New VA Benefit Will Sell Guaranteed Life Insurance to Most Veterans

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U.S. Marines perform a burial ceremony.
U.S. Marines with the burial detail, Marine Corps Air Station Beaufort S.C., perform a burial ceremony in Beaufort, S.C., Sept. 26, 2012. (U.S. Marine Corps photo by Sgt. Esdras Ruano)

A new Department of Veterans Affairs life insurance policy for veterans of any level of disability rating is just six months away from launching.

In a blog post Monday, the VA reminded veterans it will begin offering Veterans Affairs Life Insurance, or VALife, on Jan. 1, 2023, in line with a law passed last year, with applications opening that day.

VALife will be open to all veterans 80 years old or younger who have a disability rating of 0 to 100. Older veterans will also be eligible if they applied for VA disability compensation before age 81 but did not receive the disability rating until after turning 81, and if they apply for the life insurance within two years of getting the rating.

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"The new program meets the needs of service-connected veterans who may not have previously qualified for life insurance with VA," the blog post said.

VALife is what's known as guaranteed acceptance whole life insurance. That means no medical exams or health questions are required to be approved, with the VA in its blog post saying the plan will have "fully automated online enrollment with instant approvals." But guaranteed acceptance plans often have lower benefits and higher premiums than other life insurance policies.

VALife will offer beneficiaries payouts of up to $40,000, with lesser coverage available in increments of $10,000.

The cost of the insurance varies based on age and the amount of coverage, but could run as low as $11 per month for an 18-year-old with $10,000 of coverage or as high as $1,768 per month for a 95-year-old with $40,000 of coverage, according to the VA website, which noted rates may change before the policy launches. The premiums are fixed for the life of policy, meaning veterans will pay the amount for the age they were when they enrolled even as they get older.

The new insurance policy was created by a bill signed into law in January 2021 called the Johnny Isakson and David P. Roe, M.D. Veterans Health Care and Benefits Improvement Act. The start date, eligibility criteria and coverage amounts were all stipulated in the law.

The law allowed the department to set premium rates based on what is "generally charged for guaranteed acceptance life insurance policies by private life insurance companies."

The department already offers what's called Veterans' Group Life Insurance, but veterans have to apply within one year and 120 days of leaving military service in order to be eligible for that plan.

The department also offers the Service-Disabled Veterans Life Insurance for veterans of any level of service-connected disability rating, but vets have to apply within two years of getting their rating.

The new VALife has no such time restriction on applying for veterans 80 or younger.

The Service-Disabled Veterans Life Insurance plan also requires veterans to be in good health apart from their service-connected condition, unlike VALife's guaranteed acceptance.

Veterans who already have the Service-Disabled Veterans Life Insurance will be able to stay in that program, but the policy will close to new applicants after Dec. 31, according to the blog post.

-- Rebecca Kheel can be reached at rebecca.kheel@military.com. Follow her on Twitter @reporterkheel.

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