Do Disabled Veterans Have Life Insurance? VALife, VGLI, VMLI

If you have a service-connected disability rating from the VA, you have life insurance options no private insurer is required to offer you. The Department of Veterans Affairs runs three programs that together cover most situations disabled veterans face: VALife, a guaranteed-acceptance whole life policy up to $40,000; Veterans’ Mortgage Life Insurance, up to $200,000 to pay off the mortgage on a specially adapted home; and Veterans’ Group Life Insurance, term coverage up to $500,000 for veterans who had SGLI on active duty. Which one fits you depends on your rating, your age, whether you own an adapted home, and how recently you separated.

VALife: The Main Program for Disabled Veterans

VALife replaced the older Service-Disabled Veterans Life Insurance program on January 1, 2023, and it is the program most disabled veterans will use.¹ There are no health questions and no medical exam. If you qualify, you’re in.

You qualify for VALife if all three of these are true:

You have any VA service-connected disability rating, including 0%.²
You are 80 or younger. There is no deadline to apply after receiving your rating, as long as you’re within the age range.
Your discharge was under other than dishonorable conditions.³

A narrow exception exists for veterans 81 or older. If you applied for VA disability compensation before turning 81, received your rating after turning 81, and apply for VALife within two years of getting that rating notification, you can still enroll.⁴ The exception exists so VA processing delays don’t cost you coverage.

How Much Coverage and What It Costs

VALife is sold in $10,000 increments up to a maximum of $40,000.⁵ Your premium is based on your age at enrollment and locks in for life. The VA counts you as one year older for premium purposes if more than six months have passed since your last birthday.

Monthly rates per $10,000 of coverage run from about $10.90 at age 18 to $127.50 at age 80. A 40-year-old buying the full $40,000 pays $88.00 per month. A 60-year-old buying the same amount pays $200.00 per month.² Because rates rise sharply with age, applying sooner rather than later matters.

You can have premiums deducted automatically from your VA disability compensation or military retirement pay. If you choose that route, two months of premiums are collected up front to cover the time needed to set up the recurring deduction.⁵ Other standard payment options are also available.

The Two-Year Waiting Period

This is the detail every VALife applicant needs to understand. The full death benefit does not take effect for two years after you enroll. If you die during that window, your beneficiaries receive the premiums you paid plus interest (4.23% for policies in 2026), not the face amount of the policy.² After two years, beneficiaries receive the full coverage amount on your death.

The waiting period also governs cash value. VALife builds cash value at a 3.5% annual interest rate, but only after the two-year mark.⁶ Cancel during the first two years and you generally get nothing back. If you later increase your coverage, a separate two-year clock starts on the new portion.

Unlike most private policies, VALife has no suicide exclusion. Cause of death does not affect the payout, subject to the same two-year waiting period.⁵

If Your Policy Lapses

You have two years from the lapse date to reinstate a VALife policy, provided you haven’t turned 81. Reinstatement requires paying all missed premiums plus interest.⁷ Miss that window and the coverage is gone for good.

VGLI: If You Recently Left Active Duty

Veterans who had Servicemembers’ Group Life Insurance on active duty can convert it to Veterans’ Group Life Insurance after separation. VGLI is term coverage between $10,000 and $500,000, so it goes much higher than VALife’s $40,000 cap.⁸ It does not build cash value, but premiums are generally lower for younger veterans who need higher amounts. You can hold VGLI and VALife at the same time.

Most veterans have one year and 120 days after discharge to apply for VGLI, for up to the amount of SGLI they carried on active duty.⁹ Once enrolled, you can increase VGLI coverage by $25,000 one year after enrollment and every five years after that, up to $500,000, until age 60.

If you were totally disabled at discharge, you can keep your SGLI coverage at no cost for up to two years through the SGLI Disability Extension.¹⁰ About 20 months in, the VA notifies you that the free coverage is ending and that you can convert to VGLI by paying premiums.

VMLI: If You Have a Specially Adapted Home

Veterans’ Mortgage Life Insurance does something the other programs don’t. It pays your mortgage lender directly if you die, so your family keeps the home. Coverage decreases as your mortgage balance drops.

To qualify, all of the following must be true:

You have a severe service-connected disability.
You received a Specially Adapted Housing (SAH) grant to buy, build, or modify a home for independent living.
You hold title to the home.
You have an active mortgage on it.
You are under 70.¹¹

Maximum coverage is $200,000 or your outstanding mortgage balance, whichever is less.¹² Premiums depend on your age, remaining balance, and how many payments are left on the loan.

You can keep VMLI when you refinance, but increasing the coverage amount requires a new application and meeting the VA’s health requirements.¹³ Notify the VA if you move, transfer your mortgage to a different lender, sell the property, or go through foreclosure. Failing to report these changes can affect your coverage or a future claim. Your SAH agent helps you complete VA Form 29-8636, which asks for the lender, remaining balance, property address, and monthly payment. Make sure your figures match the lender’s records to avoid processing delays.

How to Apply for VALife

The fastest path is the VA.gov online portal, which usually returns an immediate decision.⁵ You will need your VA file number or Social Security number and a verified login through Login.gov or ID.me.

During the application you choose your coverage amount, pick a payment method, and name beneficiaries. Take the beneficiary section seriously: include the full legal name, address, and relationship for each person or entity, and specify how proceeds should split if you name more than one.

Are the Benefits Taxed?

SGLI and VGLI death benefits are exempt from federal taxation under 38 U.S.C. § 1970(g), and they can’t be seized by creditors through legal proceedings.¹⁴ Life insurance death benefits are also generally excluded from federal income tax under the broader Internal Revenue Code, so VALife and VMLI proceeds are typically received tax-free. If your beneficiaries have a complicated situation, a tax professional can confirm how it applies to them.

1
Office of the Law Revision Counsel. 38 U.S.C. Chapter 19 – Insurance
2
Veterans Affairs. Veterans Affairs Life Insurance (VALife)
3
Veterans Affairs. Applying for Benefits and Your Character of Discharge
4
Veterans Affairs. VALife Factsheet
5
Veterans Affairs. Veterans Affairs Life Insurance (VALife) Frequently Asked Questions
6
eCFR. 38 CFR 8.11 – Cash Value
7
eCFR. 38 CFR 8.7 – Reinstatement
8
Veterans Affairs. Veterans’ Group Life Insurance (VGLI)
9
Veterans Affairs. Servicemembers’ Group Life Insurance (SGLI)
10
Veterans Affairs. SGLI Disability Extension
11
Veterans Affairs. Veterans’ Mortgage Life Insurance (VMLI)
12
Office of the Law Revision Counsel. 38 U.S.C. 2106 – Veterans Mortgage Life Insurance
13
eCFR. 38 CFR Part 8a – Veterans Mortgage Life Insurance
14
Office of the Law Revision Counsel. 38 U.S.C. 1970 – Beneficiaries; Payment of Insurance