What Happens to Your Military Insurance When You Retire? Here’s the Truth

The transition from active duty to retirement is an exciting and significant milestone in a service member’s life, but it also comes with a range of changes—especially when it comes to insurance coverage. One of the most important aspects of this transition is understanding how your military insurance will change once you retire. Your health care, life insurance, dental and vision coverage, and other benefits may look different, and it’s crucial to be prepared for these changes to ensure continued protection for you and your family.

As a retiree, you no longer have access to the same benefits that active-duty service members do, but there are still many options available to ensure your financial security and well-being. The key is knowing how to navigate these changes and which programs are available to you after you retire.

This blog aims to provide clarity on military insurance after retirement, helping you understand your options, the steps you need to take, and how to make sure you maintain adequate coverage. Whether it’s transitioning from TRICARE to TRICARE for Life, converting life insurance, or exploring new benefits, we’ll walk you through the process so you can enter retirement with peace of mind, knowing that you and your family are protected.

The Basics of Military Insurance Before Retirement

Before transitioning to retirement, active-duty service members enjoy a variety of robust insurance benefits designed to protect their health, life, property, and income. The primary types of military insurance include:

• TRICARE: Military health insurance that covers service members, their families, and retirees. There are different plans available based on eligibility, such as TRICARE Prime, TRICARE Select, and TRICARE for Life, which is available after retirement. Active-duty members and their families typically pay little to no out-of-pocket costs for coverage under these plans.
• Service Members’ Group Life Insurance (SGLI): A life insurance program providing affordable coverage for active-duty members. It offers up to $400,000 in coverage, with premiums automatically deducted from a member’s pay.
• Family Servicemembers’ Group Life Insurance (FSGLI): This life insurance program covers spouses and dependent children of service members enrolled in SGLI. It provides up to $100,000 of coverage for spouses and $10,000 for dependent children, ensuring financial protection for the whole family.

These benefits, along with others such as dental and vision coverage, are offered to active-duty service members and their families as part of their military service. However, when you retire, these benefits will change, and it’s essential to understand what happens next and how to plan ahead.

Key Changes After Retirement

When you retire from active duty, several key changes occur in your insurance coverage:

• Health Insurance: After retirement, your health insurance options shift from active-duty TRICARE plans to TRICARE for Life (TFL) if you are eligible. Unlike active-duty members who often have free or low-cost health insurance, retirees are responsible for paying premiums for certain plans and may face additional out-of-pocket costs.
• Life Insurance: While active-duty service members are covered by SGLI, retirees can convert this coverage to Veterans’ Group Life Insurance (VGLI). This coverage is portable, meaning you can keep it after retirement, but the premiums increase as you age.
• Other Coverage: Additional benefits such as dental, vision, and disability compensation are no longer automatically included. You will need to explore options like the TRICARE Retiree Dental Program (TRDP) or purchase other private insurance plans to ensure adequate protection.

Transition Period

The transition to retirement is an ideal time to evaluate your insurance needs and make necessary adjustments. It’s recommended that you start exploring retirement insurance options about 6-12 months before your retirement date to avoid any gaps in coverage. Understanding your new insurance options will help you make informed decisions and ensure that both you and your family remain protected.

TRICARE After Retirement

TRICARE is the cornerstone of military health insurance, and while it provides comprehensive coverage during your active-duty years, retirees will experience some changes:

• TRICARE for Life (TFL): Once you reach the age of 65, you become eligible for TRICARE for Life, which works alongside Medicare. TFL is designed to cover the costs of Medicare’s out-of-pocket expenses, such as deductibles, coinsurance, and copayments. For retirees under 65, TFL is available if you have Medicare Part A and are enrolled in Medicare Part B.
• Differences Between TRICARE Prime, Select, and TFL: Before retirement, you may be enrolled in either TRICARE Prime or TRICARE Select. Both offer excellent health coverage but differ in terms of cost and provider networks. After retirement, TFL becomes the primary health insurance option for those who are eligible for Medicare. It’s important to note that TFL is only available to retirees who are Medicare-eligible and have enrolled in both Medicare Part A and Part B.
• Eligibility for Spouses and Dependents: Your spouse and eligible dependents are also eligible for TRICARE after your retirement. The type of coverage they receive will depend on their enrollment status and whether they are covered under TRICARE Prime, Select, or the family member version of TRICARE for Life. Be sure to review the plans available for your dependents and make adjustments as necessary.

Life Insurance After Retirement

As a retiree, your life insurance options change significantly. Active-duty members have access to SGLI, which provides substantial coverage. However, once you retire, you’ll need to convert this coverage to Veterans’ Group Life Insurance (VGLI). Here’s how it works:

• SGLI to VGLI Conversion: SGLI coverage automatically ends upon retirement, but you can convert it to VGLI within 240 days of separation from service. The premiums for VGLI are based on age and coverage amount, and while the rates are competitive initially, they increase as you get older.
• Coverage Limits and Options: VGLI provides coverage up to $400,000, the same amount as SGLI, but the cost of premiums increases with age. It’s important to assess whether you need additional coverage after retirement, considering any financial responsibilities or life goals.
• Beneficiary Updates: After retirement, it’s crucial to update your beneficiaries on your life insurance policy, particularly if your family dynamics have changed (e.g., a new spouse, children, or grandchildren). This will ensure your loved ones are taken care of in the event of your death.

