Service members and veterans rely on SGLI and VGLI to protect their families. These programs are designed to be simple, but beneficiary disputes under military life insurance are often more complex than disputes involving private or employer sponsored policies. Federal law controls SGLI and VGLI, which means state family law, divorce decrees and community property rules usually do not apply. This creates confusion for families and often leads to unexpected outcomes when competing beneficiaries make claims.
Understanding how federal rules apply is essential for anyone facing a dispute over SGLI or VGLI benefits.
Why SGLI and VGLI Beneficiary Disputes Are Different
SGLI and VGLI are governed by federal statutes, not state law. This means:
Federal law controls who gets paid
State court orders often have no effect
Divorce decrees may not override a written designation
Community property rules do not apply
Insurers must follow the designation on file, even if it conflicts with family expectations
This federal preemption is one of the most common sources of confusion for families who assume state law will protect them.
Divorce Decrees and Military Life Insurance
One of the most frequent disputes involves ex spouses. In many states, divorce automatically revokes an ex spouse as a beneficiary. That rule does not apply to SGLI or VGLI. If a service member forgets to update the designation after a divorce, the ex spouse may still receive the benefit.
Families often believe a divorce decree requiring the service member to name a child or former spouse as beneficiary will control. Under federal law, SGLI and VGLI must pay the person listed on the official designation, not the person listed in a state court order. This can lead to harsh results and significant litigation.
Disputes Involving Unmarried Partners or New Spouses
Another common conflict arises when a service member remarries but never updates the beneficiary form. The new spouse may assume they are entitled to the benefit, but SGLI and VGLI will pay the person listed on the last valid designation. This often leads to disputes between:
Current spouses
Former spouses
Children from prior relationships
Parents of the service member
Unmarried partners
Because federal law controls, courts have very limited ability to override the designation.
When No Beneficiary Is Listed
If a service member never names a beneficiary or the designation is invalid, federal law provides a strict order of precedence. Benefits may go to:
The spouse
The children
The parents
The executor or administrator
The next of kin
Families often dispute who qualifies under these categories, especially when blended families or estranged relatives are involved.
Fraud, Forgery and Unauthorized Changes
Although federal law is strict, it does not protect fraudulent or forged beneficiary changes. Disputes may arise when:
A signature appears inconsistent
A change was made shortly before death
A caregiver or partner is suddenly added
The service member lacked capacity
The form was submitted by someone else
These cases often require handwriting analysis, witness testimony or digital forensics.
Disputes Involving Deployed Service Members
Deployment creates unique challenges. Beneficiary changes may be:
Completed on outdated forms
Submitted through unofficial channels
Lost during transfer
Delayed due to administrative issues
When a service member attempts to update a beneficiary while deployed, substantial compliance arguments may apply, especially if the intent is clear.
VGLI Conversion Issues
When service members leave active duty and convert SGLI to VGLI, they may assume their beneficiary automatically carries over. In some cases, the conversion process creates:
Missing designations
Conflicting designations
Outdated designations
Administrative errors
These inconsistencies often lead to disputes between old and new beneficiaries.
How Families Can Strengthen a Claim
When a dispute arises under SGLI or VGLI, families should gather:
The most recent beneficiary designation
Any emails or letters showing the service member’s intent
Divorce decrees or custody orders
Evidence of fraud or coercion if suspected
Deployment records
Statements from friends or family
Any attempts to update the designation
Although federal law limits what courts can consider, strong evidence of intent or wrongdoing can influence the outcome.
Why These Disputes Require Specialized Knowledge
SGLI and VGLI disputes are governed by federal statutes, federal case law and strict administrative rules. Many attorneys unfamiliar with military life insurance mistakenly apply state law, which leads to incorrect advice and missed opportunities. Families need guidance from someone who understands how federal preemption works and how to challenge improper denials or interpleader actions.