VGLI vs private coverage: how to actually decide

There is no universal answer to "VGLI or private?" There is only the right answer for your health and your timeline. Anyone who tells you one is always better is selling, not advising.

Here is the decision tree, honestly.

Start with your health, not the price

The first question is not cost. It is whether you can pass medical underwriting.

• If your health is complicated — recent diagnoses, ongoing treatment, anything that gets you rated up or declined — then VGLI's guaranteed acceptance is the point. Inside 240 days of separation, VGLI takes you with no health questions and cannot decline you. For a veteran who would struggle to get covered on the private market, that is often the correct choice, full stop. Do not let anyone talk you out of a policy you can actually get in favor of one you might not qualify for.

• If your health is good, you have options VGLI cannot match on price, and you should look at them before the no-questions window closes.

Then weigh the two structures

Assume you are healthy enough to have a real choice. Now the trade-offs matter.

VGLI's cost rises on a schedule. Premiums are age-banded and step up every five years. The coverage does not get more expensive because you filed a claim or your health changed — it gets more expensive because you got older, on a fixed schedule. Over a long retirement, those step-ups add up. (VGLI rates were lowered on July 1, 2025, which helps, but the five-year band structure remains.)

Private coverage is often cheaper for a healthy veteran and can lock in a level premium that does not step up every five years. If you can pass underwriting, a private policy frequently gives you more coverage per dollar over the long run.

VGLI has a ceiling. Its maximum is $500,000, and it cannot exceed the SGLI amount you carried at separation. If your family needs more than your SGLI ceiling allowed, VGLI alone will not get you there.

Figure out how much you actually need

Before you compare any two policies, figure out the size of the hole. Coverage is not about a round number that sounds right — it is about what your family has to cover if your income stops.

That gap is the number to shop against. Whether you fill it with VGLI, a private policy, or a combination, the goal is the same: cover the gap, do not overpay for coverage you do not need.

A reasonable way to decide

Put together, the tree usually comes out like this:

1. Can't easily pass underwriting? Take VGLI inside the 240-day no-questions window. Getting covered beats getting a marginally better rate you might not qualify for.
2. Healthy, and want lifelong coverage? Compare a private level-premium policy against VGLI's five-year step-ups. The private structure often wins over a long horizon.
3. Need more than your VGLI ceiling? You will need private coverage for the difference regardless, so price the whole picture at once.
4. Not sure and the clock is running? Take the guaranteed VGLI coverage now to be protected, then compare at your leisure. You can carry VGLI while you shop. You cannot get back a closed window.

The one thing you should not do is let the 240-day window close while you think about it. Protected now beats optimal later.

Sources

• VA — VGLI (Veterans' Group Life Insurance)
• VA — Life insurance options and eligibility