INCREASING THE SERVICEMEMBERS’ GROUP LIFE INSURANCE (SGLI) MAXIMUM PAYOUT

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. Lieutenant, United States Navy Approved for public release. distribution is unlimited