Military life insurance provides essential protection for active-duty service members, veterans, and their families. However, it’s not the only insurance option to consider. While Servicemembers’ Group Life Insurance (SGLI), Family Servicemembers’ Group Life Insurance (FSGLI), and Veterans Group Life Insurance (VGLI) offer accessible coverage, permanent life insurance policies, such as properly structured whole life insurance, can deliver unmatched benefits.
These policies not only enhance financial protection but also align with Paradigm Life’s Perpetual Wealth Strategy™, enabling individuals to optimize cash flow, protection, and long-term wealth. In this article, we’ll explore how each type of military life insurance compares and why combining or transitioning to a whole life policy could provide a robust foundation for your family’s financial future.
What is Whole Life Insurance?
Whole life insurance Whole life insurance is a permanent policy that provides coverage for life, with fixed premiums that never increase due to age or health changes. Its unique features include:
- Guaranteed coverage: Your policy is active for life as long as premiums are paid.
- Cash value growth: A portion of your premium builds tax-deferred cash value.
- Living benefits: You can borrow from your cash value to fund major expenses or investments.
Why it matters: Unlike term policies like SGLI or VGLI, whole life insurance combines protection with financial flexibility and long-term growth.
Why Whole Life Insurance Is Ideal for Military Families
1. Tax advantages:
- Cash value grows tax-deferred.
- Policy loans allow tax-free access to your funds.
- Death benefits are typically tax-free for beneficiaries, bypassing probate in many states.
Whole life insurance provides a more tax-efficient way to build and pass on wealth compared to traditional savings or retirement accounts.
2. Opportunity cost benefits:
Borrowing from your policy allows your money to work in multiple ways:
- Earn dividends and interest on the full policy value, even after borrowing.
- Use loans to invest in real estate, fund education, or start a business.
- Retain control of payback terms without penalties or credit checks.
Example: A $25,000 policy loan could be used as a down payment on VA-supported real estate while still earning compound interest, maximizing your financial resources.
3. Family protection beyond the basics:
Military families often find that $400,000 (the maximum SGLI coverage) is insufficient. Whole life insurance offers:
- Supplemental coverage for larger financial goals.
- Policy riders for spouse and child coverage, creating a Family Bank for generational wealth.
Take a look at this short article from Navy veteran and Wealth Strategist Gary Pinkerton to learn more: “Veteran and Military Advantages in Real Estate Investing”
Types of Military Life Insurance
Military life insurance provides critical financial protection for service members, veterans, and their families. Understanding the different types of coverage available—Servicemembers’ Group Life Insurance (SGLI), Family Servicemembers’ Group Life Insurance (FSGLI), and Veterans’ Group Life Insurance (VGLI)—is essential to making informed decisions about long-term financial security.
Servicemembers’ Group Life Insurance (SGLI)
Who it’s for:
- Active duty Air Force, Army, Coast Guard, Marines, and Navy
- Active National Guard and Ready Reserve, and inactives with 12 training periods per year
- Military academy cadets and midshipmen
- ROTC in training
- Individual Ready Reserve (IRR) volunteers
- NOAA and Public Health Service commissioned members
Application process: SGLI policies are automatically provided by the U.S. government to qualifying military personnel.
Cost and coverage: SGLI premiums for qualifying military personnel are $25/month for $400,000 in insurance coverage and a potential $25,000–$100,000 in coverage if you experience a traumatic injury during service. Premiums are the same regardless of your age or health status. You can reduce your coverage in increments of $50,000 for a lower monthly premium or opt out of coverage all together.
Term: SGLI policies are valid as long as qualifying military personnel meet active-duty requirements. After you leave service, you’re covered for 120 days. If you’re fully disabled your coverage may be extended up to 2 years. Once your term is expired, you are no longer insured and must either apply for a VGLI policy (restrictions apply) or a civilian life insurance policy.
SGLI or Whole Life?
If you’re currently an active service member with an SGLI policy, it’s possible to covert your policy to whole life insurance, but given how inexpensive ($25/month for $400,000 in insurance coverage) it is to maintain an SGLI policy while you’re in the military, it usually makes more sense to keep your policy and open an additional whole life insurance policy.
Why have both?
