Q2. You have paid for an item with a check; however,you don’t have enough money in your checkingaccount to cover the check. What is the result ofthis action?Q3. You are having money taken out of your pay tomake loan payments. What type of allotment areyou making?Q4. What’s the first thing you should plan for whenmaking out a budget?Q5. The money charged for using borrowed moneyor using credit is known as—Q6. If total charges of a loan or purchases agreementare not listed, what is a simplest way to find thetotal cost of credit?Q7. How do you establish a good credit rating?GOVERNMENT-SUPERVISED LIFEINSURANCELearning Objective: When you finish this chapter, youwill be able to—Recognize the purpose of life insurance.The government has provided premium-free orlow-cost life insurance for service members andveterans since World War I. Since 1919, variousinsurance programs have been offered as insuranceneeds have changed over the years.SERVICEMEN’S GROUP LIFEINSURANCEServicemen’s Group Life Insurance (SGLI) is alow-cost group insurance program open to active-dutypersonnel without regard to special qualifications, suchas disability. You may secure SGLI only in incrementsof ,000, up to a maximum of 0,000. You areautomatically issued the 0,000 coverage, unless youchoose a lower amount. The cost of SGLI is deductedautomatically from your pay.Unlike some commercial insurance policies, SGLIhas no loan, paid-up, or cash-surrender value. In otherwords, you can’t borrow money against this insurance;if you stop payment on the policy or cancel it, you willreceive neither paid-up insurance nor cash.SGLI coverage continues for 120 days after yourseparation. If you are separated for a disability,coverage may be extended up to 1 year after yourseparation date.VETERANS GROUP LIFE INSURANCEThe Veterans Insurance Act of 1974 established aprogram of post-separation insurance called VeteransGroup Life Insurance (VGLI). That act provides for theautomatic conversion of SGLI to a 5-year nonrenewableterm policy at reasonable rates and with a “no physicalexam” advantage. That is, you can have insurancecoverage at reasonable rates for 5 years after youseparate from the Navy. You can convert the policy atany time during that 5 years to a commercial insurancepolicy with the same amount of coverage without aphysical examination. Like SGLI, the Office ofServicemen’s Group Life Insurance (OSGLI)administers the VGLI program, and the Veterans’Administration supervises it.You can get VGLI coverage in amounts equal to, butnot exceeding, the amount of SGLI in force at the timeof your separation. This insurance, like SGLI, has nocash, loan, paid-up, or extended insurance value.REVIEW 3 QUESTIONSQ1. You can secure SGLI in what increments?17-15Student Notes:
Integrated Publishing, Inc. - A (SDVOSB) Service Disabled Veteran Owned Small Business
