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S-DVI

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x020574

Question

I'm still a bit confused with S-DVI and VetLife. I have S-DVI with waived premiums which, as I understand it, it is similar to a whole life policy with a 10k benefit. I understand it is good that I have that because the full force of VetLife is is not payable until after 2 yrs. Knowing that, if I signed up for 40k benefit from VetLife would my beneficiary (wife), after 3 years be entitled to 40k + 10K?

 

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Yes.  An insurance policy is a contract.  If you have a contract to buy a car (payments) and you buy an additional car (with payments), then you owe for both, under the terms of the individual contracts.   

Ditto for insurance.  Many people have multiple life insurance policies, sometimes taken out in different years or even decades.  

An exception is something like auto insurance.  If you have 4 auto polices on the same car, in force at the same time, you wont  be collecting 4x the cars value, at best, you will collect the cars value if in a crash.  Auto insurance is designed so that you cant profit by wrecking your car.  Its supposed to "put you in the place you were before the wreck" minus applicable deductables.  

You mentioned "whole life" insurance..agents sometimes refer to this as "owned insurance", while term insurance is "rented insurance" which you never own, you just get to use it for the period of the term.  If, you live longer than the term, in term insurance, the policy dies, and generally, you get 0.  (There may be exceptions as some term policies may build some residual cash value.  If in doubt, call VA life, ask to speak to an agent, and ask them to explain your insurance.  

Like yourself, I am adding some additional coverage to my already 10,000 "free" life insurance.  (waiver of premiums).  VA is not the only company with waiver of premium, many companies offer it.  You take out a life insurance policy, with waiver of premiums in the event of disability, and, if you get disabled, the insurance company pays your premiums.  

With VA life, you can get 10,000 whole life, with waiver of premiums AFTER you are already disabled, and its designed that way.  Thats a big deal.  Its like buying car insurance AFTER you have an accident, and they pay.  (Dont try buying car insurance after an accident, (expecting it to cover your accident you just had, It can land you up in jail for insurance fraud.). 

    My VA whole life policy mails me a statement each year, around my birthday.  It shows the loan value, and cash surrender value, which increases each year.  Mine is called a "whole life..20 pay life".  That means you pay for 20 years, (well, VA life pays), and the policy is "paid up" and can be surrendered for 10,000 in cash, even while you are alive.  Of course, if you surrender it, and get the 10,000, your heirs will no longer get the death benefit.  

    Perhaps a smarter way, if you need money, is to borrow money out of your whole life insurance policy.  Example:

    Lets say you have had the 10,000 whole life for 14 years, and lets further guess it has a cash value of 5000, with a loan value of 4800.   You borrow the full 4800, and make no payments at all paying it back, and you pass away.  

    Your heirs, in this example get the 10,000 minus any loans.  (Life insurance loans are around 5 percent, if I recall, but check your policy).  So, if you owed 4800 and interest was $100, then your family would get the difference, $5100.  (policy face amount, minus loan (including interest) or 10,000 minus 4900 equals 5100. 

    This is why it could be in your best interest to borrow money against a whole life policy vs surrender for cash value.  In the above example, your family would get an additional 5100, which they would not get if you surrendered the policy for cash.  

    Veterans (or other whole life policy holders), can access sometimes much needed cash through their life insurance policy.  Again, if you are in doubt, contact the company that has your life insurance policy.  

    

 

Edited by broncovet
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Sorry I and other did not see this until now. Make sure you keep your S-DVI for obvious reasons. My own story is I applied for S-DVI. Because I have had skin cancer over a year before and never service connected it. (yet) I had other non SC health issues that I did not list. They denied my application. this was I think in August last year before they announced the "new" VetLife. So, I am not a fan of VA insurance.

I am also not a fan of whole life policies. They cost 2x more than a term policy and most have that 2 year waiting time before it pays. It also will not pay the full amount if there is something in your medical records that you did not tell them about. I personally know of someone who had a whole life policy on his wife and it was right at the 2 year mark who suddenly died of a brain aneurysms and the Co. denied the claim.

In my opinion the VA went to VetLife just to do the above because most of us are getting older and they are going to start having to pay out on S-DVI.

To answer your question assuming you had the S-DVI  for some time. You S-DVI would pay the 40k if you passed away today. The VetLife would pay 2 years after the date you signed up for it (or should) regardless of what you passed away from. hope this helps. 

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I too got the s-dvi life insurance after I was increased. However I still need and have been requesting a copy of my coverage. The new Va life insurance stuff is a scam in my opinion the rates are too high and this is another way the Va can make money. There are cheaper life insurance policies to invest in and I won’t be doing the new Va life insurance unless it is free.

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