Often, a $400,000 insurance policy isn’t enough coverage for your family. Having whole life insurance provides additional coverage and money you can access while you’re still alive for anything you might need. If you plan on starting a business once you retire from the military, the cash value of your whole life insurance policy functions as business capital. What about college education for your kids? Buying a home? Family vacations? All can be paid for using your insurance policy as your own bank. Keep your SGLI policy for its low-cost death and disablement benefit, but add a whole life policy for its many living benefits.
Family Servicemembers’ Group Life Insurance (FSGLI)
Who it’s for:
- Active duty Air Force, Army, Coast Guard, Marines, and Navy
- Active National Guard and Ready Reserve, and inactives with 12 training periods per year
- Military academy cadets and midshipmen
- ROTC in training
- Individual Ready Reserve (IRR) volunteers
- NOAA and Public Health Service commissioned members
Application process: FSGLI policies are automatically provided by the U.S. government for children and civilian spouses of qualifying military personnel who already have an SGLI policy. If your spouse is in the military, he/she will need to apply separately.
Cost and coverage: FSGLI spousal premiums are dependent upon age and can offer up to $100,000 in insurance coverage. You can reduce coverage in increments of $10,000 for a lower monthly premium or opt out of coverage all together. Children under age 18 may receive $10,000 in insurance coverage at no cost. Coverage may be extended for dependent children over the age of 18 who are in school full-time or are disabled.
Term: FSGLI policies are valid as long as qualifying military personnel meet active duty requirements. After you leave service, you are covered for 120 days, at which time your spouse and children are no longer insured. At this time, you must find civilian insurance coverage for your family.
FSGLI or Whole Life?
With whole life insurance, you have the ability to add on policy riders—supplemental insurance for a low cost (and sometimes for free). There are riders for children and for your spouse. It’s also possible to take out separate whole life insurance policies for your kids and your significant other—even your parents. Together, your family’s policies increase the power of your family bank. Trusts can be set up and wealth passed on for generations, just like the Rockefellers.
Veterans’ Group Life Insurance (VGLI)
Who it’s for:
- Military personnel within 1 year and 120 days of being released from active-duty
- National Guard or Ready Reserves members within 1 year and 120 days of being release/retired
- National Guard or Ready Reserves members who were disabled or injured on duty
Application process: You are not automatically enrolled in a VGLI policy. You will need to submit an application to be considered for insurance. If you are within 240 days of active-duty service, you won’t need a medical exam. If you apply after 240 days of active-duty service, you will need to prove you are in good health to qualify for insurance.
Cost and coverage: You can receive up to $400,000 of insurance with a VGLI policy. Premiums vary depending on your age. They are considerably more expensive than an SGLI policy and increase every five years. You also have the option to increase your coverage by $25,000 every five years up to $400,000. Your policy premium will reflect your increase in coverage.
Term: You can choose to extend the term of your VGLI policy indefinitely, but it’s worth noting that by age 75, you would owe $1,840/month in premiums to remain insured. In many cases, it’s more cost effective to transfer your military life insurance to civilian policy once you’re no longer active duty.
VGLI or Whole Life?
If you have a VGLI policy for military and veterans, you may be given special considerations when it comes to converting to a permanent life insurance product like whole life insurance.
- You may not need a medical exam to qualify for whole life insurance.
- You’ll likely be able to convert at standard premium rates.
In addition to being able to qualify at standard premium rates without proof of good health, your whole life policy comes with a set premium—it won’t increase every five years like your VGLI policy—and you can start earning cash value, interest, potential dividends, and tax advantages. Remember, you can use your whole life insurance policy to help fund your retirement, leave a financial legacy for your family, or as a financial foundation that allows you to capitalize on other investment opportunities.
Not all mutual insurance companies offer these considerations to veterans; fortunately at Paradigm Life our Wealth Strategists (some of them veterans themselves) work with top-rated insurance companies known for providing great service to military personnel.
Application Process, Cost & Coverage
When you apply for whole life insurance with Paradigm Life, the first step is to 
. We’ll outline your financial goals and your budget to find the right insurance products and carrier for your needs. The initial phone call/virtual meeting will take about an hour and we’ll answer any questions you may have.
After you initial consultation, your Wealth Strategist will provide a free illustration showing you insurance policy options. Even if whole life insurance isn’t the right route at the time, we can offer term and disability options outside of what is offered with military life insurance from the VA. If subsequent phone calls/virtual meetings are required, they are always free to you. We’ll work with you as long as it takes to find the best solution for you and your family.
