Frequently Asked Questions On The SGLI Coverage Increase to
$400,000 FAQ
- Why was the SGLI coverage automatically increased for all
Airmen to $400,000 on 1 Sep 05 without the member's written consent?
- How much will SGLI increase?
- Who will be affected?
- What coverage amount will be available?
- Will I need to fill out a new SGLI form?
- What if I don't want the maximum coverage of $400,000?
- What if I complete the SGLV 8286 on or after 1 Oct 05?
- When will the new SGLV 8286 be available? And where I can I
get one?
- As a married member, can I designate a primary beneficiary
other than my spouse?
- How will the increase affect Veteran Group Life Insurance
(VGLI) members?
- Will the Family Servicemembers' Group Life Insurance (FSGLI)
also increase?
- What actions will be performed by the Personnel (MPF, CSS or
PERSCO)?
- Why is this new SGLI coverage automatic without my written
consent?
- Why does Congress put the responsibility on service members
to make a new coverage election if declining or reducing coverage every time
the maximum SGLI benefit is increased?
GUIDANCE ON INCREASE SGLI COVERAGE TO $400,000 EFFECTIVE SEPTEMBER 1, 2005
GENERAL
Section 1012 of the Emergency Supplemental Appropriations Act for Defense, the
Global War on Terror, and Tsunami Relief, 2005 (Public Law 109-13, May 11, 2005)
increases the Servicemembers' Group Life Insurance (SGLI) maximum coverage to
$400,000 effective September 1, 2005, and allows reduced elections in increments
of $50,000. This change is effective September 1, 2005 as determined on a
worldwide basis by time at the International Dateline.
On the effective date, all members eligible for SGLI at that time will become
insured for the maximum coverage of $400,000 until they make a valid election on
or after the effective date to reduce or decline coverage. The new SGLV 8286
will not be made available until August 31, 2005. These changes will not affect
coverage under Family SGLI (FSGLI). Such coverage and limitations on such
coverage continue under previously existing rules.
Likewise, beginning on the effective date, all members who become newly eligible
for SGLI will have $400,000 in coverage until they make a valid election to
reduce or decline coverage. The monthly SGLI premium remains $3.25 per $50,000
of coverage. Therefore, $26.00 will become the monthly premium for full coverage
beginning in September 2005.
Section 1012 of P.L. 109-13, expires September 30, 2005. Further, it enacts
other provisions which are not implemented in this guidance. These provisions
are being ignored because of their perishable nature and the expectation that a
replacement law will be enacted in September and be effective retroactively to
September 1, 2005. We also expect section 1012 of P.L. 109-13, to be repealed
effective retroactively to September 1, 2005. The new law is expected to contain
only the above changes (Increase to $400,000 in $50,000 increments) as well as a
requirement for spousal notification when a member designates someone else as a
primary SGLI beneficiary. Therefore, the provisions being implemented are those
expected to become permanent effective as of September 1, 2005.
ELECTIONS ON OR AFTER SEPTEMBER 1, 2005
Levels of Coverage: No election before September 1, 2005 will apply with respect
to the member's level of coverage. New SGLI elections continue to become
effective the first day of the month after an otherwise valid election. Thus,
all members will be fully insured for $400,000 throughout the month of September
2005, regardless of any election filed that month.
Designation of Beneficiaries: Existing beneficiary designations remain effective
in the same proportion to $400,000 as the proportion of total benefits such
beneficiary was designated to receive under the last valid SGLV 8286. Such
beneficiary proportional designations remain effective until a new SGLV 8286
(September 2005 version) is properly completed on or after September 1, 2005.
Married Members Designation of a Beneficiary other than their Spouse: If a
married member designates a primary beneficiary for their SGLI coverage other
than their current lawful spouse, including an initial election upon becoming
eligible for coverage, on or after September 1, 2005, the member's spouse will
be informed that the member has made such a designation. Such advisory should be
made as quickly as possible (objectively within 30 days of the date such
election is submitted by the member), but such notice shall not include the
name(s) of the actual designated beneficiary (ies). Notices shall be sent by
first class postal service to the spouse's current address of official record
(DEERS).
