4 Essential Life Insurance Tips for Military Members

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Life insurance can be especially important for members of the military, who are often deployed to high-risk areas while they’re supporting a family. The military offers low-cost life insurance to service members, but you may need to fill in gaps or prepare for coverage after you leave the military. Here’s how to make the most of these benefits and protect your family if anything happens to you.

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Take Advantage of Low-Cost Life Insurance

Servicemembers Group Life Insurance (SGLI) is a low-cost life insurance program available to members of the military regardless of their health, risk, or age. The rates were reduced in July 2019, and you can now get the maximum $400,000 of life insurance coverage for 6 cents per month per $1,000 of coverage. This brings the annual cost to $288.

Service members can also get up to $100,000 of coverage for their spouses, with premiums of $54 per year for spouses under age 35, and higher for older spouses.

Make the most of these low-cost life insurance programs, and be sure to update your beneficiary designations whenever you have life changes, such as if you get married or divorced. See the VA’s life insurance page for more information.

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Have a Life Insurance Plan Before You Leave the Military

SGLI ends after you leave the military, but you can convert your policy to Veterans Group Life Insurance within a limited time period regardless of your health. You have up to one year and 120 days of leaving the military to sign up for VGLI, and you don’t have to provide evidence of good health if you sign up within 240 days of leaving the military. However, the premiums for VGLI are higher than they are SGLI, and they rise as you get older. If you’re healthy, you may get a better deal on your own.

For more information, see the VA’s VGLI page .

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Consider Additional Coverage

SGLI is a great way to get life insurance coverage while you’re in the military, but it may not be enough depending on your family’s income and expenses that would continue after you’ve passed. A general rule of thumb is to get enough life insurance to cover 8 to 10 times your income, but families’ life insurance needs can vary greatly depending on their situation – a family with one income and young children will usually need more life insurance than a couple with grown kids and two working spouses. You can use a life insurance calculator, such as the one at LifeHappens.org, to estimate your life insurance needs. It’s a good idea to buy the extra insurance before you leave the military, when you’re younger and can lock in low rates for 20 or 30 years.

Life Insurance and Military Retirement Pay

It’s also important to keep insurance in mind when you’re retiring from the military and making decisions about your retirement pay. You can sign up for the Survivor Benefit Program (SBP), which lets your beneficiary continue to receive up to 55% of the amount of coverage you elect for his or her lifetime after you die. For your spouse to receive this benefit, you’ll generally pay 6.5% of the portion of the monthly pension payout you want your spouse to receive (it can cost more to make your children your beneficiaries, depending on their age). For more information, see the Department of Defense’s Survivor Benefits page.

If your spouse is depending on your pension to pay the bills, it’s essential to consider the SBP or life insurance to make sure your spouse has enough money to live on. If you do end up buying life insurance for your spouse’s retirement income, be sure the policy will last for your spouse’s lifetime – a big mistake some people make is to forego the SBP in order to maximize their retirement pay, then get a life insurance policy that expires after 10 or 20 years, leaving the spouse without the pension income or life insurance.

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About the Author

Kimberly Lankford has been a financial journalist for more than 20 years. As the “Ask Kim” columnist at Kiplinger’s Personal Finance Magazine, she received hundreds of reader questions every month about insurance, taxes, retirement planning and other personal finance issues. Her financial articles have also appeared in the Washington Post, U.S. News & World Report, AARP Magazine, Boston Globe, PBS Next Avenue, Bloomberg Wealth Manager and Military Officer Magazine, and her syndicated columns were published regularly in the Chicago Tribune, Denver Post, Baltimore Sun and other papers.

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