Servicemembers Group Life Insurance Premiums to Increase

Life insurance is an important part of financial planning, especially when your job often requires you to put your life on the line. Thankfully, military members have access to inexpensive life insurance through the Servicemembers Group Life Insurance program, or SGLI. The SGLI is a low-cost life insurance program available to military members. Family members are also eligible for coverage under the Family Servicemembers’ Group Life Insurance (FSGLI), (rates vary by age for FSGLI participants).

SGLI Rate Increase, July 2014: The SGLI rates are increasing slightly starting in July 1, 2014. But even with the small rate increase, the rates are still very affordable compared to many private life insurance options.

The new cost for SGLI life insurance is 7 cents per $1,000 coverage, a slight increase from 6.5 cents per $1,000 coverage (This is also the previous rate charged prior to 2007 when rates were decreased). To put this in perspective, the cost increase for the maximum amount of life insurance coverage of $400,000 is only a $2 per month increase, or $24 per year.

Current SGLI Rates Effective July 1, 2014

Here are the Servicemembers’ Group Life Insurance premiums:

Servicemembers' Group Life Insurance Rates

Coverage: You can elect to purchase coverage in $50,000 increments, up to a maximum of $400,000.

How these rates compare: These are group life insurance rates, which means that if you are in the military, you should be eligible for the same SGLI rates as everyone else. Individual life insurance plans bought on the open market have individualized rates based on your age, health, whether or not you smoke, and many other factors. You often need to fill out a questionnaire and health assessment before a company will issue you a private life insurance policy. This can make the SGLI insurance an excellent deal for those who are in an older age group, or who have health conditions that might make life insurance more expensive to purchase on their own.

Eligibility: You are automatically insured under full-time SGLI if you are one of the following:

  • Active duty member of the Army, Navy, Air Force, Marines, or Coast Guard
  • Commissioned member of the National Oceanic and Atmospheric Administration (NOAA) or the U.S. Public Health Service (USPHS)
  • Cadet or midshipman of the U.S. military academies
  • Member, cadet, or midshipman of the Reserve Officers Training Corps (ROTC) engaged in authorized training and practice cruises
  • Member of the Ready Reserve or National Guard and are scheduled to perform at least 12 periods of inactive training per year
  • Servicemember who volunteers for a mobilization category in the Individual Ready Reserve (IRR)

Ready to leave the service, or have already left? The SGLI provides 120 days of free coverage for those eligible for full-time SGLI from the date of separation from the military (or up to 2 years if the servicemember is totally disabled at separation). You may also be able to convert your SGLI policy to a Veterans Life Group Policy. This can be a good deal for people with pre-exisiting health conditions, as a straight policy conversion does not require additional health exams (those who convert their policy after 240 from separation are required to submit a statement of good health). However, VGLI rates are based on age and do not feature the same flat premiums as the SGLI program. Some younger individuals, or those who are in good health, may find it less expensive to purchase a private life insurance policy. It pays to shop around and examine your situation thoroughly before making the decision.

Related Topic: How Much Life Insurance Do Military Members Need?

SGLI Traumatic Injury Protection Program (TSGLI) Rates Unchanged

Servicemembers covered under the full-time SGLI program are automatically covered for the TSGLI program. Servicemembers’ Group Life Insurance Traumatic Injury Protection (TSGLI) provides financial assistance for servicemembers who experience a severe or traumatic injury. This includes combat injuries, as well as injuries that may occur on or off duty.

TSGLI coverage applies to active duty members, Reservists, members of the National Guard, those performing funeral duty honors, and one-day muster duty. The cost is $1 per month. You can read more about TSGLI benefits here.

Military Car Insurance – How To Save Money On Your Next Policy

Car insurance is a topic many military members pay little attention to. In fact, most people don’t pay attention to it. With everything else going on in our busy lives, it’s easy to set it and forget it. While that is the easiest route to take, it may not be the most financially prudent. Think about the last time you moved or PCS’d. Did you get a new auto insurance quote? Or did you simply update your policy and go about your business as usual? When was the last time you got an new auto insurance quote?

military car insuranceThe easy thing to do when you move is update your current policy to reflect your new address. It only takes 10 minutes on the phone and you can go about your business. But many people don’t realize that requesting quotes from multiple insurance companies only takes a few extra minutes, and can save you hundreds of dollars.