Premium Liability: Should a member desire less than the automatic maximum
coverage, that member should complete a new SGLV 8286 (September 2005 version)
indicating the amount of coverage desired (including no coverage if applicable)
and submit that election as soon as possible. If such a member properly
completes and submits the form before September 30, 2005, the ember will not be
liable for the September 2005 premium associated with the reduced or declined
portion of coverage. This gives members 30 days to reduce or decline unwanted
coverage without charge. Units should process elections as expeditiously as
possible to avoid the necessity for corrections in financial transactions.
Elections after September 30, 2005: A member who does not make an election to
reduce or decline coverage from the $400,000 level before October 1, 2005, will
be charged for the full $400,000 of coverage for September as well as for any
other month in which the level of coverage remains in effect. When a member
properly completes and submits SGLV Form 8286 on or after October 1, 2005, to
reduce or decline coverage, such reduction is effective the first day of the
month after such form is properly submitted. Therefore, the member remains
liable for the full premium through the end of the month in which the election
was filed.
RESPONSIBILITIES:
Services, finance centers, and DEERS remain responsible for all actions as
previously applied. Services shall establish new procedures to send advisory
notices of non-spouse beneficiary designations as required above.
EXAMPLES
A. A member chooses to reduce coverage to $300,000 and completes a new SGLV Form
8286 on September 15, 2005, and submits such form to his/her unit on the same
day. That member's September 2005 premium is only $19.50.
B. A member chooses to reduce coverage to $300,000 and completes and submits a
new SGLV Form 8286 on October 15, 2005. The member is liable for full maximum
coverage premiums in both September and October 2005. The newly elected coverage
is effective November 1, 2005. This member's premiums would be $26.00 for
September, $26.00 for October and $19.50 for November 2005.
Questions and Answers
Question: Why was the SGLI coverage automatically increased
for all Airmen to $400,000 on 1 Sep 05 without the member's written consent?
Answer. Section 1012 of the Emergency Supplemental Appropriations Act for
Defense, the Global War on Terror, and Tsunami Relief, 2005 (Public Law 109-13,
11 May 05) increases the Servicemembers' Group Life Insurance maximum coverage
to $400,000 effective 1 Sep 05. By law, all Airmen are automatically insured for
$400,000 and may decline or reduce coverage in increments of $50,000.
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Question: How much will SGLI increase?
Answer: The maximum SGLI coverage will be increased from $250,000 to
$400,000 effective 1 Sep 05. The 6.5 cents per $1,000 coverage remains the same
and coverage election increments will change from the current $10,000 to
$50,000.
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Question: Who will be affected?
Answer: By law, anyone in the service on 1 Sep 05 will have their
coverage increased to $400,000, even if they previously declined or elected
lesser coverage. If they still desire no coverage or less than the maximum, they
will have to make a new election.
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Question: What coverage amount will be available?
Answer. Members can only elect coverage in increments of $50,000.
Previously, members could elect coverage in increments of $10,000. Therefore,
the only SGLI coverage amounts available will be:
| $50,000 |
$100,000 |
$150,000 |
$200,000 |
| $250,000 |
$300,000 |
$350,000 |
$400,000 |
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Question: Will I need to fill out a new SGLI form?
Answer: You will need to fill out a new form if:
- You reduce your coverage
- You decline coverage
- Want to update/change your beneficiary designation(s)
Your existing beneficiary designations remain effective in the same
proportion to $400,000 as the proportion of total benefits. Previous beneficiary
designations remain effective until a new SGLV 8286 (September 2005) is
properly completed on or after 1 Sep 05.
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Question: What if I don't want the maximum coverage of
$400,000?
Answer: Any member who wishes to decline or elects less coverage should
go to the MPF (or to the Commander Support Staff) and complete a new SGLV 8286
(September 2005 version). If you complete and submit the new form before 30 Sep
05, you will not be liable for the September 2005 premium associated with the
reduced or declined portion of coverage. You have 30 days beginning 1 Sep 05 to
reduce or decline unwanted coverage without charge.
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Question: What if I complete the SGLV 8286 on or after 1 Oct
05?
Answer: If you do not make an election to reduce or decline coverage from
$400,000 level before 1 Oct 05 you will be charged for the full $400,000
coverage for September as well as for any other month in which the level of
coverage remains in effect. You are liable for the full premium through the end
of the month in which the election was filed.
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Question: When will the new SGLV 8286 be available? And where
I can I get one?
