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Marital Status and Military Life Insurance Choices

Joe Wallace

Life insurance is a tool designed to protect loved ones if the policyholder dies. While the purpose of life insurance remains constant, life choices and changes typically shape your specific insurance policies, coverage amounts, and beneficiary designations. One of the most important areas? Your marital status. How should this affect your military life insurance choices?

Your marital status has financial implications (and obligations) that directly influence life insurance decisions. Your military life insurance options, whether married or single (Servicemembers’ Group Life Insurance, Family Servicemembers’ Group Life Insurance), are important considerations, just as you may need to contemplate additional or supplemental life insurance options from a civilian insurer.

The Single Servicemember: Simplicity and Future Planning

Life insurance choices might appear simple for the single service member. With no spouse or children currently dependent on their income, the primary considerations are often:

• Sufficient SGLI: For many, SGLI coverage may be sufficient to cover final expenses, outstanding debts (like student loans or car payments), and provide a small inheritance for designated beneficiaries (often parents, siblings, or other family members).
• Beneficiary Designation: Single members must name beneficiaries explicitly. Without a spouse or child, the default order of precedence for SGLI typically goes to a surviving spouse, children, parents, siblings, and then the estate. If a single service member wishes to designate someone outside this order (e.g., a close friend, a charity), they must actively update their designation through the SGLI Online Enrollment System (SOES) or equivalent means.
• Future Needs: Even single service members should consider their future. Marriage, children, or major financial commitments (like a home) can drastically change their life insurance needs. It is wise to maintain a policy that can be easily adjusted or supplemented later.

The Married Servicemember (Traditional Family): Expanding Obligations

Marriage fundamentally shifts life insurance needs. A spouse becomes a financial dependent, and joint responsibilities like mortgages, shared debts, and future planning for a family come into play.

• Automatic FSGLI for Spouse: When a service member covered by SGLI marries, their spouse is typically automatically covered by FSGLI unless the service member declines or reduces the coverage. This provides a baseline level of protection for the spouse.
• Income Replacement: The most significant consideration is income replacement. If the service member were to pass away, would their spouse be able to maintain their standard of living, pay off the mortgage, cover daily expenses, and meet long-term financial goals? SGLI’s typical maximum of $500,000 and FSGLI’s typical $100,000 for a spouse may not be enough for many families, especially if the spouse is not employed or earns significantly less.
• Debt Coverage: Joint debts (mortgages, car loans, credit cards) become the surviving spouse’s sole responsibility. Life insurance should be sufficient to cover these liabilities.
• Long-Term Financial Security: Beyond immediate needs, coverage should consider long-term goals like retirement savings for the surviving spouse.

The Married Servicemember with Children: Protecting the Next Generation

Adding children to the family introduces a new layer of financial responsibility and complexity to life insurance planning.

• Free FSGLI for Children: Dependent children are automatically covered for $10,000 each under FSGLI at no cost. While this is a welcome benefit, this amount is rarely sufficient to cover a child’s long-term needs, especially for education.
• Childcare and Education Costs: If one parent stays at home or provides significant childcare, their passing would necessitate new childcare arrangements, which can be a substantial expense. Future college costs for children are also a major factor that often requires coverage well beyond SGLI and FSGLI limits.
• Long-Term Income Replacement: The service member’s income may be crucial for supporting children for decades. A life insurance policy should aim to replace this income for a substantial period.
• Guardianship: While not directly tied to life insurance amounts, the designation of legal guardians for minor children in a will is an essential part of the overall planning that life insurance facilitates. The guardian may manage the life insurance proceeds for the children’s benefit.
• Supplemental Private Insurance: This is where private military life insurance often becomes indispensable. Many financial advisors recommend 10-12 times a service member’s annual income in coverage, which typically far exceeds SGLI limits when factoring in a spouse and children’s needs. Term life insurance is often popular for young families due to its affordability and ability to cover a specific period of high financial dependency (e.g., until children are grown and financially independent).