Denied life insurance claims under Servicemembers Group Life Insurance and Veterans Group Life Insurance are more common than many families expect. Although both programs are designed to protect military families, they operate differently, and claims are denied for different reasons depending on whether coverage was under SGLI or VGLI.
Understanding how these programs differ is important for beneficiaries trying to make sense of a denial, delay, or beneficiary dispute. This article explains the structural differences between SGLI and VGLI and outlines why claims under each program are challenged.
The Difference Between SGLI and VGLI
SGLI provides life insurance coverage to active duty servicemembers, reservists, and certain National Guard members. Coverage is generally automatic unless the servicemember elects a lower amount or opts out. SGLI coverage ends shortly after separation from service.
VGLI is a separate program that allows eligible veterans to continue life insurance coverage after SGLI ends. Enrollment is optional and requires affirmative action by the veteran. Premiums must be paid directly, and coverage continues only as long as payments remain current.
Although both programs are administered by the Department of Veterans Affairs and handled through the Office of Servicemembers Group Life Insurance, the rules governing eligibility, lapse, and beneficiary rights are not identical.
Common Reasons SGLI and VGLI Claims Are Denied
Because both programs are federally administered, most denials arise from administrative issues rather than traditional insurance exclusions.
For SGLI claims, denials frequently involve:
Missing or outdated beneficiary designation forms
Conflicting military records regarding coverage status
Errors in service or separation documentation
For VGLI claims, denials more often involve:
Alleged lapse due to missed premium payments
Failure to convert SGLI to VGLI within the required timeframe
Disputes over eligibility or enrollment timing
While these categories overlap, the factual and legal analysis required is different depending on which program applies.
Denied SGLI Claims and Military Record Issues
SGLI coverage is intended to be automatic, but denials still occur due to recordkeeping problems. In some cases, beneficiary designation forms are missing, incomplete, or outdated. In others, servicemembers attempted to change beneficiaries, but the change was never properly recorded.
When no clear beneficiary designation exists, disputes can arise among surviving family members. These disputes may result in interpleader actions, where the insurer deposits the policy proceeds with the court and allows competing claimants to litigate entitlement.
Although SGLI is governed by federal law, courts sometimes must address whether state domestic relations issues intersect with federal beneficiary rules and whether those state laws are preempted.
Denied VGLI Claims and Enrollment or Lapse Issues
Unlike SGLI, VGLI coverage is not automatic. Veterans must apply within a defined period after separation and must continue paying premiums to keep coverage active.
Common VGLI denial scenarios include:
Missed deadlines to convert SGLI to VGLI
Gaps in premium payments
Address changes that disrupted billing notices
Administrative delays during enrollment
In many cases, beneficiaries are unaware of any problem until the claim is denied after death.
Why Federal Group Life Insurance Claims Are Treated Differently
Claims under SGLI and VGLI are governed by federal law under Title 38 of the United States Code. State insurance regulations and ERISA protections do not apply.
As a result:
Appeals must proceed through administrative channels
Courts generally review only the administrative record
Judicial review is limited and deferential
Because of this structure, how a claim is presented and documented during the administrative process often determines the outcome.
Beneficiary Disputes Under SGLI and VGLI
Beneficiary disputes are among the most difficult military life insurance cases. Under both SGLI and VGLI, the most recent valid beneficiary designation controls, even if it no longer reflects the insured’s current relationships.
Courts generally cannot override a valid federal designation based on fairness alone. Problems arise when a designation is missing, ambiguous, or allegedly invalid. In those situations, federal rules establish an order of precedence that may exclude partners or family members who expected to receive benefits.
How Families Use This Information
This page is intended to help beneficiaries understand the differences between SGLI and VGLI claims and why denials occur. The legal standards, evidence, and appeal strategies differ depending on which program applies.
Detailed guidance on challenging a denied claim, appealing a lapse determination, or resolving a beneficiary dispute is addressed separately on our denied SGLI and denied VGLI claim pages.
Frequently Asked Questions About SGLI and VGLI Claims
Can a denied SGLI claim be challenged if the beneficiary designation is unclear?
Yes. When designations are missing or ambiguous, federal regulations and supporting evidence are reviewed to determine entitlement.
What happens if SGLI was not converted to VGLI on time?
VGLI eligibility generally ends one year and 120 days after separation. Claims may be denied if conversion did not occur within that window, though some disputes involve misinformation or administrative error.
Can VGLI coverage lapse due to a missed premium?
Yes. VGLI requires ongoing premium payments, and missed payments can cause lapse, subject to any applicable grace period.
Do state laws affect SGLI or VGLI claims?
Generally no. Federal law governs both programs and preempts most state rules.
Is there an appeal process for denied SGLI or VGLI claims?
Yes. Appeals proceed through the administrative process, and limited court review may be available after exhaustion.