There are other ways to save money too. Making a few small changes to you driving habits or insurance policy can also save you hundreds of dollars a year. The following tips will help you save money on your car insurance rates. Some of them will be easy to do, while others might take a little work. But with a little planning, you can enjoy adequate coverage and save money.

How Military Members Can Save on Car Insurance

There are several other things you can do to keep your auto insurance rates in check. The best place to start is with an annual rate quote. It’s a good idea to compare your insurance rates at least once a year, or any time you move to another location. Even moving across town can affect your insurance rates! We have a list of providers further down in the article. But first, here are some more ways to save on military car insurance:

Good driver or safe driver discounts. There are many factors that contribute to the insurance premium you pay for car insurance. One of these factors is your driving record. If you are prone to speeding and/or accidents you will pay the price in higher insurance premiums. Your driving record to an insurance company is similar to your credit score with a lender. Both are used to assess risk and determine just how much you are going to pay in the long run. Many insurance companies offer discounts the longer you go without a blemish on your record. Some companies even reduce or eliminate your deductible with a good driving record!

Inquire about multiple policy discounts. Many insurance companies offer discounts when you insure one or more vehicles under the same policy, or when you bundle insurance policies together. Examples include homeowners or renters insurance, recreational vehicle or motorcycle insurance, high value property insurance, and more.

Review your driving habits. The number of miles you drive each month affects your rates. You may be able to save money each month by reducing the number of miles you drive, or shifting your primary vehicle to the less expensive vehicle if you own more than one car. Make sure your policy is up to date, especially if your commute changes. You may also be able to get better rates if you have a car you only drive on weekends, to and from car shows, or for special needs. Examples include a classic car, light duty pickup, hunting vehicle, etc.

Ask for other discounts. Some insurance companies also offer additional discounts. Examples include safety features on your vehicle, such as day time running lights, security or safety features, vehicle alarm, or the willingness to put a data recorder on your vehicle so the insurance company can track your driving habits. Some insurance companies also provide discounts for seniors, members of professional organizations or those in specific occupations.

Good Student Discounts. Insuring teems is often very expensive. But studies have shown that students with good grades represent a lower risk class than students with poor grades. Inquire about good student discounts if you have a teen on your policy.

Consider your vehicle. Certain vehicles are simply more expensive to insure than others. Some of the features considered when determining your insurance premium include the make, model, safety features, performance capability and cost to replace or repair the vehicle. This does not necessarily mean that the more expensive your vehicle the higher your premium. However if you are driving a sports car or perhaps a foreign model, you will often find yourself paying more than the run of the mill domestic variety.

military motorcycle insuranceIn some cases, you will be better off insuring certain cars or motorcycles with different insurance providers. For example, when I bought my motorcycle a few years ago I inquired about adding it to my auto policy. My auto insurer at the time, USAA, recommended I look elsewhere for a motorcycle policy because they didn’t believe they would offer competitive rates. They offered me a quote, and I also looked at their recommended provider. It was cheaper for me to insure my car through USAA and my motorcycle through another provider (not many insurance companies would recommend using a competitor, which is one reason I love USAA!).

I later sold my motorcycle and bought a classic muscle car. This time, USAA offered good rates, but the coverage and replacement value were less than if I went with a specialized insurance provider. I recommend looking into insurance through Hagerty if you have a classic or premium auto. They offer excellent rates.

A higher credit score can equal lower premiums. While they don’t seem related, your credit score can actually have a big impact on your insurance premiums. Car insurance companies look at your credit score as a risk indicator. Monitor your credit score to ensure your premiums are where they should be. (learn how to get your free credit score, without a credit card).

Put your vehicle insurance on vacation when you travel or deploy. You can contact your insurance provider and have them reduce your insurance if you won’t be driving your car while you are deployed. For example, I my premiums were reduced to around $10 a month when I deployed because I wasn’t driving the vehicle. I had them change the  policy effective the day after I left, and I reactivated my policy before I returned. Be sure to let them know you won’t be driving the vehicle and be sure to reinstate your policy when you return! (It’s better to put your vehicle in vacation status so your vehicle is insured the entire time, and so you don’t have a break in coverage).

Consider the insurance provider. The insurance industry is a competitive one which means you must review and compare several providers before making your final decision. You can do this with relative ease online where shopping for the best rate has become much easier than it was in the past. When comparing price be sure to compare the coverage as well, the least expensive policy is necessarily the best if you end up paying more out of pocket.

