Military Life Insurance: What To Know
Did you know that military life insurance options include both Servicemembers Group Life Insurance (SGLI) and private coverage?
Unlike signing up for TRICARE, active duty troops are not restricted to using only the government-offered military life insurance options, which include Veterans Group Life Insurance for those retiring or separating from the military.
Here are five tips you should know about life insurance and commercial life insurance options offered to military members and their families.
Planning Your Life Insurance Coverage
There are any number of online military life insurance calculators that can help you get an estimate of how much military life insurance coverage you might need.
Some sources note that a quick estimate can be had simply by multiplying your annual income by eight. You can also take your annual income, and multiply it by the number of years you have before you draw retirement benefits.
But don’t forget to take into account the unknown. You may require more coverage than what might be considered typical if you have student loans or higher amounts of other debt.
You may also have to contend with unexpected medical bills or other financial strain along the way.
Choosing the Right Military Life Insurance Policy
Do you need term life insurance? Whole life insurance? If you want a policy that pays dividends, whole life may be an option to consider.
If you have a limited budget and want a basic policy to protect against the unexpected term life may be the better option. It pays to research both before you decide which is best.
Know the Cash Value of the Policies You’re Considering
If you choose a whole life insurance policy, you accumulate value as you pay the premiums.
Once you have been in the policy long enough, you may be permitted to borrow against that value. You’ll want to know how much the value can grow and when you can borrow against it.
You’ll also want to know the estimated payment amount to your beneficiaries for any policy you take out. But is that basic dollar amount enough knowledge? Ask your insurer what kind of tax liabilities might apply when the policy is cashed out.
Related: No-Exam Military Life Insurance
Know How to Add or Change A Beneficiary
When you first sign up for any insurance policy, you may only have yourself and/or a spouse to worry about.
Over time, that equation may change, and you will need to know how and when you can add or change your beneficiaries. When adding someone to your life insurance policy, you will need specific information for them, including:
- Full legal name and relationship to you
- Current mailing address
- Email and phone number
- Date of birth
- Social Security Number
Adding Minors to Your Life Insurance Policy
You may notice in the list above the contact information includes email and phone numbers. In some cases, this information may not be available at the time you add the new names to your policy. This is typically true when naming a minor.
Those under 18 years old can be named in a policy as either a primary or contingent beneficiary. Still, you should know in advance that minors typically have insurance policies paid to the legal guardian of that minor child.
If you name minors in your policy, it may be wise to consider talking to a lawyer about how to best make those arrangements.
Read more: Private Life Insurance for the Military Community: A Comprehensive Guide
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About the author
Editor-in-Chief Joe Wallace is a 13-year veteran of the United States Air Force and a former reporter/editor for Air Force Television News and the Pentagon Channel. His freelance work includes contract work for Motorola, VALoans.com, and Credit Karma. He is co-founder of Dim Art House in Springfield, Illinois, and spends his non-writing time as an abstract painter, independent publisher, and occasional filmmaker.