Helpful items to have ready for your consultation:
- A copy of your separation papers
- Proof of insurance, if you currently have a SGLI, FSGLI, or VGLI policy
- A copy of your last leave & earnings statement
- A list of financial goals
The cost of your whole life insurance premium will depend on the amount of coverage you select. Age and health may play a factor depending on when you apply and what current military life insurance coverage you have. Any additional riders may also affect your policy premium. For policy examples, check out our Case Study tab on our website. Keep in mind that your Wealth Strategist will work with you to find a policy that fits your needs and budget.
Once your application is approved and has gone through underwriting and your first policy premium is paid, you will be covered. Whole life insurance coverage is guaranteed for life, so long as your policy doesn’t lapse due to unpaid premiums. If you think you’d like to increase your coverage at a later date, ask your Wealth Strategist about a guaranteed insurability rider, which will allow you to purchase a more affordable policy now and increase it every 3-5 years without additional medical exams or proof of good health.
Securing Your Future: Transitioning Military Life Insurance to Whole Life
Military life insurance is a great benefit for our country’s service members, but it isn’t your only option, and may become prohibitively expensive in your later years. For insurance coverage that is guaranteed for life (with rates that won’t go up) whole life insurance may be a better option.
Whether you choose to convert from military life insurance to a whole life policy or supplement your current military life insurance with additional private sector life insurance, whole life offers living benefits not found with other policies, including tax advantages, cash value, policy loans and liquidity. It functions as your own personal bank and can help create a solid foundation for growing and protecting wealth.
At Paradigm Life we can customize a policy to fit your financial situation. Our expert Wealth Strategists are available to answer your questions and show you customized illustrations, outlining an individual plan of action to help you achieve your goals. 
, no strings attached.
FAQ
Q: What are the benefits of converting military life insurance to whole life insurance?
A: Converting to whole life insurance provides lifelong coverage, fixed premiums, and the accumulation of cash value, offering financial flexibility and potential tax advantages not typically found in military term life insurance.
Q: Can military personnel convert their life insurance to whole life policies?
A: Yes, military personnel can convert their Servicemembers’ Group Life Insurance (SGLI) or Veterans’ Group Life Insurance (VGLI) to a whole life policy. This often includes benefits like no medical exam requirements and standard premium rates.
Q: What should military members consider when choosing between SGLI/VGLI and whole life insurance
A: They should consider factors like coverage duration, cost over time, the potential for cash value accumulation, and the long-term financial goals and needs of their family.
Q: How does whole life insurance complement military life insurance in a long-term financial plan?
A: Military life insurance, like SGLI and VGLI, provides valuable term coverage, but it isn’t designed for lifetime financial growth. Whole life insurance integrates seamlessly into The Perpetual Wealth Strategy™, offering:
- Cash Flow: Access to tax-advantaged policy loans for any financial need.
- Protection: Guaranteed death benefits ensure your family’s security.
- Wealth Building: Cash value growth creates opportunities to invest, fund retirement, and leave a lasting legacy.
By combining military life insurance with a whole life policy, you gain both short-term coverage and a comprehensive, long-term wealth strategy.
Q: Where does military life insurance fit within a comprehensive financial plan?
A: In Paradigm Life’s Hierarchy of Wealth™, military life insurance (SGLI, FSGLI, and VGLI) serves as a foundational safety net. These term policies provide basic protection but lack the liquidity and growth potential of higher-tier assets.
Whole life insurance, as a Tier 1 Asset, strengthens this foundation by offering:
- Liquidity through cash value that’s accessible at any time.
- Stability with guaranteed growth, regardless of market conditions.
- The ability to support investments, retirement, and legacy planning.
Supplementing or converting military life insurance with whole life coverage enhances your financial security while providing long-term flexibility and growth.
Q: How can whole life insurance benefit my family beyond basic coverage?
A: Whole life insurance allows military families to implement The Family Bank Strategy, creating a financial system that supports multiple generations. By leveraging the cash value of your policy, you can:
- Fund family goals like education, home purchases, or starting a business.
- Create a legacy of financial literacy and stability for your children.
Ensure seamless wealth transfer with tax-free death benefits that avoid probate.
This strategy turns your family’s policies into a powerful tool for building and sustaining generational wealth.
