Whole Life Insurance for Military Veterans

Key Takeaway

If you are a recent veteran, you may be wondering if you should choose a whole life insurance policy through the Department of Veterans Affairs (VA) or choose a private insurance policy. Most veterans qualify for VA-sponsored insurance policies that offer several benefits. But the VA typically doesn't offer any permanent whole life insurance policies (in some cases, they may if you have a service-connected disability). If you need long term coverage, you may want to consider a private policy for whole life insurance. By carefully reviewing your options, you can find the right insurance coverage for your needs.

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Veterans whole life map
4/15/2024

When service members reach the end of their active military duty, many veterans wonder if they should opt for life insurance policies offered through the Department of Veterans Affairs (VA) or choose a policy through private insurers. While a veteran's life insurance policy can last up to 120 days after their service has ended, military veterans may want to plan ahead or weigh all of their insurance options.

Life insurance is more than a death benefit‒it can help provide peace of mind for your loved ones and legacy for the future. Servicemembers in the military can work high-risk jobs, which could potentially impact your family’s financial future if you aren’t prepared. With life insurance and guidance from an insurance agent, you can help protect your family in the event that something happens to you.

Whole life insurance is a type of permanent life insurance, which means it stays in force for a lifetime as long as monthly premiums are paid in full. These life insurance policies can also include additional benefits, such as cash value over the life of the policy.

How Life Insurance Works for Military Personnel and Veterans


Whole life insurance differs from term life insurance in that a whole life policy lasts for the duration of the policyholder’s lifetime as long as the premiums are paid.(Term insurance premiums must also be paid for the policy to remain in force, but Term life insurance ends after a certain time period.) Your life insurance premiums can remain the same price throughout the policy’s duration, and your life insurance benefit is guaranteed, provided all premiums are paid. Generally, whole life insurance offers a tax-free death benefit to be paid out to your beneficiaries upon your passing.

This type of life insurance policy can also accumulate a cash value. Whole life insurance policies typically contain a saving component where account value can grow, making it somewhat similar to a retirement saving account. These life insurance policies, however, should not be viewed as a replacement of a pension, IRA, or 401k plan. If you are looking for a policy that offers benefits to supplement your other retirement management tools, this type of life insurance policy may be a suitable supplement to those life plans.

How Account Value Works with Life Insurance


Essentially, when you pay your life insurance premiums, a portion of that money goes into the policy’s cash value. This cash value can be withdrawn or borrowed against at later points in the policyholder’s life or to cover part or all of your monthly life insurance premiums down the line, subject to the policy limitations. Instead of taking out a new line of credit, your cash value can be used as a down payment on a home mortgage or to pay medical bills, for example.

However, when you take too much out of the cash value account or drain it, you may reduce the final death benefit or risk surrendering the policy. Some policyholders may surrender their whole policy to receive the entire account value amounts‒minus any surrender fees‒but this option typically terminates the policy and your beneficiaries will no longer be able to receive the policy’s death benefit.

Whole Life Insurance Coverage for Military and Veteran Families


Finding life insurance coverage for you means finding a policy that ultimately serves your family, too. Whether you’re active-duty military or a veteran looking for whole life coverage, life insurance can help provide much-needed relief to your loved ones in the event of your passing.

Life insurance can help families pay for end-of-life expenses, debts, replace lost income, help pay college tuition, and even impart a financial gift to loved ones. When considering a whole life insurance policy, you can learn how your cash value can increase this amount and more with advice from your Everly insurance agent.

Understanding the Death Benefit with Your Life Insurance Policy


The death benefit can be one of the most important features of any life insurance coverage, especially for veterans and those who served in the armed forces. Former military and active duty soldiers typically understand there is some level of risk involved in their service, which is why a guaranteed death benefit could be critical for their families’ security.

Whole life insurance offers a guaranteed death benefit, which means the amount paid out to your beneficiaries is guaranteed not to decrease provided all premiums are paid and there are no outstanding loans. It is also typically guaranteed to be paid if the insured is still living at the age specified in their policy’s contract.

Individual Whole Life vs. Servicemembers’ Group Term Life Insurance Policy


It’s important to compare your options with servicemembers’ group life insurance and whole life insurance. In general, a veterans’ group life insurance policy is a type of term life insurance. 

There is a key difference between servicemembers’ group term life insurance policies and individual whole life insurance policies for veterans. With a group term life policy, you only have death benefits without the cash value account found in whole life insurance policies.

Another key difference between the two policies is that group term life insurance policies don’t typically last as long as whole life, because they are only for a specified term. With a group term life policy, you purchase coverage for a set term where your premiums are guaranteed to stay the same. However, once that coverage term is up, the life insurance premiums and other terms may change or end. 

With both products, the death benefit is generally only paid out if the coverage is still active when the insured passes. Both group and individual policies may also require potential policyholders to complete a health exam in order to obtain the coverage. 

When Should You Opt for Private Whole Life Insurance Policies?


Most veterans qualify for VA-sponsored policies and products, and those can come with an array of benefits. However, as of 2021, the VA doesn’t offer any permanent policies or products. Additionally, there currently aren’t any VA-sponsored life insurance policies that offer an investment or cash value component to the coverage.

Additionally, private life insurance policies may offer more coverage than a VA-sponsored program. It’s common for a VA-sponsored program to offer a maximum life insurance benefit of $400,000. If your family needs further coverage to replace income, pay off end-of-life expenses, and more, a private product may be a better fit.

If you are one of the many military veterans seeking a permanent life insurance solution with a cash value component, a guaranteed death benefit, and consistent coverage, a private life insurance policy may be the right fit for you.


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The information above is for educational use only and does not represent insurance, tax or legal advice. It is not a recommendation or solicitation to buy insurance. Please talk to your licensed insurance agent for more information about life insurance and your needs. Please consult with the appropriate professional for tax or legal advice. Guarantees are backed by the claims-paying ability of the issuing insurance company.


Article Author: Meredith Bell
Author Bio: Meredith joined Everly in 2022 and has 20+ years of experience in the life insurance industry. She has held various roles in advertising, marketing, communications, sales and distribution support, and product development. Outside of the office, Meredith lives with her daughter Kennedy and their dog Mavis. Meredith enjoys cooking, camping, gardening, hiking, and bourbon (though not always at the same time). She is a live music enthusiast and an avid reader. Her favorite quote is by Thomas Jefferson: "I cannot live without books." Meredith agrees, but would add cheese, movies, and dogs to that list.

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