Frequently Asked Questions On The SGLI Coverage Increase to $400,000 FAQ

1. Why was the SGLI coverage automatically increased for all Airmen to $400,000 on 1 Sep 05 without the member's written consent?
2. How much will SGLI increase?
3. Who will be affected?
4. What coverage amount will be available?
5. Will I need to fill out a new SGLI form?
6. What if I don't want the maximum coverage of $400,000?
7. What if I complete the SGLV 8286 on or after 1 Oct 05?
8. When will the new SGLV 8286 be available? And where I can I get one?
9. As a married member, can I designate a primary beneficiary other than my spouse?
10. How will the increase affect Veteran Group Life Insurance (VGLI) members?
11. Will the Family Servicemembers' Group Life Insurance (FSGLI) also increase?
12. What actions will be performed by the Personnel (MPF, CSS or PERSCO)?
13. Why is this new SGLI coverage automatic without my written consent?
14. Why does Congress put the responsibility on service members to make a new coverage election if declining or reducing coverage every time the maximum SGLI benefit is increased?

GUIDANCE ON INCREASE SGLI COVERAGE TO $400,000 EFFECTIVE SEPTEMBER 1, 2005

GENERAL

On the effective date, all members eligible for SGLI at that time will become insured for the maximum coverage of $400,000 until they make a valid election on or after the effective date to reduce or decline coverage. The new SGLV 8286 will not be made available until August 31, 2005. These changes will not affect coverage under Family SGLI (FSGLI). Such coverage and limitations on such coverage continue under previously existing rules.

Likewise, beginning on the effective date, all members who become newly eligible for SGLI will have $400,000 in coverage until they make a valid election to reduce or decline coverage. The monthly SGLI premium remains $3.25 per $50,000 of coverage. Therefore, $26.00 will become the monthly premium for full coverage beginning in September 2005.

Section 1012 of P.L. 109-13, expires September 30, 2005. Further, it enacts other provisions which are not implemented in this guidance. These provisions are being ignored because of their perishable nature and the expectation that a replacement law will be enacted in September and be effective retroactively to September 1, 2005. We also expect section 1012 of P.L. 109-13, to be repealed effective retroactively to September 1, 2005. The new law is expected to contain only the above changes (Increase to $400,000 in $50,000 increments) as well as a requirement for spousal notification when a member designates someone else as a primary SGLI beneficiary. Therefore, the provisions being implemented are those expected to become permanent effective as of September 1, 2005.

ELECTIONS ON OR AFTER SEPTEMBER 1, 2005

Designation of Beneficiaries: Existing beneficiary designations remain effective in the same proportion to $400,000 as the proportion of total benefits such beneficiary was designated to receive under the last valid SGLV 8286. Such beneficiary proportional designations remain effective until a new SGLV 8286 (September 2005 version) is properly completed on or after September 1, 2005.

Married Members Designation of a Beneficiary other than their Spouse: If a married member designates a primary beneficiary for their SGLI coverage other than their current lawful spouse, including an initial election upon becoming eligible for coverage, on or after September 1, 2005, the member's spouse will be informed that the member has made such a designation. Such advisory should be made as quickly as possible (objectively within 30 days of the date such election is submitted by the member), but such notice shall not include the name(s) of the actual designated beneficiary (ies). Notices shall be sent by first class postal service to the spouse's current address of official record (DEERS).

Premium Liability: Should a member desire less than the automatic maximum coverage, that member should complete a new SGLV 8286 (September 2005 version) indicating the amount of coverage desired (including no coverage if applicable) and submit that election as soon as possible. If such a member properly completes and submits the form before September 30, 2005, the ember will not be liable for the September 2005 premium associated with the reduced or declined portion of coverage. This gives members 30 days to reduce or decline unwanted coverage without charge. Units should process elections as expeditiously as possible to avoid the necessity for corrections in financial transactions.

Elections after September 30, 2005: A member who does not make an election to reduce or decline coverage from the $400,000 level before October 1, 2005, will be charged for the full $400,000 of coverage for September as well as for any other month in which the level of coverage remains in effect. When a member properly completes and submits SGLV Form 8286 on or after October 1, 2005, to reduce or decline coverage, such reduction is effective the first day of the month after such form is properly submitted. Therefore, the member remains liable for the full premium through the end of the month in which the election was filed.

RESPONSIBILITIES:

EXAMPLES

Question: Why was the SGLI coverage automatically increased for all Airmen to $400,000 on 1 Sep 05 without the member's written consent?

Answer. Section 1012 of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Tsunami Relief, 2005 (Public Law 109-13, 11 May 05) increases the Servicemembers' Group Life Insurance maximum coverage to $400,000 effective 1 Sep 05. By law, all Airmen are automatically insured for $400,000 and may decline or reduce coverage in increments of $50,000.

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Question: How much will SGLI increase?

Answer: The maximum SGLI coverage will be increased from $250,000 to $400,000 effective 1 Sep 05. The 6.5 cents per $1,000 coverage remains the same and coverage election increments will change from the current $10,000 to $50,000.

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Question: Who will be affected?

Answer: By law, anyone in the service on 1 Sep 05 will have their coverage increased to $400,000, even if they previously declined or elected lesser coverage. If they still desire no coverage or less than the maximum, they will have to make a new election.

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Question: What coverage amount will be available?

Answer. Members can only elect coverage in increments of $50,000. Previously, members could elect coverage in increments of $10,000. Therefore, the only SGLI coverage amounts available will be:

$50,000	$100,000	$150,000	$200,000
$250,000	$300,000	$350,000	$400,000

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Question: Will I need to fill out a new SGLI form?

Answer: You will need to fill out a new form if:

1. You reduce your coverage
2. You decline coverage
3. Want to update/change your beneficiary designation(s)

IMPORTANT NOTE: If you are a married member and designate a primary beneficiary other than your current lawful spouse, or elect to decline or reduce SGLI coverage after 1 Sep 05, the new law now requires your spouse be notified. MPFs are responsible for ensuring an advisory notification letter is sent to your spouse.

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The completed form SGLV 8286 serves as the basis for payroll deductions or authorizing collections in a reduced amount or none at all.

Two copies of the form SGLV 8286 are filed in Section I of the member's UPRG, after completion of the JUMPS transaction update, and a copy provided to the member.

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Page Updated on: 25 August 2005