VALife Insurance: A Costly Mistake For Veterans
last updated on November 10, 2025Veterans Affairs Life Insurance, better known as VALife, is a government-run whole life insurance program offered through the U.S. Department of Veterans Affairs that all veterans should avoid if at all possible.
It was launched to replace the older Service-Disabled Veterans Insurance (S-DVI) program, which stopped accepting new applications in December 2022.
VALife was designed to make life insurance “easier” for veterans with service-connected disabilities. But, as many veterans would say, be extremely skeptical when you hear someone say “we’re here from the government to help you!
(If you’d like to get answers before reading, call the Final Expense Guy directly at 888-862-9456)
HOW VALife WORKS FOR VETERANS
VALife is a whole life policy with a fixed death benefit and lifetime premium payments. The core promise is that your coverage never expires as long as you continue paying premiums.
However, there’s a MANDATORY two-year waiting period before the full death benefit becomes active.
If you pass away during that waiting period, your beneficiary won’t receive the face amount. Instead, they’ll only get a refund of all premiums paid plus interest, according to the official VA policy documents (benefits.va.gov).
Unlike traditional private whole life insurance, VALife does not allow loans or cash withdrawals.
The VA confirms that it “builds cash value,” but this cash value cannot be accessed while the individual is living. It exists purely on paper as part of the policy’s structure (again, why private life insurance, which is available to any US citizen, is much better).
The premium you pay depends entirely on your age at the time of application.
A 50-year-old veteran will pay less than a 65-year-old, but both will face lifetime payments with no option to reduce or pause coverage. Once you start payments, you’re locked in permanently.
The VA describes this as a “set it and forget it” benefit, but most veterans will ultimately pay more into the plan than they would if they had chosen a different life insurance option.
Private companies offered through The Final Expense Guy provide simplified-issue whole life insurance that skips medical exams, offering first-day coverage with no two-year waiting period and significantly lower rates than VALife.
THE VALIFE WAITING PERIOD IS A MAJOR PROBLEM
The biggest weakness of VALife is the MANDATORY two-year waiting period before full coverage starts.
If a veteran dies within those first 24 months, the family receives only a refund of premiums paid, plus a small amount of interest. That’s it. No $40,000 benefit. No funeral protection.
This waiting period applies to everyone, regardless of health or age. The VA states clearly that “no death benefits will be paid during the first two years of coverage except for the return of premiums plus interest” (benefits.va.gov).
It’s terrible that our nation’s greatest veterans get sold this sub-standard life insurance product that costs 40% to 70% more when almost all of them could qualify for 1st-day coverage through the Final Expense Guy.
For a healthy 65-year-old veteran, that means paying into a plan for two full years before any protection is in place.
Many veterans think “guaranteed acceptance” means “guaranteed protection.” It doesn’t.
Guaranteed acceptance only means approval to buy the plan. It doesn’t guarantee a payout if death occurs early.
The best final expense and simplified issue whole life policies have underwriting questions that will provide immediate first-day coverage. These policies are designed for the same audience, seniors and veterans, but they use light health screening to reduce risk and offer lower prices.
That allows the insurer to offer first-day protection and bypass the waiting period.
Families expecting real financial protection are often blindsided when they discover that their veteran’s
VALife policy won’t pay out for a funeral or cremation if death happens within two years.
Is it really life insurance if you have to wait 730 days before your policy actually starts?
VALIFE COST VS PRIVATE FINAL EXPENSE INSURANCE
VALife pricing is age-based, and because there’s no underwriting, costs increase sharply as applicants age.
A veteran in their 70s will pay a high premium for a small benefit.
In contrast, private final expense life insurance utilizes simplified health screening, which enables companies to offer first-day coverage and often provides pricing that is 40% to 70% lower per dollar of coverage.
Below is a comparison showing how VALife compares to typical private final expense and simplified-issue whole life plans.
| Feature | VALife (VA.gov) | Private Final Expense | Simplified Issue Whole Life |
|---|---|---|---|
| Eligibility | Veterans with service-connected disability, age ≤ 80 | Adults 40-85 (varies by carrier) | Adults 40-85 (varies by carrier) |
| Health Questions | None (guaranteed acceptance) | Yes (simplified health review) | Yes (simplified health review) |
| Waiting Period | 2 years before full benefit | Often none; immediate full coverage available | Immediate full coverage |
| Coverage Limit | Up to $40,000 | Up to $50,000 (varies by carrier) | Up to $75,000+ |
| Cash Value Access | Builds value but not accessible | Yes, accessible via policy loan | Yes, accessible via policy loan |
| Underwriting Body | VA (not rated by A.M. Best) | Private carriers rated by A.M. Best & NAIC | Private carriers rated by A.M. Best & NAIC |
The difference speaks for itself.
VALife offers basic approval but a delayed benefit. Private insurers available through the Final Expense Guy offer 1st-day coverage that begins immediately and is governed by strict state and national oversight.
