Getting married is a joyous life change, but one that comes with extra planning factors when your betrothed is a servicemember. Assessing life insurance protection is always advisable when a major life event occurs but, if your future spouse is active duty, those considerations are more specific. Consider the below factors when planning your future wedded life.
1. How much life insurance do you need?
This is the number one question to answer. Most single active duty servicemembers who don’t have any dependents would have less concern in this area, since Servicemembers’ Group Life Insurance (SGLI) provides up to $400,000 worth of life insurance for their beneficiary. However, establishing a guarantee of future insurability via whole life, term life with conversion option or additional insurance purchase options may still be an important consideration to prepare for future coverage needs or any potential change in health.
If you are married, have children, or own property with a mortgage balance, $400,000 may not go as far as you think. Marriage means shared financial responsibility, and life insurance is critical to establishing the security that forms the base of any financial planning pyramid. Be sure to speak with your future spouse and ensure that your new family will be adequately covered in any situation. You can estimate your life insurance needs by subtracting non-retirement assets from debts and then adding some portion of your future earnings. Our easy to use life insurance needs calculator can provide a more specific answer and is found here. If you decide that additional life insurance is needed or simply want to guarantee future insurability, check out our Life Insurance LookBook for a checklist to use when shopping for the best coverage.
2. Joint policies
Some life insurance companies offer joint policies for married couples. When looking into a joint policy, be sure to check the fine print for any war, terrorism, or aviation clauses that could apply to the servicemember. Also keep in mind that joint policies are often “second to die” products, which may be a cost-effective way to create an ultimate estate value for the couple, but don’t provide any benefits to the surviving spouse. For this reason, individual life insurance, tailored to specific, changing needs of each insured as a new family ages, often results in a more “efficient” life insurance strategy.
3. Stay-at-home spouses
While roughly half of military spouses are not actively in the workforce, non-income earning spouses still need life insurance coverage to compensate for the substantial support they provide at home. Military spouses can be covered through Family Servicemembers’ Group Life Insurance (FSGLI) with a death benefit of up to $100,000. This coverage is not convertible to any type of low-cost term life insurance after the servicemember exits military service so establishing protection for them would have many advantages. When child care is involved, expenses can easily exceed many thousands of dollars per month, and the servicemember themselves would still have ongoing work to accomplish. Even if extended family are available for support, the financial impacts of a stay-at-home spouse’s passing can be severe. Our life insurance needs calculator can help confirm your needs.
Ensuring that you and your spouse both have the right amount of life insurance will bring peace of mind, knowing that your family’s financial future is secure. Be sure to discuss your needs with an insurance counselor or financial planner. This service will be available to you as a married couple for free from Personal Finance Management Services. You can look up your nearest Financial Readiness Manager by clicking here and selecting Personal Financial Management Services.