Veterans’ Mortgage Life (VMLI) Overview
Veterans’ Mortgage Life (VMLI)
If you have a service-connected disability that the VA concluded was caused or made worse by your service, you may be eligible for a Veterans’ Mortgage Life Insurance (VMLI) policy. In the event of your death, this insurance can help your family pay off the home mortgage that has been adapted to meet your needs as a result of your disability.
To get VMLI, you will need to apply for the VA’s Specially Adapted Housing (SAH) Grant, which is a grant that allows a veteran to buy, build, or change a home that facilitates greater independence in living. When you apply for the SAH grant, your loan guarantee agent will determine your eligibility for VMLI.
All of the following criteria must be met for VMLI eligibility:
- You have a severe disability that was determined by the VA to have been caused or exacerbated by your military service, and
- You’ve received an SAH grant to buy, build, or make changes to a home, and
- You have the title of the home, and
- You have a mortgage on the home, and
- You are under 70 years old
Benefits and Details of a VMLI policy
- The money will be paid directly to the bank or lender that holds the mortgage
- The amount of coverage will equal the amount still owed on the mortgage, not to exceed $200,000
- VMLI is a decreasing-term insurance, meaning that your coverage amount goes down as your mortgage balance goes down. If you pay off your mortgage, the VMLI coverage will end.
- The VMLI policy has no cash value and does not pay dividends.
How to Apply
As mentioned above, you will need to have already been approved for a Specially Adapted Housing grant. If you already have an SAH grant, ask your agent about getting a VMLI policy.
They will help you fill out the Veterans’ Mortgage Life Insurance Statement, VA Form 29-8636. Keep in mind that you must apply for the VMLI before you turn 70.
How Much Does it Cost?
As with most insurance policies, your VMLI premium will be based on various factors, including:
- Your age
- The current balance of your mortgage loan
- How many mortgage payments are needed to pay off the mortgage
- The amount of VMLI coverage you need
The VA has a VMLI Premium Calculator that you can use to get an estimate of your monthly premium.
What if Something Changes?
The home covered by the VMLI policy must be your primary residence, meaning where you live most of the time.
To keep your VMLI coverage, you must inform the VA if you:
- Transfer your mortgage from one lender to another
- Liquidate your mortgage (foreclosure, bankruptcy, etc.)
- Refinance the home, which changes the terms of your loan
- Sell your property
If any of these changes apply, send a notice of the changes to:
Department of Veterans Affairs
Regional Office and Insurance Center
P.O. Box 7208 (VMLI)
Philadelphia, PA 19101
As with any insurance policy, it is ideal to check things out from time to time. If you want to check your VMLI policy, or any other VA insurance policy, head over to the VA’s online insurance access page.
(Image courtesy of Alexander Stein via Pixabay.com)
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