If a veteran’s goal is to protect family, not just qualify for a plan, first-day coverage from the Final Expense Guy wins out every time.
THE FINE PRINT VETERANS OFTEN MISS WITH VALife
VALife is marketed as a “no-hassle” option for veterans who want permanent coverage.
The VA highlights the convenience and lifetime guarantee, but skips over details that make the policy less effective in real life.
The first issue is cash value.
The VA states that VALife builds cash value over time, yet that value can’t be used or borrowed against. In private whole life insurance, policyholders can access that cash through loans or withdrawals.
VALife’s version is locked away for the government to access, but not the veteran. This is a significant benefit that is lost by opting for VALife.
Another major limitation is the coverage cap, as the maximum face amount is $40,000.
According to the National Funeral Directors Association (NFDA), the average cost of a funeral with burial in 2024 was $8,300, excluding cemetery fees, headstones, and other related expenses (NFDA.org). Add those in with other final expenses that may be left behind for loved ones to pay, and $40,000 may not be enough coverage.
Also, there are no living benefits either.
Many modern whole life and final expense policies include accelerated death benefits, which allow terminally ill policyholders to access a portion of their payout early. VALife does not.
The VA also provides no flexibility in premium payments.
Once enrolled, you must pay premiums that are 40% to 70% higher for life. There’s no paid-up option, no term conversion, and no ability to adjust the amount.
If a veteran struggles financially, the policy can lapse, and all prior payments will be forfeited.
Lastly, a crucial fact often overlooked is that VALife isn’t overseen by state insurance departments. This means there’s no state-level regulator to help resolve disputes, address rate increases, or address complaints.
That lack of accountability can leave veterans without the consumer protections found in the private market.
IS VALIFE FINANCIALLY SECURE AND SAFE?
Many veterans assume that because VALife is run by the Department of Veterans Affairs, it must be the safest or best deal available.
That assumption is understandable but inaccurate.
VALife is administered by a federal agency, not a traditional insurance company.
That means there are no A.M. Best financial ratings, NAIC complaint ratios, or Better Business Bureau (BBB) transparency records. Consumers can’t compare its performance, payout history, or complaint rate because none of that data is public.
In contrast, every private life insurance company is required to report its complaint statistics, financial ratings, and solvency data to state insurance commissioners and organizations such as A.M. Best and the NAIC. Those records allow you to see how reliable an insurer truly is before buying coverage.
VALife doesn’t provide that visibility.
The government’s involvement often creates a false sense of confidence.
Veterans often hear “VA” and assume it means superior quality. The fact is that VALife isn’t subject to the same competitive or regulatory pressures that keep private insurers honest.
There’s also a widespread misunderstanding that VALife is “free” or “state-sponsored,” when in fact it’s neither. The VA explicitly confirms that policyholders pay all premiums out of pocket, and the government doesn’t subsidize them (VA.gov).
VALife provides disabled veterans with a last-resort option when private coverage is unavailable. It’s not designed to be as good as other insurance companies offered through the Final Expense Guy.
COMPLAINTS, REVIEWS, AND COMMON FRUSTRATIONS
The most common complaint is misunderstanding the two-year waiting period.
Many veterans assume their families would be protected immediately after enrollment. When they learn that full coverage doesn’t activate for 24 months, frustration turns to disappointment.
VA forums and discussion threads on sites like Military.com, Reddit’s r/Veterans, and HadIt.com often feature stories of family members who discovered too late that no death benefit was available. In many cases, spouses received only a small refund instead of the full amount they expected.
Other complaints center on limited coverage.
Veterans with dependents find the $40,000 cap too low for meaningful financial protection. Families needing $75,000 or more for funeral costs, debts, and living expenses have no upgrade path inside the VA system.
Customer service is another sore point.
Many users report long response times from the Veterans Benefits Administration (VBA) and difficulty getting detailed information about policy values or premium projections. Unlike private insurers, which offer 24-hour helplines, the VA’s communication process involves formal requests that can take weeks.
Finally, veterans who transition from Service-Disabled Veterans Insurance (S-DVI) to VALife often report confusion about coverage differences. Some believed the new policy would provide immediate protection, similar to their previous plan. It doesn’t.
WHO BENEFITS AND WHO DOESN’T
VALife isn’t worthless, but it’s not for everyone. Understanding who gains and who loses is the key.
Veterans who truly can’t qualify for private life insurance because of severe health issues may benefit from VALife. For them, the guaranteed approval might be the only available option. In that case, the two-year waiting period becomes a tradeoff.
But why not get better insurance in the civilian market for less money through The Final Expense Guy?
Many individuals with common conditions, such as high blood pressure, diabetes, or arthritis, can still qualify for first-day coverage through private insurers. These policies offer immediate benefits, higher limits, and flexibility that VALife doesn’t match.