How to Shop for Auto Insurance Quotes

There are dozens of insurance companies, from the major national companies, to local and regional companies. Your mileage may vary, so it’s always a good idea to compare quotes from multiple locations. A few tips: If you are stationed overseas, it’s worth looking into local options found in that country. But also take a look at insurance from companies like USAA and GEICO, both of which often have policies for service members located overseas. I first became a USAA member when I was stationed in the UK because that was the best option for car insurance for me. I looked into a policy from GEICO, but I was only 20 years old and wasn’t old enough for an overseas policy through them (this was well over a decade ago, so their policies may have changed).

It’s a good idea to compare multiple insurance quotes, and to make sure you are comparing apples to apples. So be sure to write down not only the monthly or annual payment, but the insurance terms, deductibles, and other information that will make it easier for you to compare policies. I usually create a spreadsheet and fill in the data as I make the phone calls. The columns in the spreadsheet would look something this:

  • Company, Monthly Price, Annual Price, Coverage, Deductible, Discounts, Roadside Assistance (yes/no), Notes

Having everything in a spreadsheet or written clearly on paper makes the quote process easy and efficient. You can usually get through a quote via phone in about 10 minutes, and you can often get multiple online quotes in a just a couple minutes. Then it’s as simple as comparing the policies on your spreadsheet.

Where to Shop for Auto Insurance Quotes

The following companies offer auto insurance quotes online. As always, the rates will depend on many factors including your driving record, credit score, location, types of vehicles you want to insure, etc. Your best bet is to contact several companies and compare policies before making a decision. We can only list national companies here, so it’s also a good idea to check local or regional insurance carriers.

Get an Auto Insurance QuoteUSAA. I have been a USAA member for over a decade now, and have used them for my auto insurance for most of that time. They have always been helpful when I have made a claim, and even recommended I look at other options when I inquired about insuring my motorcycle and classic Corvette. Their transparency and customer service has earned a life-member. But it’s also a good idea to shop around. Get a free auto rate quote from USAA.

Get a GEICO Quote Today!GEICO. Many people don’t realize this, but GEICO actually got their start based on the USAA model. While USAA focuses on military members and their families, GEICO originally focused on serving Government Employees (Government Employee Insurance Co.). There is no business relation between these two companies now, but GEICO offers an excellent product and affordable rates. As they say – 15 minutes can save you 15% or more on your auto insurance. It’s worth a quote to find out! Click here for a free auto rate quote from GEICO.

Auto Quote from EsuranceEsurance (an All-State Company). Esurance started out as an online insurance company wand was later acquired by Allstate. They offer great rates and excellent customer service. Get a free auto policy quote from Esurance.

The Hartford/AARPThe AARP® Auto Insurance Program from The Hartford. The AARP(R) Auto Insurance Program from The Hartford offers AARP members exceptional coverage at great rates. AARP members get an insurance quote and buy car insurance from The Hartford. Available for those age 50 and up. Save on Auto Insurance if you’re over 50. Click here for a Free Quote!.

Allstate. Not only does Allstate have excellent commercials, but they have great customer satisfaction ratings and competitive rates. Get a free auto insurance quote from Allstate.

State Farm. I have numerous friends who use and recommend State Farm. Since they are a full service insurance provider, you can often get bundled insurance policies to save money through them. You can often find additional discounts through them as well. Many State Farm offices are found locally, so check your local phone book to find an agent near you, or check online.

Multiple quotes in one place: The following companies can help you get more than one quote at a time, which may save you time. However, you may also receive a few extra phone calls or emails.

These are just a few of the ways in which you can save money on car insurance. To ensure you are getting the best price and coverage available, spend some time doing your own research and do not be afraid to shop around. There are almost always better deals available if you are just willing to put forth the effort to find them.

Photo credits: Robbie Howell, driver Photographer

You Need Renters Insurance When Living In The Barracks

Renters insurance is a critical piece of insurance coverage that every renter needs to have. It is cheap and easy to obtain. But, many young members of the military do not think about having renters insurance while they live in the barracks. Even if you are single and the federal government provides you with a free place to live and food from the dining facility, you still need to purchase renters insurance to cover your personal property and possessions.

