Guide to insurance for active military and veterans

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It’s not uncommon for businesses to give discounts to members of the military, and insurance companies are no exception. These special programs help you save money on coverage and sometimes provide more adequate protection than a civilian policy. Whether you’re stationed on base, preparing to deploy or living life as a veteran, here’s how to take advantage of special military insurance coverage.

Auto insurance coverage

Current and former military members are eligible for special coverage and discounts from several auto insurers. While it’s fairly common for insurance companies to offer a military discount, some are better than others at considering service members’ unique needs. For example, some providers offer greatly reduced coverage for stored vehicles while the owner is deployed.

Popular providers

USAA is one of the most popular providers of auto insurance among military families. The company is widely praised for its excellent customer service, reaching the number one spot on several lists published by ratings agencies such as J.D. Power.

USAA only makes its policies available to current and former military members, so coverage is tailored to service members and their families. Flexible coverage options can be adjusted during periods of deployment, and multiple discounts are available for additional savings. According to the company, customers pay an average of $707 less with USAA than they did with their previous auto insurer.

Another popular choice is Geico. This isn’t a military-specific insurance provider, but it offers substantial discounts and specialized coverage exclusively to military families. Current and former service members are eligible for an immediate discount up to 15 percent off Geico’s civilian pricing.

Additional discount programs are available for specific situations such as long-term vehicle storage during deployment. Geico also has a dedicated overseas department to assist if you decide to take your car abroad with you.

While you’re deployed

When you leave for deployment, you have a few options regarding your vehicle. Whatever you decide will affect your auto insurance coverage and may raise or lower your premiums.

The most straightforward choice is to simply leave your car in long-term storage and collect it when you return. Because stored vehicles can’t get in an accident and are less likely to be damaged, many insurance companies are more than willing to slash your auto premiums. This is advantageous as you’ll retain coverage in the unlikely event that something does happen to your car while you’re gone. When you return, call the insurance company to reinstate your full policy.

Another option is to transport your car overseas. This is typically only ideal if you’re facing a long-term or indefinite deployment as shipping a vehicle can be significantly more expensive than simply renting one in your destination country. Still, there are options available to you should you decide to go this route. USAA and Geico both offer worldwide auto insurance coverage and can help guide you through the process of relocating your vehicle.

Discounts to look for

Whether you’re on active duty or a veteran of the U.S. armed forces, there are many auto insurance discounts to keep an eye out for. Here are a few you should know about:

  • Military discount: Some mainstream auto insurers offer an instant discount for being in the military. For example, Geico reduces premiums up to 15% for service members. Similar discounts are also available from Farmers and Esurance.
  • Mileage discount: If you don’t use your personal vehicle often, you can often pay less for driving fewer miles than average. USAA offers a mileage-based discount that varies depending on how much you drive. Geico’s usage-based DriveEasy program involves installing an app on your phone to track how far you drive, potentially earning discounts if it’s less than average.
  • On-base discount: USAA offers a unique discount that lets you save up to 15% when you keep your vehicle in a garage on base. Theoretically, these garages offer better security than a residential street, so there’s a smaller chance of something happening to it.
  • Vehicle storage discount: Many insurers heavily reduce your premiums if your car is placed in storage for long periods of time – such as during deployment. USAA and Geico both offer this type of discount, and USAA advertises discounts up to 60%.
  • Bundles: You can often save money if you combine auto insurance with a homeowners or renters policy from the same company. This is one of the most universal insurance discounts and is offered by most providers. USAA gives discounts up to 10% for bundled policies; Geico doesn’t give an exact number as percentages may vary by state.

Remember that just because you’re getting a discount doesn’t mean you have the best price. Always compare quotes from military-friendly insurance companies with other local competitors to make sure you’re not overpaying for coverage.

Life insurance coverage

Anyone who’s tried to take out life insurance as an active duty military member knows firsthand how difficult it is to find the right coverage. Many standard life insurance policies include a war clause that prevents benefits from being paid if the policyholder is killed during combat. This effectively disqualifies many service members from civilian life insurance.

The good news is that service members automatically get life insurance upon enlistment and can retain coverage after leaving the military. But keep in mind that you aren’t limited to these policies. You can also supplement or replace service members’ and veterans’ life insurance with a policy from a company like USAA that understands military needs.

For active service members

Active duty military members can get low-cost life insurance through the Servicemembers’ Group Life Insurance program, or SGLI. In addition to standard coverage, SGLI also offers several extensions with injury-related benefits and coverage for your dependents.

