October 10, 2005

Congress makes $400,000 SGLI coverage stick
Spousal notification provision added

By Rick Maze
Times staff writer

Congress has approved a partial overhaul of military life insurance coverage but has left many tough questions to be decided by future legislation.

The Servicemembers’ Group Life Insurance Enhancement Act of 2005, which cleared Congress Sept. 28, makes permanent the temporary $400,000 maximum life insurance coverage enacted earlier this year. Congress had to act because the insurance cap would have dropped back to its previous limit of $250,000 Oct. 1 without congressional action.

The bill also makes two other adjustments. First, it changes the increments in which troops can select SGLI coverage. Instead of the current $10,000 increments, service members will choose coverage in $50,000 increments.

Also, the compromise bill requires a service member’s spouse to be notified in writing if a member selects anyone other than the spouse as a beneficiary or chooses anything less than maximum coverage. The spousal notification procedure supplants a previous idea to require a spouse to consent in writing to the member’s coverage choices.

Rep. Steve Buyer,R-Ind., the House Veterans’ Affairs Committee chairman, said the moves are important at a time when many troops are in high-risk missions in Afghanistan and Iraq. “With this increased insurance coverage, we help ensure that our service members and veterans can provide for their families,” he said.

Sen. Larry Craig, R-Idaho, Buyer’s counterpart in the Senate, said the increase to $400,000 in coverage, which also applies to Veterans’ Group Life Insurance, sends “an important message” to deployed troops.

Craig said the spousal notification provision is also important, recalling testimony in February from Tiffany Petty, the widow of Army Pfc. Jerrick Petty, who was killed in Iraq in 2003 while guarding a gas station.

She testified that she learned only days before her husband deployed that his parents were going to receive half of his SGLI payment if he died.

She bought extra insurance. “We were very fortunate that we had that extra life insurance policy, but other families may not have that opportunity,” she said.

Craig hopes the notification requirement prompts families to talk about finances and what might happen in case a service member is killed. “This is important, especially for mothers with young children,” he said.

In the rush to pass the bill so coverage didn’t drop, lawmakers left some issues unresolved:

• No mention is made of notification or consent provisions for the next of kin of single service members, nor about how the military should handle instances when a service member is married to another member.

• A provision allowing service members to opt out of a new traumatic injury insurance plan, which will take effect Dec. 1, was removed. Under current law, anyone signed up for SGLI will be enrolled in the new traumatic insurance plan, which provides up to $100,000 in coverage for those with severe injuries. The House Veterans’ Affairs Committee wants to give service members the option to drop coverage, but the Senate Veterans’ Affairs Committee supports mandatory coverage.

• Despite a White House proposal that service members deployed in a combat zone receive $150,000 in SGLI coverage for free, the compromise bill contains no provision to waive collection of premiums.

House and Senate aides said the free coverage falls under the legislative jurisdiction of the armed services committees, not the veterans’ affairs committees, so there was little that could be done on this issue in the compromise bill.

Since Sept. 1, the Defense Department has been collecting the higher SGLI premiums to reflect the new rates. Whether Congress will grant free coverage, and whether any premiums will be refunded, is something lawmakers will discuss while working on the 2006 defense authorization bill.

I can't believe people actually turn it down.  What is it now?  $24 a month?  That is a steal in my book.  I have whole life on my whole family so that when the SGLI goes away after I retire I don't have to buy insurance when I'm in my 40s.  It is nice to know I have well over half a million dollars for my wife if I die.

Quoted: I can't believe people actually turn it down.  What is it now?  $24 a month?  That is a steal in my book.  I have whole life on my whole family so that when the SGLI goes away after I retire I don't have to buy insurance when I'm in my 40s.  It is nice to know I have well over half a million dollars for my wife if I die.

$26 a month, it automatically went up, all service members got it.

We have people turning it down, or off, left and right.  Idiots.

Let me see if I can find them their ID-10T forms real quick and maybe we get them the coverage they need  . . .

i think the spousal notification thing is kinda pushing it. I guess notification is better than requiring their consent.

I decide who gets the money if i kick the bucket. And the only people that should know is my insurance company, and whomever i tell. Just like my Will...it should remain private unless i choose otherwise.

Quoted: i think the spousal notification thing is kinda pushing it. I guess notification is better than requiring their consent. I decide who gets the money if i kick the bucket. And the only people that should know is my insurance company, and whomever i tell. Just like my Will...it should remain private unless i choose otherwise.

You're right.  

But I have been on two different casualty notification teams and on one of them, the casualty hadn't changed his SGLI to reflect his new wife as his primary beneficiary.  The ex got it all.  Needless to say, the new wife was very distraught over the death of her spouse, and then had to deal with no insurance money and only the death gratuity payment to tide her over.

I am in total agreement with the spouse notification feature.  

Just wait till you have your SBP (Survivor Benefit Plan) brief before your retirement.  Your spouse makes that decision, not you!

Quoted: Just wait till you have your SBP (Survivor Benefit Plan) brief before your retirement.  Your spouse makes that decision, not you!

I make my wife pay for it.