Answer: The new SGLV 8286 will not be available until 1 Sep 05. You can
obtain the SGLV 8286 from your local MPF, CSS or on the
DVA Website
(www.insurance.va.gov). It is a
fillable form for which entries can be made on the page, and then downloaded.
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Question: s a married member, can I designate a primary
beneficiary other than my spouse?
Answer: Recent casualty events, along with the upcoming automatic
increase in Servicemembers' Group Life Insurance (SGLI) coverage for all Airmen
to $400,000 effective 1 Sep 05, warrant reemphasis of the importance of current
SGLI beneficiary designations. While most Airmen recognize how important this is
to their surviving family, there have been instances where the beneficiary was
not changed to reflect the spouse following a marriage. Members may choose who
they want to receive their SGLI, but they have a continuing responsibility to
provide for their dependents welfare by ensuring their SGLI Beneficiary
Designation is up to date. Airmen need to make timely and informed decisions
during critical decision points. If a married member designates a primary
beneficiary for their SGLI coverage other than their current lawful spouse, the
spouse will be informed that the member has made such a designation. Such
advisory should be made as quickly as possible (objectively within 30 days of
the date such election is submitted by the member), but such notice shall not
include the name(s) of the actual designated beneficiary (ies). MPFs are
responsible for ensuring advisory notification letters are sent to the spouse's
current address of official record (DEERS) by first class postal service.
IMPORTANT NOTE: If you are a married member and designate a primary
beneficiary other than your current lawful spouse, or elect to decline or reduce
SGLI coverage after 1 Sep 05, the new law now requires your spouse be
notified. MPFs are responsible for ensuring an advisory notification letter
is sent to your spouse.
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Question: How will the increase affect Veteran Group Life
Insurance (VGLI) members?
Answer: Members in the VGLI Program before 1 Sep 05 will not be affected.
However, all separating servicemembers covered under SGLI on or after 1 Sep 05
in an amount greater than $250,000 will be able to convert to VGLI at the new
higher level.
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Question: Will the Family Servicemembers' Group Life
Insurance (FSGLI) also increase?
Answer: No. These changes will not affect coverage under FSGLI. It will
continue under previously existing rules.
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Question: What actions will be performed by the Personnel
(MPF, CSS or PERSCO)?
Answer: Authorized representatives will sign and date, in the appropriate
blocks, properly completed forms SGLV 8286 when received. The date the form is
received should be accurately recorded as it determines the reduction or
cancellation date of the insurance.
The completed form SGLV 8286 serves as the basis for payroll deductions or
authorizing collections in a reduced amount or none at all.
Two copies of the form SGLV 8286 are filed in Section I of the member's UPRG,
after completion of the JUMPS transaction update, and a copy provided to the
member.
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Question: Why is this new SGLI coverage automatic without my
written consent?
Answer: Because it's the law. Section 1012 of the Emergency Supplemental
Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief,
2005 (Public Law 109-13, May 11, 2005) increases the Servicemembers' Group Life
Insurance (SGLI) maximum coverage to $400,000 effective September 1, 2005. This
law nullifies all elections made before 1 Sep 05 with respect to the
members' level of coverage. In effect, all coverage elections made prior to 1
Sep 05 are null and void. The new program provides automatic maximum coverage at
$400K and enrolls everyone eligible for SGLI coverage into this new program
until they make a new coverage election starting 1 Sep 05. A 30-day grace period
is provided allowing members to decline or reduce their level of SGLI and incur
no additional premium cost.
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Question: Why does Congress put the responsibility on
service members to make a new coverage election if declining or reducing
coverage every time the maximum SGLI benefit is increased?
Answer: The rationale behind automatic coverage is simple and
historically grounded. Prior to 1996, SGLI program changes were not automatic
and required members make a new election if they wanted the increased benefit
for their families. Unfortunately, some members died before they applied for the
increased coverage causing surviving families to suffer financially because they
did not receive the increased benefit. Starting 1 Apr 1996, Congress, in
response to many complaints from surviving families, decided all future
increases would be automatic, thereby requiring service members to make an
election to reduce or decline the new coverage. Since 1996, this process has
favored survivors of the deceased over any minor inconvenience the member incurs
and ensures future SGLI program changes do not negatively affect surviving
family members
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Page Updated on: 25 August 2005
