Life Insurance

Benefits of Veterans' Mortgage Life Insurance - VMLI

Jan 25, 2022
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Unless you're currently in the military or a veteran, veteran's mortgage life insurance is probably unfamiliar to you. If you're eligible for coverage, you likely know that there are serious benefits to this type of policy.

What is veterans' mortgage life insurance (VMLI)? Simply put, it's a specialized type of policy designed to help the families of disabled veterans, should the veteran die while holding a mortgage. If the veteran is no longer around, coverage allows the spouse or partner of the veteran to remain in the home and not be saddled with mortgage payments.

There are some restrictions and rules to which this type of policy adheres, however. Let's take a closer look at veterans' life mortgage insurance and see how it can benefit those who've served our country.

Am I eligible for VMLI Veterans Mortgage Insurance?

According to the U.S. Department of Veterans Affairs, the requirements for mortgage insurance for veterans are fairly strict. You must meet the following conditions:

  • As determined by the VA, you must have a disability caused or exacerbated by your service in the military.
  • You must have received a Specially Adapted Housing (SAH) grant for your home.
  • You must have title to the home and a mortgage on it.
  • You must be under 70 years of age.

Keep in mind that you must meet all of these requirements. If your injury, for example, occurred after you were discharged from service, you wouldn't be eligible. Only service members and veterans can apply — not their family members or other interested individuals. 

What is a specially adapted housing (SAH) grant?

One of the primary requirements for veterans' mortgage insurance is that you must have applied for and received a SAH grant. The Department of Veterans Affairs provides these grants to service members and veterans with severe disabilities brought about by their service. 

These grants allow the recipients to build, remodel, or purchase a home with adaptations made that will enable them to lead a life free of restrictions.

A typical example would be making modifications to a home, allowing it to be wheelchair accessible, with wider doorways and ramps at entrances. The amount available for the grants changes year to year, but it's currently set at a little over $100,000. Applicants for VMLI must show that they've received a SAH grant and used it to purchase or make renovations on a home to meet their needs.

What disabilities make me eligible for VMLI?

The VA will make the final determination on whether your disabilities render you eligible for veterans' mortgage life insurance. Still, in general, the following are some of the conditions that would allow you to apply for VMLI:

  • The loss or loss of use of both legs, such that you can't move without braces, crutches, a cane, or a wheelchair
  • Blindness in both eyes, plus the loss of one leg
  • The loss or loss of use of both arms/hands
  • Severe burns
  • The loss or loss of use of one leg and one arm, affecting your balance or propulsion

Your VA agent can help you determine if you're likely to receive VA mortgage life insurance, and they can help you fill out the application, which is available online

What are the benefits of mortgage insurance for veterans?

A mortgage life insurance policy for disabled veterans has one purpose: It will pay up to $200,000 to the mortgage holder if the veteran passes away while holding the mortgage to their home. The money is paid directly to the bank or other lender; the veteran's survivors won't receive a check. 

Veterans' mortgage life insurance is a decreasing term life insurance policy. This means as you pay down your mortgage, the amount the lender would receive also decreases to match the current balance on the mortgage account. Once you've paid off your mortgage, the policy would end; there would no longer be a potential benefit. 

Therefore, your premium for the coverage will be determined by how much you owe and the number of payments you still need to make to pay off the mortgage. 

What other types of life insurance am I eligible for as a disabled veteran?

Disabled vets can apply for either of the two primary types of life insurance: term and permanent. An Ethos Life term policy will help you to be prepared for expenses should you pass away during the life of the policy, which can be anywhere from 10 to 30 years. A term policy can help pay for educational expenses, housing, and more. It's especially important if you have children or a dependent partner. 

Permanent insurance, such as Ethos' whole life policies, last for the rest of your life and can help pay for anything from medical expenses to funeral costs. A whole life policy also offers a cash value, which you can draw from during your life if you need an influx of cash for any purpose. 

Check out Ethos' coverage calculator to better understand how much online life insurance you and your family need.

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