that term is up, the premiums and other terms may change or end.

Both individual and group life insurance policies require a health exam to obtain coverage.

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If you're a veteran looking for life insurance, it's essential to know your options. Here are some top picks for life insurance companies that cater specifically to veterans.

USAA stands out as the best life insurance for disabled veterans, offering a range of policies that can help you plan for the future.

New York Life is a top choice for veterans over 60, providing flexible and affordable life insurance options.

AAFMAA offers the best whole life insurance for veterans, providing a guaranteed death benefit and cash value accumulation.

Military Benefit Association (MBA) is the best term life insurance for veterans, offering competitive rates and flexible coverage options.

Uniformed Services Benefit Association (USBA) offers the best life insurance for veterans and their spouses, providing comprehensive coverage and benefits.

Here are some key features to consider when choosing a life insurance company:

Note that some companies may have additional features and benefits that can be useful for veterans, such as Northwestern Mutual's premium waiver in case of disability. However, these features are not included in our top picks.

If you're a veteran looking for life insurance options, there are a few government-backed choices available to you.

These options are only open to former service members, and eligibility criteria can vary depending on your circumstances and date of separation from the military.

Not all former military personnel may be eligible for these programs, so it's essential to determine your individual eligibility before purchasing a policy.

All of these options are backed by the government, which can provide a sense of security and stability for you and your loved ones.

Before buying any policy, you should determine how much life insurance you need to ensure you're adequately covered.

Whole life insurance policies for veterans offer a cash value component that can be withdrawn or borrowed against to cover expenses or pay premiums. This can be a valuable feature for those who need access to cash.

The cash value can be used as a down payment on a home mortgage or to pay medical bills, for example. However, taking too much out of the cash value account or draining it can reduce the final death benefit or risk surrendering the life insurance policy.

New York Life offers a range of riders that can be especially useful to older veterans, including those that cover the cost of chronic care and waive the payment of premiums in the event of disability.

Here are some of the key riders offered by New York Life:

New York Life also offers dividend payments on its whole life insurance policies, with a dividend of $1.9 billion declared in 2022.

You can borrow up to 75% of your policy's available cash value through a policy loan.

Policy loans can be a convenient way to access cash, but it's essential to understand the terms. The outstanding loan amount and any accrued interest are subtracted from the death benefit at settlement or from the policy's cash value upon surrender during the insured's lifetime.

Borrowing against your policy's cash value can also help you cover expenses, such as medical bills or a down payment on a home mortgage. However, be cautious not to drain your cash value account, as this may reduce the final death benefit or risk surrendering the life insurance policy.

Surrendering your policy to receive the entire account value amounts, minus any surrender fees, is an option, but it typically terminates the policy and your beneficiaries will no longer be able to receive the life insurance policy's death benefit.

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The death benefit with your policy is a crucial aspect to consider. It's a guaranteed payout to your loved ones when you pass away, providing financial security for those who depend on you.

A guaranteed death benefit is a key feature of whole life insurance, which means the amount paid out won't decrease as long as you pay your premiums on time and don't have any outstanding loans.

If you're a veteran or servicemember, a guaranteed death benefit could be especially important for your family's security, given the risks involved in your service.

The amount of the death benefit is guaranteed, but there are some options to consider. For example, Navy Mutual's Flagship Whole Life plan features a two-part accelerated death benefit at no additional cost.

If you're diagnosed with a terminal illness with a remaining life expectancy of 24 months or less, you may be eligible for a one-time, lump-sum payment of up to 100% of the plan's death benefit. This option is available if you've been covered by the Flagship Whole Life plan for five or more years.

Here are some details about the Terminal Illness Option:

If you're looking for a whole life insurance provider that caters specifically to veterans, AAFMAA is a great option. AAFMAA offers programs for military members up to age 80, which is a high maximum age.

AAFMAA's policies tend to be well-priced, and non-smokers may find them even more affordable compared to VGLI. AAFMAA's policies also offer no-medical-exam policies, which can be a convenient option for those who want to skip the medical exam.

However, it's worth noting that AAFMAA's no-medical-exam policies have a maximum benefit of $25,000. AAFMAA is available in only 16 states, so be sure to check if it's offered in your area.

Here are some key benefits of choosing AAFMAA:

You may eventually outgrow your VGLI policy, and that's okay. You can apply for term or whole life insurance, but it's smart to shop around for quotes first.

Shopping around can help you avoid leaving your family uncovered if something unexpected happens between policies. You can also consider keeping your VGLI policy and adding another one to boost your death benefit.

It's worth exploring private online life insurance policies, like those offered by Ethos, which don't require a medical exam.

If you're considering VGLI, it's worth noting that it's only available to Veterans who had SGLI while in service. You need to convert your policy within one year and 120 days after separation to be eligible.

The maximum coverage offered by VGLI is $500,000, which is significantly higher than VALife's maximum of $40,000.

Your premiums with VGLI start lower, but they increase sharply as you age, which means you'll likely see a significant jump in cost every five years.

You may eventually outgrow your VGLI policy, and that's okay. It's smart to shop around for quotes before canceling VGLI to avoid leaving your family uncovered.

You can apply for term or whole life insurance as a replacement, but it's essential to compare prices and coverage first. Ethos policies, for example, don't require a medical exam, just a few health questions.

If you're not sure about switching, you could keep your VGLI policy and add another policy to boost your death benefit. This way, you can maintain some level of coverage while exploring other options.

Get your quote now and see if a private online life insurance policy is better for you than your VGLI coverage.

If you're a veteran over 60, New York Life stands out as a top choice for life insurance. New York Life offers multiple permanent life insurance options, including whole, universal, and variable universal plans.

The company's solid financial rating and history of dividend payments make it a dependable provider. New York Life has the highest A++ financial strength rating from AM Best and has had fewer complaints than most insurers.

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New York Life's policies come with optional riders that can be especially useful for older veterans. These riders include coverage for chronic care and waiving premiums in the event of disability.

You can purchase policies through one of the company's agents, but be prepared for an old-school business model. There's no online quote tool, and you'll need to contact an agent to get details on premiums.

New York Life's eight different plans offer flexibility and choice. Here are some of the plans they offer:

The company's dividend payments can be a significant benefit, with a $1.9 billion dividend declared in 2022. This dividend was distributed to eligible policyowners, providing an added value to their policies.

Whole life insurance can be a great way for veterans to build cash value over time, with some policies offering a guaranteed minimum interest rate of 2% and a maximum interest rate of 4%.

As a veteran, you may be eligible for a tax-free loan from your policy's cash value, which can be used for a variety of expenses, including home repairs or a down payment on a new home.

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You can borrow up to 90% of your policy's cash value, but be aware that interest will accrue on the loan and reduce the death benefit.

To get started with whole life insurance, you'll need to apply for a policy and provide some basic information, such as your military service history and any pre-existing medical conditions.

The application process typically takes a few weeks to a few months, and you'll be asked to provide a medical exam and other documentation to support your application.

Some whole life insurance policies for veterans offer a waiver of the medical exam requirement, which can speed up the application process and make it more convenient.

The cost of whole life insurance can vary depending on your age, health, and other factors, but on average, veterans can expect to pay between $50 and $200 per month for a policy.

The death benefit paid to your beneficiaries will be tax-free, and the cash value of your policy can grow over time, providing a potential source of funds for you or your loved ones in the future.

It's worth noting that some whole life insurance policies for veterans offer a guaranteed death benefit, which means that the benefit will be paid regardless of the policy's cash value.

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