  • Servicemembers’ Group Life Insurance (SGLI): Upon enlisting in the armed forces, you’ll automatically be signed up for the maximum $400,000 in life insurance coverage through SGLI. Premiums are taken out of your base pay at a rate of six cents per $1,000 in coverage, which means you’ll pay $24 per month for a $400,000 policy. You can adjust or opt out of coverage at any time. If you do choose to keep your SGLI policy, make sure you name a beneficiary.
  • Family Servicemembers’ Group Life Insurance (FSGLI): If you’re eligible for SGLI, you can also enroll your spouse and any dependent children in FSGLI. Spousal coverage has a maximum limit of $100,000; premiums are determined by age. Your children will get $10,000 in coverage free of charge.
  • Servicemembers’ Group Life Insurance – Disability Extension (SGLI-DE): SGLI-DE is an extension you can apply for if you become totally disabled and leave the military while enrolled in SGLI coverage. If approved, you’ll keep your same SGLI coverage at no cost for two years following your date of separation.
  • Servicemembers’ Group Life Insurance Traumatic Injury Protection (TSGLI): Anyone who has SGLI coverage will also get TSGLI, an extension that covers traumatic injuries. If you’re severely injured while on or off duty, TSGLI can cover loss of income, temporary housing, and travel costs up to a total of $100,000.

For veterans

Once you leave active duty, you’ll only be covered by SGLI for a short period of time. At this point, you can elect to replace your coverage with Veterans’ Group Life Insurance, or VGLI. Like SGLI, there are several variants that you may want to take advantage of depending on your situation:

  • Veterans’ Group Life Insurance (VGLI): Former service members who had SGLI coverage can keep their same benefits by changing over to VGLI. Premiums will increase and are calculated based on age; the maximum $400,000 benefit costs $40 per month for a 30-year-old and $88 per month for a 55-year-old. If you want VGLI coverage, you’ll have to apply within 16 months of leaving the military.
  • Veterans’ Mortgage Life Insurance (VMLI): If you were disabled while on duty and received a Specially Adapted Housing (SAH) grant to make accessibility modifications to your home, you may be eligible for VMLI. This policy covers your remaining mortgage balance up to $200,000 and names your mortgage lender as the beneficiary in the event that you pass away. Premiums are based on your age and the amount of coverage you need.
  • Service-Disabled Veterans’ Insurance (S-DVI): Veterans who have a service-connected health condition and have received a disability rating from the VA can get up to $10,000 in life insurance through S-DVI coverage. Premiums are based on age and the amount of coverage elected. If you’re totally disabled, you may be eligible to have these premiums waived. Note that there is a time limit; you’ll have to apply within two years of receiving your disability rating.
  • Supplemental Service-Disabled Veterans’ Insurance (Supplemental S-DVI): If you meet the eligibility requirements for S-DVI but are totally disabled, you’ll be able to apply for up to $30,000 in additional coverage. The deadline to apply is one year from the date that your waiver for S-DVI premiums is approved. Unlike S-DVI coverage, however, you cannot apply to have supplemental S-DVI premiums waived.

Home insurance coverage

If you’re on active duty, reviewing your home insurance coverage is an important step to take while preparing for deployment. Even if a standard policy gave you enough coverage while you were at home, it may not be as effective as you think while you’re away.

There are three primary types of home insurance coverage to be aware of if you’re in the military. The first is dwelling coverage, which covers your home’s structure if it is damaged or destroyed. Personal property coverage is insurance for your home’s contents and any belongings you carry around with you on a day-to-day basis. Finally, liability coverage protects you from lawsuits if you cause bodily injury or property damage. These are part of most standard home insurance policies but may work differently while you’re on active duty.

Many insurers offer reduced pricing or discounts to service members. USAA and Armed Forces Insurance both offer competitive pricing exclusively to military families and veterans, and Geico’s military discount of up to 15% can be applied to home insurance premiums.

While you are deployed

Before deploying, review your home insurance coverage to make sure everything will be taken care of while you’re away. Ask your home insurer if the belongings you take with you on deployment will still be eligible for personal property coverage; some policies have a war exclusion clause that would cause your claim to be denied. Your home insurance may also lapse if your home is vacant for more than 60 days, which is something you should talk over with your insurer.

Once you’ve made the necessary pre-deployment preparations, find a trusted financial decision maker who can handle anything unexpected that comes up. This can be a family member, trusted friend or colleague who will remain on base while you’re away. Provide this person’s contact details to your home insurance company in case of emergency.

The bottom line

Service members need to take special care when purchasing auto, life and home insurance as standard policies may not cover every aspect of military life, particularly deployment. Thankfully, there are many different discounts and special coverages available exclusively to active duty members and veterans. These programs can help ease the burden of protecting your loved ones whether you’re at home or away serving your country.