Veterans are often entitled to privileges and discounts on much of the insurance they purchase. They can also face unique challenges with identifying companies and policies that will meet their needs. Knowing how to navigate your way through these challenges can help you find the coverage you need while minimizing your costs.
In this guide, we’ll look at five different types of insurance that veterans should have to protect themselves and their loved ones financially. These five are:
- Auto insurance
- Homeowners insurance
- Life insurance
- Health insurance/Dental insurance
- Disability insurance
Our purpose in putting this guide together is to help you and your family make informed decisions when finding the right coverage.
When shopping for car insurance, there are several components you’ll be asked about by the agent helping you find the right coverage:
- Liability: required by nearly every state, provides bodily injury and property damage liability protection to cover harm or damage to other motorists if you get into an accident and you’re at fault.
- Collision/Comprehensive: provides coverage for damage or bodily injury to you and your car, along with other motorists.
- Uninsured/Underinsured motorist: covers bodily injury or damage to you and your car if the other driver is uninsured and is responsible for the accident.
- Medical payments and personal injury protection (PIP): not required in all states, provides coverage for medical expenses, loss of income, and other designated costs for injuries sustained in an accident, regardless of who’s at fault.
Several auto insurers offer active-duty military personnel and veterans discounts on their auto insurance. Geico provides a discount of up to 15% for active duty and retired military personnel. USAA, which provides insurance and other financial services for nearly 13 million current and former service members, offers benefits such as safe driving and multi-vehicle discounts, as well as accident forgiveness.
If you’re a disabled veteran, the U.S. Department of Veterans Affairs offers an adaptive equipment grant and a one-time payment to help service members buy a specially equipped vehicle. Federal law prohibits insurers from denying coverage or charging a higher rate to people with disabilities.
Whether you have a VA loan or a conventional loan, you’re required to have homeowners insurance. Veterans who use a VA loan to buy a home are required to take out hazard insurance to cover the cost of repairing or rebuilding the home in the event it is destroyed.
Hazard insurance should cover damage to your home, including wind and fire damage, theft, or vandalism. Other parts of a basic homeowner's insurance policy should cover damage to your property, such as a fence, deck, or garage. It also should provide liability coverage if someone is injured on your property, in your home or if you damage someone else's property.
Several ways you can save money on home insurance are:
- Bundle your homeowners and auto policies. Many companies, including Allstate and State Farm, offer bundled discounts
- Increase your deductible
- Add a smart home security system
In addition, reinforcing your roof, installing storm shutters, and updating your plumbing, heating, and electrical systems may lead to a policy discount. A more secure and updated home comes with less risk, so an insurer could lower your rate because of these changes.
Term life insurance provides coverage for a specific period (typically anywhere from five to 30 years) and expires at the end of the term. Whole life insurance, which is more expensive, never expires and comes with a cash value component, which lets you borrow money from the policy while you’re still alive.
These are the different life insurance options available for veterans:
- Veterans' Group Life Insurance (VGLI): Service members with SGLI coverage can transition to this coverage at the end of their military careers. However, there are time limits on when you're eligible -- generally within one year and 120 days of when your service ends.
- Veterans' Mortgage Life Insurance (VMLI): Service members who have a severe military-related disability and have adapted a house to meet their needs can qualify for this mortgage insurance. This coverage, which maxes out at $200,000, can't exceed the amount you still have left on your mortgage.
- Service-Disabled Veterans' Insurance (S-DVI): Provides coverage of up to $10,000 to veterans who received a "service-connected disability rating by the Department of Veterans Affairs." Veterans who have basic S-DVI coverage and are completely disabled do not have to pay premiums for this insurance.
- Supplemental Service-Disabled Veterans' Insurance (Supplemental S-DVI): Provides an additional $30,000 in coverage for veterans with basic S-DVI coverage. However, the premiums for this supplemental coverage can't be waived.
Veterans who are no longer eligible for either SGLI or VGLI should consider an affordable term life insurance policy.
Active-duty military personnel is automatically enrolled in the TriCare Program. Family members also can receive coverage through this program.
TriCare offers two main health plans: TriCare Prime and TriCare Select. TriCare Prime is free for active-duty military personnel and their families. However, veterans must pay an enrollment fee. The Select plan includes deductibles and copays. Like traditional health insurance, these costs are lower when you go to a doctor in TriCare's network.
Veterans also can access VA benefits. Benefits for outpatient, inpatient, and preventive services differ from TriCare plans, as do prescription drug benefits and copays. Visit this page to read an overview of how the two programs compare.
Private health insurance is also an option for veterans. You can use a private health plan in addition to your VA benefits. However, the VA will bill your insurance company for any medical services that a VA hospital or facility provides that isn't connected to a service-related injury or illness. The VA doesn't bill Medicare or Medicaid.
There are two types of disability insurance benefits awarded under VA life insurance policies. These are:
- Waiver of premiums due to total disability, and
- Total Disability Income Provision (TDIP) payments.
Waiver of premiums
Most VA Insurance policies contain a waiver of premiums provision if the insured becomes totally disabled. Generally, to qualify for a waiver of premiums:
- The insured must have a mental or physical disability that prevents him or her from performing substantially gainful employment.
- The total disability must begin before the insured's 65th birthday and must continue for at least six consecutive months.
- The total disability may not begin before the effective date of the policy. (Exception: waiver may be granted if total disability commenced prior to the effective date only on S-DVI policies, provided it is due to a service-connected disability.)
There are certain exceptions to the above conditions. However, if you believe that you are eligible for a waiver of premiums, you should apply as soon as possible. VA will determine your eligibility and notify you of the decision. In most cases, premiums can only be waived up to one year prior to receipt of a claim.
Total Disability Income Provision (TDIP) Rider
A TDIP rider provides monthly payments to an insured starting on the first day of the seventh month of his or her continued total disability. Payments continue as long as the total disability continues.
This provision is available on all NSLI policies, except S-DVI ("RH") and VRI ("JR" and "JS").
Policyholders must apply for TDIP before their 55th birthday, and the applicant must be in good health.
Total disability income provision benefits are payable to individuals who:
- Have a TDIP Rider in force on the date that total disability began or one year from when the rider ceases, and
- Have a mental or physical disability (it does not need to be service-connected) which prevents him or her from performing substantially gainful employment, and
- Total disability must begin before the insured's 65th birthday, and
- Must continue for at least six consecutive months.
If the insured is totally disabled and qualifies for TDIP payments, he/she is also entitled to a waiver of premiums on the basic contract and the TDIP rider.
Private disability insurance is also available to veterans who qualify.
This Guide to Insurance For Veterans can serve as foundational knowledge of the insurance we’ve just looked at. Qualified insurance agents who specialize in these coverages will be helpful when you make your inquiries. Doing a bit of extra research can ensure you and your family have the insurance coverage and financial protection you need for the long term.
Having grown up in upstate New York, Bob Phillips spent over 15 years in the financial services world and has been making freelance writing contributions to blogs and websites since 2007. He resides in North Texas with his wife and Doberman puppy.
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.