Date: Sun, 29 Dec 1996

The following was originated by the Veterans Voice of Austin ( and posted to the Veterans News and Information Service (

The Department of Veterans Affairs (VA) is notifying thousands of Retired Reserve Servicemembers' Group Life Insurance (SGLI) policyholders of a program merger that will affect them early next year.

Legislation signed into law October 9 eliminated the Retired Reserve SGLI program. Effective January 6, 1997, all of these policies will be automatically exchanged for policies under the Veterans' Group Life Insurance (VGLI) program. In addition, for the first time, VGLI will be extended generally to reservists and National Guard members who decide to separate prior to reaching 20-year retirement. VA supported these changes to provide reservists parity with active duty members, recognizing their important "We believe these changes to our insurance program are beneficial to both current and future veterans seeking affordable and comprehensive life insurance," Acting Under Secretary for Benefits Dr. Stephen Lemona said.

The expansion of VGLI eligibility is among several insurance program changes under the Veterans Benefits Improvements Act. It authorizes conversion of VGLI policies to commercial life insurance at any time instead of awaiting the end of every 5-year coverage period. It allows retired reservists to retain lifetime coverage under VGLI instead of being cut off from coverage at age 61 or when receiving retired pay, as was the case with Retired Reserve SGLI. The new law changed the name of SGLI from Servicemen The upcoming program merger affects an estimated 14,000 retired reservists with $1 billion in insurance coverage who, in converting to VGLI, will join 350,000 veterans in that program holding about $29 billion in insurance coverage.

Because VGLI is available only in increments of $10,000, amounts of insurance may change for those in the Retired Reserve SGLI program whose insured amount is not evenly divisible by $10,000. They will be notified that their coverage will be automatically rounded up to the next $10,000 increment unless they contact the Office of Servicemembers' Group Life Insurance to request their coverage be reduced to a lower, evenly divisible amount. Premiums will change correspondingly.

Those members with Retired Reserve SGLI policies that expired because they began receiving retired pay or reached the age of 61 prior to October 9, 1996, will not be eligible for VGLI.

For those whose policies are converted, in addition to lifetime coverage, benefits will include a longer reinstatement period of 5 years instead of 3 years after a policy has lapsed, as well as several new premium payment options, notably the use of automatic payments by deductions from VA benefits or retirement checks and an option to take a 1-month discount for annual payments.

Reservists with full-time SGLI coverage who will be separating soon and wish to maintain coverage under VGLI may receive information and application forms from the Office of Servicemembers' Group Life Insurance at 1- 800-419-1473,

Those in other situations with questions about how they may be affected by the program changes may call the same number for information on SGLI and VGLI policies. The SGLI program primarily is aimed at active duty aervicemembers, who upon discharge may convert to VGLI if they wish to ensure coverage under federal programs is uninterrupted in their new veteran status.

Unaffected by the changes are the 2.6 million veterans covered by VA's National Service Life Insurance and other insurance programs administered by VA. Questions pertaining to those programs may be directed to 1-800- 669-8477.

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