Serving in the military is a very honorable thing to do. It takes a lot of bravery and strength to serve your country. However, it’s important to remember that you are not invincible. In fact, there are many risks involved with serving in the military. That’s why it’s important to have additional life insurance while serving in the military. Discover why you need life insurance while serving in the military.
But I Already Have Insurance Through The Military
There is no doubt about it, Servicemembers’ Group Life Insurance (SGLI) is an amazing benefit. Enrolling in SGLI offers active duty service members $400,000 in life insurance coverage for only $25 per month. Spouses can enroll for $100,000 in coverage for only $5-10/month depending on their age. This kind of coverage for this low cost is something not found elsewhere. Truly an excellent benefit.
Here is the downside of SGLI: unfortunately, when you leave the military you leave many great benefits behind, including SGLI. When it is time to go back into the civilian world, your SGLI coverage stops, leaving you with no life insurance unless you’ve made other arrangements.
While there is an option to enroll in the Veteran’s Group Life Insurance (VGLI) upon leaving the military, these benefits are less than ideal. VGLI still only allows a maximum amount of $400,000 in coverage, and the monthly premium rate increases with age. For instance, you will pay $132/month at the ages of 50-54 but starting at the age of 55 it increases to $240/month. Eventually, the cost of VGLI coverage can become too expensive for many people to maintain, leaving you and your loved ones without coverage.
Why You Need Additional Life Insurance
Getting ahead of the game and not leaving your family vulnerable to gaps in coverage or a permanent lack of coverage is crucial while you are still active in the armed forces or reserves. There are multiple reasons why getting ahead of this is vital:
Buying your own policy results in lower costs long term.
The average person is looking for a term policy, something to cover their family for the next twenty or thirty years if something were to happen to them during their prime working years. Buying your own term policy outside of the military will allow you the chance to get a very low monthly premium that you can lock in for the amount of time you choose (usually twenty or thirty years).
The difference between this and VGLI is that these monthly rates will never increase. When you own your own policy the insurance company is agreeing to cover you without ever raising your monthly premiums for the entirety of the term. When averaged out over the term of the policy, the amount spent on the peace of mind of protecting your family is far, far cheaper than paying for VGLI.
Life Insurance For Military Veterans
VGLI’s biggest and best strength is that it offers service members guaranteed insurability. If something happens to you while you are in the armed forces and you are no longer considered insurable, you will still have VGLI as an option for coverage even though it is expensive.
However, if you take the proper steps of owning your own life insurance policy outside of the military while still serving, you don’t have to risk becoming uninsurable. You’ve now gained peace of mind that for the next twenty or thirty years your family will not be left financially strained if something were to happen to you.
Sufficient Protection
The maximum coverage whether you have SGLI or VGLI is $400,000. At first glance, you may think this is plenty of coverage. However, once you consider all the potential needs of your loved ones, it may not be enough. This coverage will need to be able to help cover your mortgage costs. It will also help with any debts such as credit cards, student loans, or car loans, as well as help fund college for your children.
An extra policy contributing to your total life insurance coverage could also allow your family to maintain their desired standard of living.
Financial advisors typically recommend that a sufficient amount of life insurance equals 10x of your annual income. As of May 2022, the average annual pay for an enlisted military member in the United States is $55,126. This means that the average enlisted military member needs at least $550,000 in life insurance coverage.
Recap: Getting The Insurance You Need
At the end of the day, everyone hopes to look back on the money spent on life insurance and happily realize they hadn’t needed the full benefit. But one of the sad realities of life is that at some unpredictable point, life ends. You never know what the next day may bring. Take steps to ensure that if it happens to you, you aren’t leaving your family with great financial hardship in your absence. Buying life insurance now ensures that you’re still taking care of them even after you’re gone.
Contact Bush Life Agency to learn more to find the right policy for you and your family.