The Military Does Not Cover Personal Property

Like many large corporations, the military is self-insured against losses. If a government building burns down, the United States military has enough capital reserve to simply rebuild it at a later date. This of course is not the same thing for a Soldier, Sailor, Airman, or Marine.

It would devastate most members of the military to lose everything in a fire. Like renting from a landlord, the military’s good graces and insurance policies only cover the building’s structure. It does not cover any of your personal possessions inside the building. So, if there is a fire, tornado, or other natural disaster which destroys the building and its contents, your personal property will not be covered unless you have renters insurance. This goes for those living in any kind of military housing, including on or off base housing, the barracks or dorms, or transitional housing such as billeting.

renters insurance military barracks

You need renters insurance, even in the military barracks.

Theft Rates Are High In The Barracks

Like living in a college dorm room, the likelihood of being the victim of theft in the barracks is higher than you would experience simply if you were living in an apartment. There is also a higher chance of theft in the barracks than if you owned your own home. There are far too many instances whether theft can occur such as roommates you barely know, doors that are all too often left unlocked or open, field exercises where thieves know your away, and the list goes on and on. You need renters insurance to cover your possessions.

Renters Insurance Covers You While You Move

Many members of the military do not realize that renters insurance also protects your possessions while you are en route to your next duty assignment. Should you have a theft or a fire while traveling, you will be covered with renters insurance. You may think that you do not need renters insurance because you can file a claim against the moving company, but renters insurance will also help you fill in the gaps that the moving company manages to wiggle out of paying. Inevitably, your claim for damage will not cover all of your losses, and renters insurance can help fill in the gap.

The beauty of renters insurance is that it is one of the cheapest types of property insurance available. For as little as $20 or less, you can have insurance that covers tens of thousands of dollars worth of your property in the barracks. It is a very small price to pay for a lot of peace of mind. Do not get caught with the incorrect assumption that you do not need renters insurance while living on post in the barracks. That may be a time where you need it more than ever, and you do not want to be caught short without it.

Get a Free Renter’s Insurance Quote at USAA.

Photo By: Lance Cpl. Andrew D. Thorburn

Why Military Members Need Renters Insurance

The recent changes to BAH have had a trickle down effect that may not have been anticipated by the DoD when they initially made the new rules. When making the changes, the DoD decided they would eliminate the renters insurance portion of BAH. Previously, BAH included a small monthly amount to cover renters insurance based on local rates (averaging around $20 per month in most locations).

military renters insurance policySince this component of BAH was removed, the US Air Force has removed the requirement for landlords in privatized housing to provide renters insurance at no cost to military renters (this doesn’t affect current leases; only leases made on or after January 1, 2015). There is no requirement for individuals to carry renters insurance, but it’s incredibly smart to do so – especially when you can often find coverage for as low as $12 per month. Here are the reasons why every renter needs renters insurance.

All Military Renters Need Renters Insurance – Even in Base Housing

Moving from post to post with the military is stressful. Not only do you have to pack, move, and unpack everything you own (again!), but there’s the financial aspect of the equation as well. You have to get utilities turned on and off, get your TV service moved, find a new bank or at least change your address with your bank, do the same with your credit card companies… the list can become overwhelming.

And this is on top of your normal 10-12 hour day being in the military.

However, let me caution you on one thing you simply cannot afford to go without no matter how complex and confusing your move is: renters insurance.

This critical piece of insurance can make or break your situation should something terrible happen to your residence. Going without it can cost you dearly, and sadly, purchasing it is amazingly inexpensive. (You can get a renters insurance policy for as little as $12 per month).

What is Renters Insurance?

Renters insurance is insurance coverage that will replace the contents in the rental unit you are in. Your landlord has his or her own coverage to protect the structure of the home, but that insurance doesn’t protect everything you own. With renters insurance if your rental home burns down you will be able to replace everything you own — your clothes, your electronics, your furniture — up to whatever the coverage limit is.

Why is Renters Insurance So Important for Military Members?

Renters insurance is important for every renter, but the point is more dramatic when you consider most members of the military rent rather than own their residences.

Going without renters insurance is financially foolish because of how inexpensive the coverage is on a monthly basis compared to what level of coverage you receive.

Imagine if your home burned down and you come home only with the clothes on your back. You have to repurchase every single thing you own down to socks and toothbrushes. You’re dealing with the emotional trauma of coming home to a destroyed structure, but the financial cost of going without insurance can have an even larger impact.

Live in the dorms or barracks? You need renters insurance too. The military will not cover the cost of your items if they are lost, damaged, destroyed, stolen, etc. But you will be covered if you have renter’s insurance.

Get a Free Renter’s Insurance Quote at USAA.

How to Lower Your Renters Insurance Costs

As mentioned, renters insurance is cheap for the level of coverage you receive. You can often find renters insurance policies offering $20,000 in coverage for less than $20 per month. That’s only $240 per year to replace every item in your house — assuming it fits under that coverage cap.

If you think $20 per month is too pricey, don’t worry. You can use a few strategies to get a discount on your renters insurance:

Use Your Military Discount

Many companies in the United States offer a military discount. Don’t forget to ask for your discount with your insurer (or from multiple insurers if you are price shopping). You might be surprised to find you can get a discount on your military renters insurance.

Bundle with Other Insurance Policies

The most common strategy to lower your insurance costs is to bundle them with other coverages. The same is true for renters insurance. Check with your automobile insurance coverage company to see if they offer renters insurance. Often you can get renters insurance for practically free by combining it with your car insurance.

Where to Purchase Renters Insurance

There are multiple companies that offer renters insurance. Start with your current insurance provider to see if you can get a discount for bundling your policies. Another option is USAA, which has renters insurance policies for as little as $12 per month.

Which Type of Life Insurance Should I Buy?

There are several different types of life insurance policies available. If you understand the basics of each type, you can better select a life insurance policy that suits your needs. Some life insurance policies provide just a death benefit, while others offer a permanent, or cash value. There are pros and cons to all of these types of life insurance, so it’s a good idea to familiarize yourself with them before purchasing your policy.

Term Life Insurance

types of life insurance policiesThe easiest type of life insurance to understand, and the least expensive, is a “term life” policy. It has no cash value. The purpose of a term life insurance policy is to pay a specific amount to your beneficiary when you die. If you purchase a $100,000 term life insurance policy, then it will pay $100,000 to your beneficiary. The primary benefit of using a term life insurance policy is that the insurance premiums remain constant throughout the duration of the policy. If you get a 30 year life insurance policy, then your premiums will be the same for the next 30 years, even if you contract a life-threatening illness, or something else happens to your ability to buy insurability.

The “downside” of a term life policy is that you will not have anything to show for it after your policy ends. I put the word “downside” in quotes because it isn’t a downside at all. We insure our cars, homes, and even cell phones every day and never worry about not having anything to show for the premiums when the policy ends.

Special life insurance information for military members:

Whole Life Insurance

A whole life insurance policy will provide a death benefit for your beneficiaries and also offers as a cash value with tax-deferred earnings. When you purchase the policy, you have a fixed premium amount which cannot increase as long as you make your agreed payments. This is why it is ideal to purchase whole life insurance when you are younger, as the premiums are less expensive than when you get older.

Many life insurance agents sell whole life insurance as an investment. You can use it as an investment, but it is almost always better to keep your investments and life insurance policies separate. Here are some things to know about a whole life insurance policy if you decide to use one as an investment:

With a whole life policy, you choose to receive dividends from your account, or to add them back to your policy to reduce your required payments. You can withdraw cash from your policy if you need to.

You cannot choose to invest in different types of accounts with your cash value from a whole life policy. The insurance company is in control of where the money is invested.

Which is better, term life insurance, or whole life insurance? Term and whole life are the two most common forms of life insurance. In most cases, people are better of choosing a term life insurance policy. The reasons for this are outlined in this article comparing term and whole life insurance. However, there are some instances when it may make sense to go with a whole life policy.

Variable Life Insurance

Like a whole life policy, the variable life insurance gives permanent protection with account flexibility and a tax-free cash value account. The amount of death benefit will vary depending on how much you earn with the cash value account, which means there are no guarantees to how much your death benefit would be when you pass away. You can also borrow money from a variable life insurance policy. Variable life insurance policies are often sold as hybrid investment products and can be complicated to understand. The benefit is that these policies may have special tax advantages.

Universal Life Insurance

Universal life insurance policies often split your premiums into a death benefit and an investment. For example, a person might start out with a $100 monthly premium of which $20 goes to the death insurance, and $80 goes toward the investment portion of the account. This gives the policy a cash value and the ability to pay out upon the death of the individual. Your beneficiaries receive a death benefit when you die, and you’ll have a tax-deferred cash value account that you can borrow from if you need to. You earn the market rate of interest on your cash accumulation, but you can’t invest your money in separate types of accounts. Universal life insurance policies offer flexibility with premiums and the face amount.

Universal Variable Life Insurance

If you’re looking for a life insurance policy that gives you control over the cash accumulation, a Universal Variable Life provides more features than other types of insurance. These types of insurance policies provide death benefits to your beneficiaries, and allows you to invest cash value into your choice of money markets, bonds, and stocks. This means the success of the earnings depends on your ability to manage the account and move money to strong investments.

Universal Variable Life also offers premium flexibility and allows policyholders to borrow money from the account or take a withdrawal. If you terminate the policy early, you receive less cash value than you would if you met the full term of the contract.

Mortgage Life Insurance

Mortgage life insurance isn’t your traditional life insurance policy – the sole purpose of this policy is to protect the lender. Here’s how it works: You take out a policy when you buy your home, and the policy will pay off your home in the event you die. This sounds great, but the downside is that your premiums often stay the same, even though the payoff benefit decreases as your mortgage principal decreases. In most cases, it is better to take out a term life policy for the amount of your mortgage, since your payoff benefit doesn’t decrease. There are times, however, when this might be a good idea. But it is generally limited to people who are not able to obtain life insurance any other way (many mortgage life insurance policies do not require an exam). Here is more info about mortgage life insurance and Veterans Mortgage Life Insurance.

Which Type of Life Insurance is Best?

As with all major financial decisions, it depends on your unique situation. The most important thing to consider is whether or not you have enough life insurance to protect your loved ones in the event you die. That is the primary purpose of life insurance – everything else is secondary. The next thing to consider is whether or not you can understand the ins and outs of the policy, and whether you have a special situation where the special tax advantages of some of these accounts come into play.

For most people with an uncomplicated situation, a term life insurance policy will be the best type of life insurance policy to buy. Term life insurance is straight forward – you pay X-amount per month and receive X-amount of coverage. At the end of your policy you can choose to open another policy, or do without.

The other life insurance policies described in this article take more work to understand and may not offer the right type of coverage for some people. If you choose to go with one of these policies, be sure you understand how the insurance policy is written, the ins and outs of any investments that are run through the policy, and any fees you will pay either directly, or indirectly through the policy (many investments held in insurance policies are notorious for having high fees). My goal isn’t to bash any type of life insurance, but rather to point you in the right direction. In most cases, individuals will be best off by purchasing a term life insurance policy. If your concern is also having an investment, then you should be able to do that through a separate investment rather than with a life insurance policy.

How Much Life Insurance Do You Need?

One of the greatest gifts you can give your family is adequate life insurance. Your life insurance coverage is designed, of course, to provide your loved ones with a means of support should something happen to you. A good life insurance policy can provide you with peace of mind now, and take care of your family later. But how much life insurance do you need?

Deciding How Much Life Insurance to Buy

How much life insurance do you need?Your first step is to figure out how much life insurance you need. The easiest thing to do is to use a rule of thumb. One of the most common rules of thumb is to get life insurance coverage that is ten times your annual salary. So, if you make $45,000 a year, you would need at least $450,000 in coverage.

Another rule of thumb, though, is to get enough coverage to provide your family with your yearly income each year indefinitely. A common rule is to have enough capital so that you can sustain a 4% withdrawal rate indefinitely. The idea is to put the money in an account that offers a return that allows your family to live off the interest. This way, your family will never run out of funds. In order to generate $45,000 a year in interest at 4%, you need $1.125 million in capital. So that’s the coverage you need if you follow this rule of thumb.

Finally, you can do your own assessment of what you need. In order to do that, you add up your expected expenses for the next few years. Here’s one way to do this:

  • Add up how much you need to provide your family with your annual income until your youngest child turns 18. If your youngest is five, then you need to multiply your salary by 13. In our example, that $585,000.
  • Next, add up all of your consumer debt, including student loans, car loans, and credit cards. If you have $6,000 in credit card debt, $10,000 left on your car loan, and $15,000 in student debt, that’s $31,000. If you are eligible to have your student loans paid because of your service, you might decide not to include them in your calculations, so that’s $16,000.
  • Consider your mortgage, if you have one. If you have $185,000 left on your mortgage, use that in your calculations.
  • Other items to consider include whether or not you want to help your children with college, or if you want to help with other purchases along the way. However, it’s worth noting that as your family pays down the mortgage, the money can be used for something else.

Add up everything on your list. In this case, if you leave out the student loans, and decide not to go beyond debt, the total is $786,000.

Other Considerations

Of course, not everything is black and white. You need to consider needs specific to your situation. For example, do you have a family member with special health care needs? Are you a military retiree with a pension and TRICARE for the rest of your life? If you opted for the survivor benefits plan, then you may be able to decrease your life insurance policy if your spouse will have your pension. Do you have a lot of savings and investments? Some people have enough money saved to provide for their families, even if they are no longer able to contribute to the family. The possibilities are endless, so consider all possibilities and increase or decrease your insurance policy accordingly.

Special Life Insurance Options for Military Members and Veterans

Military members and veterans have special options available to them, including the government sponsored SGLI plan, available to current military members, and the Veterans Group Life Insurance plan, which is available to veterans. Both of these are low cost plans available to military members and veterans. These plans may be a good idea, since many civilian plans don’t cover deaths caused by acts of war. You can also convert your SGLI to VGLI when you leave the service.

There are also some life insurance plans offered by civilian companies which are great options for military members and veterans. One good example is life insurance from USAA. USAA offers insurance, banking, and investment products, and limits membership to military members, their families, and children of USAA members, so they know what it means to serve. You can check your USAA eligibility here, and learn more about their financial products.

Related Content: How Much Life Insurance Should Military Members Buy?

Bottom Line

How you determine what’s adequate for your family is up to you. There are different methods of figuring out how much life insurance your family needs. Ultimately it’s up to you to decide how much coverage is right for your family. The key is choose the amount of coverage that you are comfortable with, and that you feel will provide your family with what they need, for as long as they need it.

Health Care Benefits After Separating from the Military

The most important thing to consider when separating from the military is ensuring your immediate needs are taken care of. This includes making sure you have some cash coming in to cover your bills, a roof over your head, and health care coverage for you and your family. Unfortunately, you can only take your military health care benefits with you in limited circumstances, which we will cover in this article. If you don’t meet the limited qualifications for taking your TRICARE benefits with you, then you will be required to find your own health care. We will cover a few other options for finding affordable health care coverage in this article. These tips can help you find the best places to get medical benefits to make sure your family is covered.

Health Care Insurance After Separating from The Military

With only a few exceptions, military health care benefits cease for you and your family the day you leave the military. Some exceptions include retirees, those who qualify for Transitional Assistance Management Program (TAMP), and some veterans with service connected disability ratings. In the first two examples, your family will also continue to be covered by the military health care system. Those who qualify for VA medical care will no longer receive care directly from the military (the VA will take over), and family members will not be eligible for benefits.

Retiree medical care: If you are an active duty retiree, you should continue to be eligible for TRICARE benefits. These benefits differ slightly from active duty benefits, as you will have to enroll and pay a small annual fee for family members, but they are close enough in scope that the transition should be relatively painless compared to seeking out your own insurance.

Non-retirees: If you are not a retiree, your options are different. We will cover some options for you below.

Transitional Assistance Management Program (TAMP)

The Transitional Assistance Management Program (TAMP) is a short term health care program which will give you and your family an additional 180 days of health care coverage after you separate from the military. The benefits are the same as active duty health care, and if you qualify, you and your family will receive DoD issued ID cards for access to health care on base. TAMP is designed for military members and their families who are required to make a quick, and sometimes unexpected, exit from military service. Eligibility for TAMP depends on 2 factors: the reason you are separating form the military, and you must have an honorable discharge. Some qualifying reasons for separation include involuntary separation, stop-loss in support of a contingency operation, voluntary agreement to stay on active duty for less than one year in support of a contingency operation, receiving a sole survivorship discharge, and a few other select circumstances.

If you are eligible for TAMP, it should show up in your DEERS profile, and it is recommended you apply for these benefits before you separate from the military. This will give you 6 additional months of active duty health care coverage, which will hopefully be enough time to find a civilian health care plan, or transition to the Continued Health Care Benefit Program (CHCBP), which is covered below.

