No one likes to consider life insurance because it forces you to stare your own mortality right in the face. However, from a financial and family planning perspective, life insurance is an essential purchase that can give you immense peace of mind, as well as provide the same for your family. When you are a member of the military, hazards usually are a part of the routine job description. The purchase of life insurance then becomes even more important, as a just in case, in the event of an unpredictable and tragic event. Thankfully, most service members are eligible for a form of life insurance called the Servicemembers Group Life Insurance, also known as SGLI. However, this isn’t quite a “set it and forget it” kind of policy, there are plenty of aspects of military life insurance to consider, including buying additional insurance.
SGLI – Up to $400,000 in Life Insurance
Eligible service members are automatically enrolled in the SGLI program at the maximum $400,000 insurance benefit. The coverage can be reduced in $50,000 increments or opted out of entirely. However, this certainly isn’t recommended as the premiums amount to only about $26 per month, taken directly out of the paycheck. While this is a benefit of being a service member, it is still a commercial product with the need to designate a beneficiary and manage like any other financial product in your portfolio. As nice as SGLI is, there are still critical other considerations to make when it comes to military life insurance.
Update Your Life Insurance with Your Life Events
One of the biggest mistakes made with life insurance, and military SGLI, in particular, is not updating your life insurance with your life events. Making sure a beneficiary is named properly will prevent a lot of stress, hardship, and anxiety if the policy ever needs to be paid out. While you don’t need to monitor it daily, updating any life insurance policy, including SGLI, with major life events like divorces, the birth of children or marriages will ensure that the beneficiaries on your policy are who they actually should be and prevent any legal or financial troubles that may result.
Take Care When Purchasing Extra Life Insurance
While $400,000 is a great start to life insurance, many service members, especially those with families, look at the possibility of adding supplementary coverage to add to the peace of mind that comes with insurance. However, there are plenty of things to consider when making this decision. One of the big ones, particularly for service members, is that some life insurance policies have an exclusion for death in war, something that is certainly problematic for active duty service members.
Taking careful consideration of purchasing and managing a life insurance policy can make a world of difference to a military service member and their family. If you have any questions, we have answers! Contact us now and let us assist you.