Premium rates for Servicemembers' Group Life Insurance (SGLI) are changing effective 1 July 2014.
The new SGLI premium rate is 7 cents per month per $1,000 of coverage. This increases the monthly premium rate for a member with maximum coverage of $400,000 from $27.00 to $29.00. (The premium includes an additional $1.00 per month for Traumatic Injury Protection coverage (TSGLI), which is mandatory and added automatically.).
Why is the SGLI premium going up? On 1 July 2008 the basic SGLI premium rate was lowered from 7 cents per month per $1,000 to 6.5 cents per month per $1,000 in order to reduce the SGLI contingency reserve (the program's net financial position) to its target level. As a result of the temporary premium reduction and the decline in investment income, the contingency reserve has now reached its target level. Unless the SGLI premium rate is adjusted back to 7 cents per month per $1,000, the contingency reserve will continue to decline, which would negatively impact the financial stability of the program.
What do I need to do? Active members and members of the Selected Reserve, don't need to take any action. They will see a change in the deduction from their pay in the Mid-Month July 2014 payday (15 July 2014).
Reservists drilling for points only or not receiving pay for other reasons will need to account for the higher premium in their payments (made in accordance with section 5.A.2.6. of the Personnel and Pay Procedures Manual, PPCINST M1000.2 (series)) beginning in July 2014.
SGLI Premium Rates Effective 1 July 2014
| Coverage Amount | Basic Premium Rate | TSGLI Premium | Total Monthly Premium Deduction |
|---|---|---|---|
| 50,000 | $3.50 | $1.00 | $4.50 |
| 100,000 | $7.00 | $1.00 | $8.00 |
| 150,000 | $10.50 | $1.00 | $11.50 |
| 200,000 | $14.00 | $1.00 | $15.00 |
| 250,000 | $17.50 | $1.00 | $18.50 |
| 300,000 | $21.00 | $1.00 | $22.00 |
| 350,000 | $24.50 | $1.00 | $25.50 |
| 400,000 | $28.00 | $1.00 | $29.00 |