Q2. You have paid for an item with a check; however,
you don’t have enough money in your checking
account to cover the check. What is the result of
this action?
Q3. You are having money taken out of your pay to
make loan payments. What type of allotment are
you making?
Q4. What’s the first thing you should plan for when
making out a budget?
Q5. The money charged for using borrowed money
or using credit is known as—
Q6. If total charges of a loan or purchases agreement
are not listed, what is a simplest way to find the
total cost of credit?
Q7. How do you establish a good credit rating?
GOVERNMENT-SUPERVISED LIFE
INSURANCE
Learning Objective: When you finish this chapter, you
will be able to—
Recognize the purpose of life insurance.
The government has provided premium-free or
low-cost life insurance for service members and
veterans since World War I. Since 1919, various
insurance programs have been offered as insurance
needs have changed over the years.
SERVICEMEN’S GROUP LIFE
INSURANCE
Servicemen’s Group Life Insurance (SGLI) is a
low-cost group insurance program open to active-duty
personnel without regard to special qualifications, such
as disability. You may secure SGLI only in increments
of ,000, up to a maximum of 0,000. You are
automatically issued the 0,000 coverage, unless you
choose a lower amount. The cost of SGLI is deducted
automatically from your pay.
Unlike some commercial insurance policies, SGLI
has no loan, paid-up, or cash-surrender value. In other
words, you can’t borrow money against this insurance;
if you stop payment on the policy or cancel it, you will
receive neither paid-up insurance nor cash.
SGLI coverage continues for 120 days after your
separation. If you are separated for a disability,
coverage may be extended up to 1 year after your
separation date.
VETERANS GROUP LIFE INSURANCE
The Veterans Insurance Act of 1974 established a
program of post-separation insurance called Veterans
Group Life Insurance (VGLI). That act provides for the
automatic conversion of SGLI to a 5-year nonrenewable
term policy at reasonable rates and with a “no physical
exam” advantage. That is, you can have insurance
coverage at reasonable rates for 5 years after you
separate from the Navy. You can convert the policy at
any time during that 5 years to a commercial insurance
policy with the same amount of coverage without a
physical examination. Like SGLI, the Office of
Servicemen’s Group Life Insurance (OSGLI)
administers the VGLI program, and the Veterans’
Administration supervises it.
You can get VGLI coverage in amounts equal to, but
not exceeding, the amount of SGLI in force at the time
of your separation. This insurance, like SGLI, has no
cash, loan, paid-up, or extended insurance value.
REVIEW 3 QUESTIONS
Q1. You can secure SGLI in what increments?
17-15
Student Notes:
