Veteran’s Mortgage Life Insurance (VMLI) offers financial security to severely disabled veterans who have used a Specially Adapted Housing (SAH) grant to modify or purchase a specially adapted home suited to their needs. Unlike typical life insurance policies that pay beneficiaries cash, VMLI pays off the outstanding mortgage balance—up to $200,000—directly to the mortgage lender if the insured veteran passes away, ensuring the home remains with the family.
How VMLI Works
VMLI is designed exclusively for veterans who have received a SAH grant from the Department of Veterans Affairs (VA). First, the veteran obtains the SAH grant to buy, build, or modify a home to accommodate disability-related needs, often alongside a traditional mortgage. After the home purchase, eligible veterans can apply for VMLI coverage, with the insurance amount matching the mortgage balance but capped at $200,000.
Premiums are deducted monthly, either directly from VA benefit payments or paid separately, depending on the veteran’s arrangement. The cost varies based on the veteran’s age, the mortgage balance, and the mortgage duration.
Eligibility Criteria
To qualify for VMLI, veterans must meet specific eligibility requirements mandated by the VA:
- Have a severe service-connected disability.
- Have been approved for and used a Specially Adapted Housing (SAH) grant.
- Hold legal title to the specially adapted home.
- Have an outstanding mortgage on the property.
- Be under 70 years of age at the time of application.
Differences Between VMLI and Traditional Life Insurance
VMLI distinctly differs from regular life insurance policies. While traditional life insurance provides beneficiaries with a lump-sum cash benefit usable for any purpose, VMLI strictly pays the mortgage lender to eliminate debt on a specially adapted home.
| Feature | Veteran’s Mortgage Life Insurance (VMLI) | Traditional Life Insurance |
|---|---|---|
| Purpose | Pays off mortgage balance on an adapted home | Provides cash benefits to beneficiaries |
| Beneficiary | Mortgage lender | Individual(s) designated by the policyholder |
| Coverage Amount | Linked to mortgage balance, max $200,000 | Typically fixed for policy term |
| Eligibility | Restricted to veterans with SAH grants under age 70 | Widely available based on health and age |
| Medical Exam | Not required | Often required for coverage |
Common Misconceptions
- Not available to all veterans with VA loans: VMLI is exclusive to veterans with SAH grants, not the broader VA loan population. See more about VA loans.
- Benefit goes to mortgage lender, not family: The payout directly clears mortgage debt, preserving the home but not providing cash to heirs.
- Not a free benefit: VMLI requires monthly premium payments.
How to Apply
Veterans seeking VMLI coverage should complete VA Form 29-8636, Application for Veterans’ Mortgage Life Insurance. The form and additional guidance are available through the official VA website or VA regional loan centers.
For veterans who have transformed their homes to meet their accessibility needs using an SAH grant, VMLI offers a crucial safety net. By directly covering mortgage balances, it protects families from losing these specially adapted homes, maintaining stability and security.
For a broader understanding of VA home loans and related benefits, see our VA Loan glossary entry.
References
- U.S. Department of Veterans Affairs, Veterans’ Mortgage Life Insurance (VMLI): https://www.va.gov/housing-assistance/disability-housing-grants/veterans-mortgage-life-insurance/
- Investopedia, What Is Veterans’ Mortgage Life Insurance (VMLI)?: https://www.investopedia.com/what-is-veterans-mortgage-life-insurance-vmli-5205937
(Information accurate as of 2025.)
