Service members, veterans and their families may get so used to the benefits the military provides that when it's time to look at the civilian equivalent, they don't know what to do. One area that confuses a lot of people -- military and civilian -- is life insurance.
In the military, you are covered from the day you join, and your family can also be covered, at a very affordable rate. However, that coverage may not be enough for your family -- and it doesn't automatically continue when you separate or retire.
Life insurance is not a set-and-forget thing. The coverage you need will vary based on your stage of life, your civilian job and your family's needs. At various stages in your life, you may discover you need more life insurance coverage. Here are some of the times you should reevaluate your coverage and make sure it is enough to protect your family.
5 Times to Evaluate Your Life Insurance Coverage
1. When Your Family Changes
A single service member has drastically different needs than those that are married or have children. If your family changes in any way, it is time to give your policy a review. Marriage, divorce and children are all things that may change the coverage you need. One thing to keep in mind is that stay-at-home parents should still be insured. It costs a lot of money to hire people to do the tasks that a stay-at-home parent does daily.
2. When Your Finances Change
The purpose of life insurance is to cover expenses when you pass away. Those expenses can range from paying off your house or other lines of credit to replacing your income so your family can transition to a different income level. When your financial situation changes, it's time to look at the coverage you need.
If a family member needs your financial help, as could be the case with an aging parent or a spouse who stops working to stay home with children, you also may need to increase your coverage. Conversely, if you receive an inheritance or lump sum of money, you may be able to reduce your coverage.
3. When You Face Deployment
As you face a deployment, insurance is something to check in on. It's important to make sure that you have the right person listed as a beneficiary and that you have enough coverage to support your family if something happens to you downrange.
Your Servicemembers' Group Life Insurance (SGLI) coverage may not be enough, so take into consideration how many working years you have left, how old your children are, how much your house costs and your family's standard of living. Is your coverage enough to support them?
4. When You Change Jobs
The first thing you need to consider is what are you going to do when you leave the military. Your SGLI coverage does not follow you, but you have a few options. One of these is Veterans' Group Life Insurance (VGLI), which provides coverage without an exam if you apply within 240 days (eight months) of leaving the service -- though you can apply for coverage for up to one year and 120 days after separation. It's a great option if you might otherwise have a hard time qualifying for an outside insurance policy. However, VGLI rates can be expensive, it caps out at $400,000 and it's not available to your family.
Commercial insurance policies are also available and are frequently a popular choice because of their higher coverage limits and the option to add your family to the policy. The cost of these policies typically depends on age, length of coverage and health.
Your new job may also offer life insurance, but the coverage often only lasts the length of your employment, which doesn't cover you when you retire. If you need life insurance longer than when you are working, this may not be the best option.
5. When Your Current Policy is Expiring
Just like when you are preparing to leave the military and your SGLI policy will end, when your current policy is set to expire, it's time to review it and decide what's next. Do you still need the same coverage as before? When you're considering this, think about why you originally got life insurance coverage. Did your kids move out on their own? Is your house paid off? Talk to your insurance carrier, get some additional quotes, and then make the best decision for your family.
Get the Coverage Your Family Needs
FSGLI, TSGLI, VGLI, SGLI ... the long list of acronyms and bare minimums may not be enough to cover your family's needs. Explore life insurance options with our free tool, which compares rates and matches you to the coverage you want.