Another overlooked problem is that VALife doesn’t transfer or integrate with any other VA benefit. It’s completely separate from Dependency and Indemnity Compensation (DIC) or Service Members’ Group Life Insurance (SGLI) programs. That confuses families who assume these coverages overlap.
Veterans who want real, immediate protection for burial or final expenses are better served by private policies that start working on day one. The difference between waiting two years and having instant protection is as different as night and day.
VALIFE ALTERNATIVES & FIRST-DAY COVERAGE OPTIONS
Veterans often believe the VA is their only trustworthy option for life insurance.
That belief costs many families thousands of dollars in lost benefits.
Private final expense and simplified issue whole life plans exist for nearly everyone. These plans skip medical exams but include a short list of health questions to determine eligibility.
Because they evaluate your health risk upfront, most offer first-day coverage, which means the full death benefit activates immediately, and you can qualify for lower rates.
Instead of waiting two years, a family is protected from the very first day. If the insured passes away in the first week, the entire policy pays out.
Most private policies also offer cash value access and living benefits, allowing you to borrow against the policy or receive partial payments if diagnosed with a terminal illness.
Veterans lose both of those features under VALife.
Private insurers, such as Mutual of Omaha, Aetna, and Trinity Life, specialize in coverage for seniors and veterans.
These companies are rated A or better by A.M. Best, meaning they have strong financial stability and long-term claims reliability. The VA doesn’t receive this type of independent evaluation.
The best part is that most applicants qualify immediately. About 97% of veterans can be approved for first-day coverage through the Final Expense Guy. That’s why VALife should never be your default choice.
Veterans who shop the market through a licensed independent broker, such as The Final Expense Guy, can compare multiple plans, lock in lifetime rates, and start protection immediately.
That’s the smart way to protect your family instead of paying premiums for two years with no benefit.
VALIFE REGULATORY AND FINANCIAL STABILITY
Every private life insurance company in the United States operates under strict regulatory oversight.
Policies are reviewed and approved by state insurance departments, and carriers are rated by independent financial agencies, such as A.M. Best, Moody’s, and Standard & Poor’s.
These ratings evaluate an insurer’s financial strength and claims-paying ability.
Consumers can verify them at any time through public databases, such as NAIC.org or Ambest.com.
VALife, by contrast, operates outside that system. It’s a government program, which means it’s exempt from state-level audits, lacks an A.M. Best financial grade, and has no published claim ratio.
The Department of Veterans Affairs is not required to disclose financial performance or claim statistics, leaving veterans with no objective way to measure risk.
This lack of oversight doesn’t automatically mean the VA is unsafe. It means you have less transparency than you would with a private carrier.
When families buy from a regulated insurer, they can verify every rating, complaint index, and policy approval through state regulators.
When they buy from VALife, they’re trusting a government promise without independent verification.
If you’re protecting your family’s future, it makes sense to work with an advisor who compares A-rated carriers, explains the fine print, and builds a plan that pays out from the first day, not after two years.
FREQUENTLY ASKED QUESTIONS: VALIFE INSURANCE
What is VALife Insurance?
VALife is a permanent whole life insurance program for veterans with service-connected disabilities. It’s issued by the U.S. Department of Veterans Affairs (VA) and was created to replace the old S-DVI program. Veterans can apply for up to $40,000 of coverage, and unlike private insurance, it doesn’t require a health questionnaire or medical exam.
Coverage builds cash value over time, which you can borrow against, but that also means premiums are significantly higher than a typical private plan with the same coverage.
How does VALife work?
VALife works like any other whole life policy. You pay monthly premiums, and the coverage lasts your entire lifetime. However, it includes a two-year waiting period before the full death benefit is payable. If you pass away within the first two years, your beneficiary will only receive the premiums you paid, plus interest.
After the two-year mark, the full amount (up to $40,000) is paid to your beneficiary. It’s a guaranteed-acceptance plan, not an immediate-benefit policy.
How much is VALife per month?
VALife premiums are based entirely on your age at the time of application and the amount of coverage you select. For example, according to the VA’s official premium chart:
At age 40, $10,000 of coverage costs about $22.00 per month.
At age 60, $10,000 of coverage costs around $50.00 per month.
At age 70, the same $10,000 jumps to roughly $78.00.00 per month.
These rates are locked in for life, but they’re higher than comparable private whole life insurance that offers first-day coverage.
How long do you pay premiums for VALife?
You pay premiums for life unless you choose to cancel. VALife doesn’t have a “paid-up” option, unlike many private plans that terminate payments after 20 years. The VA automatically deducts your monthly premium from your bank account or disability compensation.
What’s the difference between VGLI and VALife?
VGLI is term life insurance, designed for veterans leaving active duty. Coverage can last for decades, but the cost increases every five years as you age.
VALife, on the other hand, is whole life insurance with level premiums and lifelong coverage, but with a two-year waiting period before the full payout.
Think of VGLI as short-term protection and VALife as permanent coverage, though it’s not usually the best long-term financial choice for healthy veterans.
