INCREASING THE SERVICEMEMBERS’ GROUP LIFE INSURANCE (SGLI) MAXIMUM PAYOUT
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Authors
Steele, Katherine M.
Subjects
servicemembers group life insurance
SGLI
ordinary least squares
OLS
SGLI
ordinary least squares
OLS
Advisors
Sullivan, Ryan S.
Date of Issue
2021-03
Date
Publisher
Monterey, CA; Naval Postgraduate School
Language
Abstract
This research addresses the decreasing worth of the Servicemembers’ Group Life Insurance (SGLI) payout based on the year a servicemember dies. The SGLI maximum has stagnated at $400,000 for over 16 years and nearly every other servicemember entitlement or benefit has increased in this timeframe. Using four principal steps, this research first determines what the SGLI maximum should be using ordinary least squares (OLS) regression and compounding inflation rates. Second, it conducts trend analysis to determine statistically significant predictors of servicemember death trends and forecasts servicemember deaths, end strengths, and inflation rates for ex post analysis. Third, it determines the feasibility of the proposed increases using historical payout-to-contribution ratios to determine sustainable contribution rates for monthly premiums. Fourth, it discusses alternatives to still provide benefit to servicemembers and beneficiaries, regardless of policy change.
The ultimate recommendation is to increase the SGLI maximum to $525,000 in 2021, then continue to increase at 5-year intervals to correct for inflation, ultimately increasing to $605,000 in 2041 at which point it can be reassessed or have the interval increases continue.
With a 95 percent confidence interval, the models predicted between 757 and 2,596 annual servicemember deaths; total service end strengths between 798,529 and 2,300,810; and inflation rates between 0.44 and 5.56 percent until 2041.
Type
Thesis
Description
Series/Report No
Manpower Systems Analysis Theses
Department
Graduate School of Defense Management (GSDM)
Organization
Identifiers
NPS Report Number
Sponsors
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Format
Citation
Distribution Statement
Approved for public release. distribution is unlimited
Rights
This publication is a work of the U.S. Government as defined in Title 17, United States Code, Section 101. Copyright protection is not available for this work in the United States.