Dental and Vision Insurance Options

Dental and vision coverage are not automatically included in retirement. However, there are options available:

• TRICARE Retiree Dental Program (TRDP): Although the TRDP program is no longer accepting new enrollments, retirees can still opt into the Federal Employees Dental and Vision Insurance Program (FEDVIP). It provides a range of dental and vision plans for military retirees and their families.
• Enrollment Periods and Costs: Keep in mind that there are specific enrollment windows for dental and vision coverage, so it’s important to act quickly after retirement. The premiums for dental and vision plans vary depending on the level of coverage selected.

Disability Benefits After Retirement

Many retirees are eligible for disability compensation through the U.S. Department of Veterans Affairs (VA), which can provide financial assistance for service-connected injuries or illnesses:

• Eligibility for VA Disability: If you were injured or became ill during your service, you may be eligible for VA disability compensation. This benefit is based on your disability rating and can provide monthly payments.
• Applying for VA Disability Benefits: Retirees must apply for VA disability benefits separately, and it’s essential to begin this process early in your retirement to avoid delays in receiving compensation. Retirees with disabilities that are not service-connected may be eligible for other forms of support.
• Supplemental Disability Insurance: In addition to VA disability compensation, retirees may also want to consider purchasing supplemental disability insurance to protect against non-service-related illnesses or injuries.

Other Insurance Considerations for Retirees

Retirees should also consider reviewing their home and auto insurance to ensure they are getting the best rates and coverage. Many insurance providers offer discounts for veterans, so be sure to ask about these special offers. Additionally, updating policies to reflect any changes in your life circumstances (such as a new address or changes in family members) is important to avoid gaps in coverage.

Key Steps to Take Before and After Retirement

To ensure you maintain comprehensive coverage after retirement, take these critical steps:

1. Review Insurance Options Early: Start reviewing your retirement insurance options 6-12 months before your retirement date. This gives you ample time to research and make decisions on the best plans for you and your family.
2. Ensure Continued Coverage for Spouses and Dependents: Check that your spouse and dependents are added to your new insurance plans and that their coverage needs are met.
3. Update Beneficiaries and Contact Information: Make sure to update your beneficiaries and personal information for your life insurance, retirement plans, and any other policies.
4. Consult with a Professional: Seek advice from a financial planner or insurance expert to help you navigate the complexities of post-retirement insurance.

By taking these proactive steps, you can ensure that your insurance coverage remains strong and effective as you transition into retirement.

FAQs

1. Can I keep my TRICARE coverage after I retire?

Yes, you can continue to have TRICARE coverage after you retire, but it will transition to TRICARE for Life (TFL) once you turn 65, provided you are eligible for Medicare Part A and Part B. TRICARE for Life is designed to work alongside Medicare, covering most of the out-of-pocket expenses Medicare doesn’t cover. If you’re under 65, you can still access TRICARE Prime or TRICARE Select, depending on your eligibility. However, there may be premiums and copays associated with these plans, so it’s important to review your options well in advance of retirement.

2. How do I convert my SGLI to VGLI after retirement?

When you retire from active duty, your Service Members’ Group Life Insurance (SGLI) automatically ends. However, you have the option to convert this to Veterans’ Group Life Insurance (VGLI). You must apply for VGLI within 240 days of your retirement or separation to ensure continuous coverage. This conversion is guaranteed, regardless of health status, but premiums will increase as you age. The coverage limit remains up to $400,000, and you can convert your full SGLI coverage to VGLI or choose a lower amount. Be sure to apply promptly to avoid a gap in coverage.

3. Will I still have access to dental and vision insurance once I retire?

Once you retire, dental and vision insurance are not automatically provided. However, you can enroll in the Federal Employees Dental and Vision Insurance Program (FEDVIP), which offers a variety of dental and vision plans for military retirees and their families. You will need to enroll during the open season or qualifying life events, such as retirement. These plans have premiums and coverage options that vary, so it’s a good idea to review the available plans and costs to find the best fit for you and your family.

4. How do I apply for VA disability benefits after retirement?

Applying for VA disability benefits after retirement involves submitting a claim to the U.S. Department of Veterans Affairs (VA). If you have a service-connected disability, you may be eligible for compensation. The process typically begins by filing a claim online through the VA’s eBenefits portal or by visiting a VA office. You will need to provide documentation supporting your disability and its connection to your military service. After you apply, the VA will schedule a disability exam to assess the severity of your condition. Be prepared for this process to take several months, and consider seeking assistance from a veterans’ service organization to help guide you through the application.

Conclusion

As you transition from active duty to retirement, understanding how your military insurance benefits change is crucial to ensuring that you and your family maintain comprehensive coverage. From transitioning TRICARE to TRICARE for Life, to converting your SGLI to VGLI, and securing dental, vision, and disability benefits, there are several key steps to take in order to maintain continuous protection.

To help ensure you’re covered, it’s essential to plan ahead. Review your insurance options 6 to 12 months before retirement, explore available coverage options, and update all necessary details—such as beneficiaries and contact information. Take full advantage of the resources and benefits available to you as a retiree, and don’t hesitate to seek professional advice from financial planners, military insurance experts, or VA representatives.

Planning now not only prevents coverage gaps but also provides peace of mind as you navigate your post-retirement life. By staying informed, making timely adjustments, and fully utilizing your military insurance benefits, you can ensure that you and your loved ones remain financially secure long after your military career ends.