Denied claims under Servicemembers Group Life Insurance and Veterans Group Life Insurance raise issues that are very different from private or employer based life insurance disputes. These programs are federal benefits tied directly to military service and veteran status, and claim outcomes are often driven by paperwork, timing, and federal rules rather than traditional insurance exclusions. Because of that, misunderstandings about how SGLI and VGLI work can lead families to confusion when a claim is delayed or denied.
This guide is intentionally focused on the structural and procedural differences between SGLI and VGLI so beneficiaries can understand why a denial occurred and why the analysis is different depending on which program applied.
Understanding the Structural Difference Between SGLI and VGLI
SGLI is designed to provide automatic life insurance protection while a servicemember is on active duty or in qualifying reserve or National Guard status. Coverage is typically automatic, and premiums are deducted from military pay unless the servicemember elects a lower amount or declines coverage. The system assumes coverage unless there is documentation showing otherwise.
VGLI, by contrast, is an optional continuation of coverage after military separation. Once SGLI ends, the veteran must affirmatively apply for VGLI and must keep the policy active through direct premium payments. Coverage does not continue automatically, and there is no payroll deduction to catch missed payments.
Although both programs are overseen through the same federal framework, they operate very differently in practice. That distinction is central to understanding why claims are denied.
Why SGLI Claims Are Denied
Denied SGLI claims most often trace back to military record issues rather than questions about the cause of death. Because coverage is automatic, insurers and administrators usually focus on whether coverage existed on the date of death and who was legally entitled to receive the proceeds.
Common SGLI denial or dispute scenarios include outdated beneficiary designations, missing designation forms, or conflicting information across service records. In some cases, a servicemember intended to update a beneficiary after marriage, divorce, or the birth of a child, but the change was never properly processed. In others, the designation exists but is incomplete or unclear.
Another recurring issue involves separation dates. SGLI coverage does not end immediately upon separation, but confusion about the precise termination date can lead to disputes over whether coverage was still in force at the time of death. Administrative errors in discharge paperwork or personnel records can contribute to these denials.
Why VGLI Claims Are Denied
VGLI denials tend to revolve around enrollment and payment issues rather than beneficiary designations. Because VGLI requires affirmative action by the veteran, many denials occur when the conversion from SGLI to VGLI was not completed within the required timeframe.
Veterans generally have one year and 120 days after separation to convert SGLI to VGLI. Claims are often denied when the application was submitted late, incomplete, or never processed due to administrative delays. In some cases, veterans believed they were covered because they submitted paperwork, but no policy was actually issued.
Premium payment issues are another major source of VGLI denials. Unlike SGLI, VGLI requires direct monthly payments. Address changes, banking changes, or missed notices can lead to lapses that are not discovered until after death. Beneficiaries are frequently unaware of any lapse until a denial letter arrives.
Administrative Nature of Federal Life Insurance Denials
Both SGLI and VGLI are governed exclusively by federal law. State insurance statutes, consumer protection laws, and ERISA rules do not apply. This creates a very different claim environment from private life insurance.
Most disputes are resolved through an administrative review process rather than traditional litigation. The administrative record becomes critically important, because courts that later review these cases generally limit their analysis to what was presented during the administrative phase.
This structure means that documentation, timelines, and written submissions carry enormous weight. A claim that appears straightforward can fail if the administrative record does not clearly establish coverage or beneficiary entitlement.
Beneficiary Disputes Under Federal Military Life Insurance
Beneficiary disputes are especially complex under SGLI and VGLI because federal law gives controlling weight to the most recent valid beneficiary designation on file. Courts generally cannot override that designation based on fairness, hardship, or family expectations.
Problems arise when a designation is missing, ambiguous, or challenged as invalid. When no valid designation exists, federal regulations impose an order of precedence that may result in payment to someone the insured did not intend, such as estranged relatives or individuals from earlier relationships.
These disputes sometimes lead to interpleader actions, where the insurer deposits the proceeds and allows competing claimants to litigate entitlement under federal standards.
Why SGLI and VGLI Claims Require Separate Analysis
Although both programs fall under the same federal umbrella, the factual and legal questions involved in SGLI denials are not the same as those involved in VGLI denials. SGLI disputes tend to focus on military records and beneficiary forms, while VGLI disputes focus on conversion timing, enrollment status, and premium payments.
Understanding which program applies is the first step in determining why a claim was denied and what evidence matters most. Treating these claims like ordinary life insurance disputes often leads to missed issues and lost opportunities.
How This Guide Fits With Other Resources
This guide is intentionally limited to explaining how SGLI and VGLI differ and why denials occur under each program. Detailed discussions of appeal strategies, lapse challenges, beneficiary litigation, and administrative review procedures are addressed separately on our dedicated denied SGLI claim and denied VGLI claim pages.
Frequently Asked Questions About SGLI and VGLI Claims
Can a denied SGLI claim be reviewed if beneficiary paperwork is unclear
Yes. When forms are missing or ambiguous, federal regulations and supporting service records are reviewed to determine entitlement.
What happens if SGLI was not converted to VGLI on time
VGLI eligibility generally expires one year and 120 days after separation. Claims are commonly denied if conversion did not occur within that window, though some disputes involve administrative error or misinformation.
Can VGLI coverage lapse due to missed premiums
Yes. VGLI requires ongoing premium payments, and missed payments can result in lapse after any applicable grace period.
Do state laws apply to SGLI or VGLI disputes
No. Both programs are governed by federal law, which preempts most state rules.
Is there an appeal process for denied SGLI or VGLI claims
Yes. Claims proceed through an administrative appeal process, and limited judicial review may be available after administrative remedies are exhausted.