VGLI vs. Term Life Insurance: Which Costs Less for Veterans?

VGLI usually costs more than private term life for a healthy, tobacco-free veteran who needs coverage for a set number of years, because VGLI premiums rise every 5 years with your age. But VGLI can be the better buy if you have health problems, use tobacco, or want coverage you can keep renewing for life, since it skips health questions when you apply within 240 days of leaving service. The honest answer depends on your age, your health, and how long you need the coverage.

Below, you'll see how each option is priced, current VGLI rates, and a simple way to compare total cost before you choose.

What's the difference between VGLI and term life insurance?

VGLI is renewable group term coverage from VA that you can keep for life, while private term life covers you for a fixed period, usually 10 to 30 years, at a level price.

Veterans' Group Life Insurance (VGLI) lets you keep the life insurance you had through SGLI after you leave the military. VA explains that VGLI renews every 5 years for the rest of your life as long as you keep paying. Private term life, by contrast, ends when its term ends.

Sources: VA VGLI page and VA's VGLI comparison page.

How much does VGLI cost by age?

VGLI costs a set amount per $1,000 of coverage, and that amount jumps each time you enter a new 5-year age band.

VA's VGLI page lists monthly premium rates effective July 1, 2025. VA notes it doesn't charge more based on gender or tobacco use. Here is what two common coverage amounts cost under that table.

Rates change from time to time, so check the current VGLI rate table on VA.gov before you decide.

VA's September 16, 2026 announcement and its premium holiday FAQ explain the details. A 3-month break is welcome, but it doesn't change the long-term math below.

Why do VGLI premiums go up every 5 years?

VGLI is priced by age band, so each time you cross into a new 5-year band, your premium resets higher even if your health hasn't changed.

The jumps get steep after 50. Under the table above, $100,000 of coverage costs more than 4 times as much at ages 60 to 64 as it did at 45 to 49. VA itself notes, in its premium holiday FAQ, that rates rising every five years can create financial challenges for older veterans.

Private level term works the other way. The NAIC's consumer guide explains that some term policies keep the same price each year for a guaranteed period. The trade-off is that the insurer looks at your health first, and coverage ends when the term does.

Which costs less over 20 years?

To compare fairly, add up what VGLI would cost over every year you need coverage, then compare that total to a level-term quote for the same amount and length.

Here's an illustration using VA's July 1, 2025 rates. A hypothetical veteran buys $400,000 of VGLI at age 40 and keeps it until age 60, and rates don't change along the way.

That works out to an average of $112 a month. If a private 20-year level-term quote for $400,000 comes in below that average, the private policy costs less over the same period, and the gap widens if you keep coverage past 60. If your health, tobacco use, or medical history pushes a private quote above that number, or gets you declined, VGLI may be the better deal.

When is VGLI the better choice?

VGLI tends to win when your health or habits would make private coverage expensive or unavailable, or when you need coverage later in life that you can't get elsewhere.

VGLI often makes more sense if:

• You have a service-connected condition or other health issue that could raise private rates or lead to a decline.
• You use tobacco, since VGLI doesn't charge more for it.
• You want coverage you can keep for the rest of your life, not just for a set term.
• You need coverage in place right away while you shop for something else.

If you have a VA disability rating, also read about life insurance with a VA disability rating. You may qualify for VALife, which is covered in our guide to VALife eligibility and the 2-year waiting period.

When is private term life the better choice?

Private term life often costs less if you're in good health, don't use tobacco, and need coverage for a defined period, such as until your mortgage is paid off or your kids are grown.

A level price also makes budgeting easier. You'll know what you'll pay in year 1 and year 20. Private term may also fit better if you need more than $500,000, which is VGLI's cap.

The main risks are timing and health. Private insurers review your health, and VA points out that conditions may affect your eligibility. When the term ends, renewing or buying new coverage at an older age can cost much more.

Should you keep VGLI while you apply for private coverage?

Yes, in most cases it's wise to keep VGLI in force until a private policy is approved and active, so you're never left without coverage.

Private underwriting can take weeks, and approval isn't certain. If you let VGLI lapse first and then get declined, you may not be able to get it back easily. Once a new policy is in force, you can decide whether to keep VGLI, lower your VGLI amount, or cancel it.

If you're still within your SGLI conversion window, see SGLI to VGLI conversion deadlines so you don't miss the 240-day or 1-year-and-120-day mark.

Can you switch VGLI to a permanent policy later?

Yes. VA says you can convert VGLI to an individual permanent policy, such as whole life, at any time through participating insurance companies, without proving good health.

According to the VA VGLI page, the conversion is at standard premium rates. The new policy must be permanent; you can't convert to term, universal life, or variable life. You'll get a VGLI Conversion Notice from the Office of Servicemembers' Group Life Insurance (OSGLI) to give the new company. Permanent coverage usually costs more per dollar of coverage than term, so this option fits veterans whose health makes other permanent coverage hard to get.

How do you decide between VGLI and term life?

Start with the length of time you need coverage, then compare total cost under both options.

1. Decide how much coverage you need. Our life insurance calculator can help.
2. Decide how many years you need it, such as until retirement or until the mortgage is paid.
3. Add up VGLI's cost over those years using VA's current rate table.
4. Get level-term quotes for the same amount and length.
5. Keep VGLI active until any new policy is approved and in force.

For more veteran-specific guides, visit our veterans life insurance hub, including options for veterans over 60.