Service members eligible for group term life policies

The ISBA Committee on Military Affairs has received this timely information from Army Major Joseph Baar Topinka, an Illinoisan who is judge advocate for the Madigan Army Medical Center at Fort Lewis, Wash.

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Last year, I wrote that civilian attorneys are not always aware that members of the military are covered under a program called the Service Member's Group Life Insurance, more commonly known as SGLI.

This group term life policy is available to members of the Armed Forces on active duty as well as in the reserve system. It is purchased by the government from private insurers, and is partially subsidized by the government.

Since last year, dramatic changes in SGLI have resulted in light of the Emergency Supplemental Appropriations for Defense, the Global War on Terror, and Tsunami Relief Act.

As of Sept. 1, service members are now automatically insured for the maximum coverage of $400,000 unless they opt out in writing. This is an increase from the previous amount of coverage, which was $250,000.

The $150,000 increase is retroactive for deaths resulting from wounds, injuries or illness incurred in the theaters of Operation Enduring Freedom or Operation Iraqi Freedom on or after Oct. 7, 2001.

Monthly premiums remain at $3.25 per $50,000 of coverage, so the monthly premium for full coverage will be $26 for $400,000 in coverage. Premiums are deducted from service members' paychecks and are available in increments of $50,000.

Changes require notice

In addition, the act requires notice to the spouse if the service member elects to be insured in an amount less than the maximum coverage. Spouses must also be provided written notice if the service member wants to modify beneficiary designations.

If a single service member elects not to be insured, or to be insured in an amount less than the maximum amount provided, notice must be given to any person designated by the member as a beneficiary or as the member's next-of-kin for the purpose of emergency notification.

Even members who had previously declined coverage or elected less than the previous maximum coverage of $200,000 will automatically be covered for $400,000.

To change the automatic coverage, a service member must elect less than the maximum coverage by completing a new SGLV 8286 Form, which will be available on the Department of Veterans Affairs Web site at http://www.insurance.va.gov.

The increase for service members has no impact on SGLI coverage of dependents to include a spouse and all unmarried children under the age of 18 and those over 18 but younger than 23 who attend accredited schools.

A spouse is covered for $100,000 or for the same amount as the service member's SGLI if the member's coverage is less than $100,000. This coverage is automatic unless the member declines it. Every dependent child of a service member is automatically covered by a $10,000 policy.

Coverage widely available

As I wrote last year, SGLI is available to commissioned, warrant and enlisted members of the Army, Navy, Air Force, Marine Corps and Coast Guard.

Also eligible are members of the Ready Reserve of a uniformed service who are assigned to a unit or position in which they may be required to perform active duty or duty for training and each year will be scheduled to perform at least 12 periods of inactive duty training that is creditable for retirement purposes.

SGLI coverage includes 120 days following separation or release from duty. No premiums are required during the additional period.

Service members may lose entitlement to SGLI based on their duty status at the time of death (e.g. death occurs during extended absence with out leave, better known as AWOL, or while serving a term of confinement), or other miscellaneous facts (e.g. following refusal to serve due to conscientious objector status or following the conviction of certain serious crimes).

Cause of death, however, is not relevant to the payment of SGLI proceeds, short of foul play.

It is important to make service members, especially reservist personnel, aware that eligible beneficiaries of SGLI proceeds are any persons or legal entities designated by them on VA Form SGLI 8286.

Service members have the absolute right to choose a beneficiary. Family members, however, do not have such a right. The service member is the beneficiary of the spousal SGLI policy, and also a child's SGLI policy.

Application for benefits of a service member's SGLI can be accomplished by submitting the VA Form 29-8283, Claim for Death Benefits, to OSGLI, 212 Washington St., Newark, N.J. 07102-2999. OSGLI may accept a facsimile copy of the claim at (877) 832-4943.

Forms must be signed

It is important for service members to be aware that in this computerized, quick-paced world, the process by which members enroll for coverage can be flawed if special attention is not paid to completing the VA Form SGLI 8286 correctly.

For example, a reservist could be rushed through a mobilization site and could fill out a computerized version of the form without signing it.

The form can be completed on-line and stored, but if the reservist never signs the form, the beneficiary designation is null and void. It is critical that service members understand that the VA Form SGLI 8286 must be signed and witnessed.

SGLI is a wonderful benefit, one that I have enjoyed as former member of the Illinois National Guard and now as an officer on active duty in the Army.

I encourage all attorneys providing estate planning and assistance to military clients to be well-advised about this wonderful benefit provided to members of the Armed Services.

Especially during times of deployments and mobilizations of active duty and reserve military personnel, SGLI can provide the kind of peace of mind for personnel in harm's way.

Further information about SGLI is available at www.insurance.va.gov.