Veterans who are over a certain age could soon find that their coverage is becoming more costly.
According to a statement that has been released by Veterans Affairs Department officials, as of July 1, 2014, older vets will find themselves facing higher life insurance premiums for their Veterans Group Life Insurance policies.
The increase will apply only to vets who are aged 70 years and older and it will be for 2.2 percent.
This life insurance rate increase is the first one to have been put into place for veterans in 21 years, said the department officials. This will mean that for every $1,000 of monthly coverage, affected policyholders will be paying 5 cents more. To illustrate the point, in the example of a veteran who is aged 70 or more and who has VGLI coverage for $50,000, he or she will be paying $2.50 per month more than the previous premiums, bringing it from $112.50 to $115.
The increases for life insurance for veterans aged 50 and older will be slightly higher.
In the same example of a monthly cost for coverage of 50,000, a veteran who is aged 75 or higher will be seeing a bill that is $5 more, bringing it from $225 to $230. The coverage available through VGLI is offered in increments of $10,000 up to a highest possible coverage of $400,000. The monthly premiums within this program are based on age, and they rise every five years up to the age of 75 years old. At that point, there is a cap on the rate and it will not increase any further, no matter how long the veteran lives.
Veterans who have the maximum coverage of $400,000 and who are aged 75 more will find that their premiums will rise in July from having been $1,800 per month in order to become $1,840 per month.
A fact sheet that was provided by the Department of Veterans Affairs regarding these life insurance rates explained that “Older veterans have been paying premiums at a rate that is below what it costs to provide coverage.” It then added that “In fairness to veterans of all ages insured under VGLI, and in order to keep the program financially strong and competitive, we have to bring the rates more in line with the cost of claims at those ages.”