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It’s easy not to think too much about life insurance when your spouse is in the military, since their coverage is automatic. In fact, the military ensures that all servicemembers are covered from day one – with $400,000 of Servicemembers’ Group Life Insurance coverage (SGLI) and up to $100,000 in Traumatic Injury Protection (TSGLI) – for $25 a month. As a military spouse, you too, may have automatic life insurance coverage under the Family SGLI (FSGLI) program. Spouses are eligible for up to $100,000 of coverage for an additional monthly premium ranging from $0.45 to $45 depending on your age and the chosen amount of coverage. FSGLI also provides $10,000 for each dependent child, free of charge.
If $500,000 in combined life insurance seems like a lot of money, you are right. It is often more than enough coverage for young servicemembers and their spouses with no children or financial obligations. When you start doing the math, though, between income protection for a spouse and the costs associated with children, a mortgage, debt, and future education costs, $500,000 does not go as far as you would think.
Your family may need life insurance beyond what SGLI and FSGLI can provide if:
- You have children who depend on your income.
- You have other family members (e.g., older parents) whom you support financially.
- You have a mortgage.
- You want to send your children to private school or college.
- You want to leave an estate to your family after your passing.
How Much Supplemental Coverage Should You Purchase?
When thinking about how much life insurance coverage your family needs, think about how much money would be required to maintain your standard of living without your spouse’s (or your) income. In the short term, there may be immediate cash needs for funeral and final expenses, and debts may need to be paid off with any remaining financial assets in your estate. Long term, you want to provide a large enough death benefit that your spouse’s income and/or your income is replaced, and any future expenses, like your children’s education, are covered. Even if one spouse does not have an income, it is important to consider the long-term cost of childcare if that spouse were to pass away when there are young children in the home. Determining this amount can be difficult, but you can use our Life Insurance Needs Calculator to help.
Note: Survivors of servicemembers are entitled to monthly survivor benefits through Dependency and Indemnity Compensation, the Survivor Benefit Plan (SBP), and Social Security. A family’s additional life insurance need (beyond SGLI) should be based on monthly expenses minus monthly survivor benefit entitlements. You can estimate this amount using our Survivor Entitlements and Benefits at a Glance calculator.
When to Purchase Supplemental Life Insurance Coverage
It’s in your best interest to purchase individual life insurance coverage when you are young and healthy, because that is when life insurance is the most affordable. For example, if you purchase a policy with level premiums when you are 30 years old, your rates will be much lower than if you wait until you are 40 years old to purchase the policy. Furthermore, if you were to develop any illnesses or disabilities later in life and do not have any life insurance coverage, you may find that you cannot medically qualify for insurance at all, which leaves your family unprotected after SGLI or FSGLI coverage ends. Developing a plan for post-military life insurance well before the end of your spouse’s military career provides many reasonably priced options.
Note: If your spouse converts their SGLI to VGLI within 240 days of leaving the service, they are guaranteed coverage without a medical exam. If your spouse wishes to obtain coverage through Navy Mutual without a medical exam (Guaranteed Issue Flagship Whole Life), they must apply within 120 days of their separation. As a military spouse covered by FSGLI, you have 120 days after your spouse leaves active duty to convert your coverage to a whole life insurance policy through the VA without undergoing a medical exam. You are also eligible for up to $100,000 of Guaranteed Issue Flagship Whole Life coverage through Navy Mutual.
Once you own an insurance plan with a company, you can often make changes to your coverage amount, retain eligibility for other products or extend eligibility to your family members, or convert your policy to another form of insurance (e.g., from term insurance to permanent insurance). Getting in while you are young, then, almost certainly will benefit you in the long run.
Special Circumstances
1. If your spouse is deploying soon or has already deployed, Navy Mutual offers a range of life insurance plans, all of which feature no military service restrictions. There are no war, aviation, terrorism, or travel clauses for those on active duty.
2. If you are buying a home, getting married, having children (or all of the above), congratulations! With such big lifestyle changes – and the associated financial implications – it may be time to purchase additional life insurance. Navy Mutual offers a term life plan with higher coverage amounts at our lowest cost. You can also secure your children’s financial future with a whole life option that builds tax-deferred cash value over time.
3. If your spouse is separating from the military, it is important to remember that neither SGLI or FSGLI nor the monthly survivor benefits through the VA and SBP follow your family when you leave the service. When they separate, your FSGLI coverage stops immediately, and their SGLI coverage stops 120 days after leaving active duty. It is important to consider your options for replacing SGLI and FSGLI coverage well before your spouse’s separation date so that you can make the best choice for your family’s personal and financial situation.
During the 120 days after separation – and for an additional year afterwards – your spouse can convert their SGLI coverage to Veterans’ Group Life Insurance (VGLI) coverage. If they want guaranteed coverage without a medical exam, they need to apply within 240 days of separating. That being said, if your spouse is able to medically qualify for life insurance from a private company, a similar policy may be less expensive than the guaranteed coverage through VGLI. Additionally, VGLI becomes significantly more expensive as your spouse ages. For example, they would pay $144 per month for $400,000 of coverage between 50 and 54 years old, but that premium becomes $600 a month once they turn 65.
As a military spouse, you are ineligible for VGLI coverage and, if you desire life insurance coverage after your spouse leaves the military, you will need to find a policy through a private company. The VA offers you the option to convert spousal FSGLI to a permanent insurance policy within 120 days of your spouse’s separation from the military with no proof of medical eligibility required, but your options for companies are limited to those who partner with the VA. Like VGLI, if you are able to medically qualify for insurance coverage on your own, a similar policy from a private company may be less expensive than the guaranteed conversion of your FSGLI coverage through the VA.
Navy Mutual offers affordable term life coverage you can keep through age 85 and Guaranteed Issue Flagship Whole Life, a permanent life insurance option offered exclusively to separating servicemembers and their families.
Take some time to evaluate your finances and your family’s needs and give your family the peace of mind that comes with knowing they will be taken care of even after you are gone. If you are interested in a consultation, you can reach a representative at 800-628-6011 or you can schedule an appointment at your convenience.