Military members have a wonderful benefit called Servicemembers Group Life Insurance (SGLI). Nowadays that benefit costs 6 cents for $1,000 of coverage. This makes the premium only $25 for up to 400,000.000 coverage. Most non-SGLI life insurance policies have a wartime provision that prevents them from having to pay out if you were to do die during war or other military operations. This makes SGLI coverage a great benefit while you are serving. There is no SGLI cash surrender value because SGLI is a form of term life insurance.
What about military members’ life insurance needs? The average single military member can be fine with little life insurance other than to provide for his burial. Your military HR specialists will always insist that you need the maximum coverage. Now for military members with dependents, I would always suggest the maximum amount for SGLI. SGLI along with your military survivor benefits will provide the cushion your family needs if you were to die while serving in military operations or not.
Let me discuss my own personal experiences as a military member with insurance salesmen trying to sell me life insurance products. In basic training (1993), I was sold a life insurance product like an annuity. Actually, I had no idea what the life insurance product as it could have been whole life insurance or whatever. Our basic training First Sergeant called us in and yelled at us why we bought such a stupid product when we were covered by SGLI. We mentioned we were looking for savings products beyond what was offered by a bank account. He made us tear up the allotment forms and he was right in a way that insurance salesperson should have never been let near us without actually explaining what the product was.
Again while I was stationed in Bad Kreuznach, Germany (1995) there was a financial salesperson who sold life insurance and mutual funds to military members in the barracks. He sold me something that had 20 dollars going to a life insurance product and 80 dollars going to a mutual fund. That mutual fund he sold me did very well since this was the middle of the .com boom. I have no idea what happened to that life insurance product after I exited the military and stopped paying for both products, the mutual fund helped me pay for college and post-military living. Either way, the lack of explanation about the life insurance product and what it did made it worthless. A 5-year pay whole life product with a good dividend aimed at being used for college could be useful to a military member.
Though all my personal life insurance stories are far from positive I have to ask is there a need for life insurance beyond SGLI for military members? As far as term life insurance goes I am going to have to say no most of the time. Most term life insurance policies do not cover wartime events as stated before. This makes the term life insurance almost worthless to anyone dying in a wartime event. One caveat to this is, the need to purchase more term life insurance might exist for a military member is living in a high-cost area to pay off the home they might own.
Their no SGLI suicide clause, so payout to the family will happen in such cases. Denial of payout will only happen in cases of Absent from the military for more than 30 days. Found guilty of mutiny, treason, spying, or desertion. Refuses, because of conscientious objections, to perform service in the Armed Forces of the United States. Death was inflicted as a lawful punishment except when inflicted by an enemy of the United States.
For a veteran that has or will be exiting service, there is SGLI to Veterans Group Life Insurance (VGLI) conversions. The SGLI to VGLI rates are tied to your age group and to be honest, they are not that competitive with other life insurance companies’ products. Not only that if you look at the picture above the timeframe it is awfully fast for you to have to decide if you want VGLI. You might actually want to get term life insurance quotes if you are leaving military service. You might also want to have your life insurance meet your post-military needs. Either way, when you are dealing with Wasatch Smart Finance you are dealing with a veteran-owned business that has knowledge and experience of issues related to military members.
What about Whole Life and Indexed Universal Life Insurance Products? Are these helpful for veterans? This depends on what the veteran or military members’ retirement goals are. Remember most IRAs, 401k’s, and Thrift Savings Programs do not allow usage until 59 1/2. This does not assist you when you retire as an E-7 or E-8 at age 45 if you truly wanted to retire at that age. No matter what a veteran has no need for an Option A version of these products and an Option B would be best as it will supply a rising death benefit.
I think my personal stories also highlight the need there is for Veteran-focused Insurance and Financial Advisors. Ones that put the Veteran’s needs and their financial transitions above their own. Wasatch Smart Finance hopes to be that for you.
I am a term life, infinity banking concept, indexed universal life insurance, and annuities advisor. I am looking to give Utahans a choice in life insurance as an independent advisor. I represent over 25 different insurance carriers on your behalf so we can find which one will approve you for the best policy. I started this company (Wasatch Smart Finance) so people like you could finally get honest answers & advice from advisors who have a comprehensive knowledge of finance and estate issues. Also as a Veteran, I want to assist other Veterans in their financial journeys.