New Bill Mandates 5-Year Review of Military Life Insurance Maximums to Keep Pace with Inflation

When we talk about life insurance, the maximum payout is a big deal, especially for military families who rely on Servicemembers Group Life Insurance (SGLI) and Veterans Group Life Insurance (VGLI). The problem is that the maximum coverage amount can get eaten away by inflation over time, meaning the real value of the benefit shrinks.

The Fairness for Servicemembers and their Families Act of 2025 is tackling this head-on by creating a mandatory, scheduled review process for those maximum coverage amounts. Starting January 1, 2026, and every five years thereafter, the Secretary of Veterans Affairs must compare the current maximum SGLI/VGLI coverage against a new, inflation-adjusted figure. This isn't just a suggestion; it’s a mandated check-up to ensure the benefit doesn't become outdated.

The Inflation Check-Up: How It Works

This bill introduces a specific formula to measure how much the coverage should be worth. The review starts with a base amount of $500,000 and adjusts it using the average percentage change in the Consumer Price Index for All Urban Consumers (CPI-U) over the preceding five fiscal years. Think of the CPI-U as the official measure of how much more expensive groceries, gas, and housing have gotten. This mechanism ensures that the maximum payout—the one that’s supposed to provide for a family—maintains its purchasing power.

For a service member or veteran, this is a big win for financial stability. Right now, if the maximum coverage is $400,000, and inflation runs high for a decade, that $400,000 buys significantly less than it did when the amount was set. By tying the review to the CPI, the bill creates a clear, objective metric for recommending future increases. It’s essentially building an automatic defense against inflation for a critical family benefit.

Transparency and Next Steps

Once the review is complete, the Secretary must submit the results to the Committees on Veterans’ Affairs in both the House and the Senate. This reporting requirement (Section 2) ensures transparency and forces the conversation about increasing coverage amounts into the legislative spotlight. The bill notes that these results will “help guide coverage increases within the current administrative incremental structure.”

What this means in plain English: The review itself doesn't automatically raise the coverage; it generates the data Congress needs to justify and implement an increase. It’s the essential first step in a regular, predictable process. Instead of waiting for a crisis or a major legislative push to adjust these benefits, the bill establishes a five-year cycle to make sure the coverage keeps pace with the rising costs of life for military families.