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Shopping for life insurance is probably on your military family’s to-do list, somewhere between scheduling your semiannual dentist appointments and unpacking the final box from your last PCS. It’s not uncommon to feel intimidated by the process with all the factors involved in picking the right policy, but there’s no need to fret. The three questions below can help you focus on your needs and guide you in picking the right policy.
1. Why should I purchase a life insurance policy?
This may seem like a pretty straightforward question, but the answer will vary based on your family, finances, and intentions. Life insurance can be a way to replace income for dependents, such as children, spouses, and parents, after the policy holder’s death. Or, it could be used to create an inheritance for heirs by naming them as beneficiaries. Alternatively, the life insurance payout may cover final expenses, such as funeral costs, estate administration costs, and medical expenses not covered by health insurance. In short, life insurance can lighten the financial load placed on their family after their death.
2. How much life insurance do I really need?
You won’t be able to pin your life insurance needs down to the last cent, but some simple calculations can provide a pretty good estimate of your needs. Start by adding up your financial obligations, such as annual salary times the number of years you want to replace income, your mortgage balance and other debts, and future needs for your children, such as college. Then subtract your liquid assets, such as savings, existing college funds, and current life insurance policies (for example, SGLI). Make this calculation quick and easy by using the AAFMAA Life Insurance Calculator.
3. Who should I name as the beneficiary to my life insurance policy?
The beneficiary is the person (or entity) who will receive the cash benefit from your policy once you’ve passed, so you’ll want to choose wisely. Many people use their policy to protect their loved ones, designating their spouse, parents, or children as beneficiaries. If you don’t have any dependents, you can choose to designate a charity, your alma mater, or even your estate as the beneficiary. Remember, as your life changes your choice of beneficiary can, too. Many policies allow you to change your beneficiary at any time, so be sure to revisit your decision during major life changes, such as getting married and having kids.
With your answer to these three questions in mind, you’re all set to begin shopping for a life insurance policy. Our final tip before you embark on the process is to look for a life insurance provider that will understand the unique needs of your military family. AAFMAA is the trusted provided of financial services exclusively for the military community, and can help you receive the coverage your family needs while offering support throughout all the twists and turns of your unique lifestyle. Visit https://www.aafmaa.com/milspouse for more information about how AAFMAA supports the Military Spouse community.