If you do not qualify for TAMP, you and your family members may still be eligible for Continued Health Care Benefit Program (CHCBP) or some of the other health care options listed in this article.

Continued Health Care Benefit Program (CHCBP)

In the civilian world, companies offer their employees COBRA Health Insurance Coverage, which allows their employees to take their group health insurance with them when they leave their company. The only catch is the former employee is required to pay for the entire cost of the plan (i.e. it is no longer subsidized by their former employer). COBRA benefits are usually good for 18 months.

The military doesn’t have an exact COBRA program, but they offer something very similar with the Continued Health Care Benefit Program (CHCBP). Participants who are leaving the military health care system (TRICARE) are able to buy into the CHCBP.

Program eligibility: This program offers 18-36 months of benefits and is open to anyone who is leaving TRICARE, including military members and their families, children who lose age eligibility for TRICARE, divorced spouses, etc. This program is open to a wide variety of people, but there is a cost involved: the premiums for FY 2012 is $1,065 per quarter for individuals and $2,390 per quarter for families.

Here is more information about the Continued Health Care Benefit Program (CHCBP).

Group and Individual Health Insurance

Health insurance in the US is usually broken down into two categories: group health care coverage and individual health care coverage. A group health care plan is a health plan that is shared by a large group of people. These plans are often offered by employers as part of your benefits. TRICARE is an example of a group health care plan. An individual health care plan is just what they sound like – a health care plan that is for an individual or an individual family, and is not part of a larger group benefits plan.

How to get a group health care plan: A general rule of thumb is that you will be able to get a group health insurance plan through an employer, trade group, or another large group. Some companies also offer health care benefits to part time employees. It’s always a good idea to find out if there is a waiting period before you are eligible for benefits.

Individual health care plans: Individual health care plans vary by state and region, and there is no way I can list or cover them all on this site. The most important thing to know is which type of insurance you need, then compare plans to find the best cost/benefit ratio for your family. The best place I have found to compare individual health care plans online is, which offers a variety of health plans in each state.

There are pros and cons to both of these types of health care plans, and you can learn more about them here: Individual Health Insurance vs. Group Health Insurance.

Attending School? Look Into Educational Health Insurance

Most colleges and universities require students carry health care coverage while attending school, and many of them also offer affordable health care plans to enrolled students and their families. Keep in mind that you need to be enrolled in courses to be eligible for these health care plans, so plan accordingly if you are separating from the military and won’t be starting classes for a few months.

Make sure you are covered

Health insurance is one of the most important types of insurance you can ever purchase – it doesn’t take much to run up a large hospital bill, and having insurance can protect you from major bills which may otherwise break you.

Continued Health Care Benefit Program – Health Care for Transitioning Veterans

One of the most overlooked aspects of leaving the military is losing your military health care benefits. Love it, or hate it, TRICARE provides military members and their families with a stable health care plan which is virtually unrivaled in the private sector. If you have just left, or are leaving the military health care system soon, then the Continued Health Care Benefit Program (CHCBP) may (literally) prove to be a life saver.

Continued Health Care Benefit Program

Losing your military health care benefits soon? Look into the Continued Health Care Benefit Program

The Continued Health Care Benefit Program is available to everyone who is leaving TRICARE (the military health care system), including military members, their dependents, unmarried former spouses, children, and other dependents who qualify for TRICARE. That means the CHCBP may be a good option for service members and their families who are separating from the military, spouses going through a divorce, children who are moving out of the house or lose age eligibility for TRICARE, and other situations. Let’s take a look at this program including what it covers, who is eligible, and how to apply for benefits.

CHCBP – Military Version of COBRA Health Coverage

In the civilian world, companies that offer group health care coverage to their employees are also required to offer them COBRA Health Insurance Coverage, which makes employer sponsored health care benefits available to former employees for up to 18 months after they leave their job. This helps ensure people have access to health insurance that is not tied to their employment. The primary difference is that the employer often subsidizes benefits while the employee works for the company, but they are not required to do so under COBRA. Basically, the former employee still has access to the same benefits, but they are required to pay 100% of the cost of the program.

While the Continued Health Care Benefit Program (CHCBP) is similar to COBRA, it isn’t actually a true COBRA benefits program, since the health care provider under CHCBP isn’t TRICARE. But the program is similar to COBRA since the benefits under CHCBP are very similar to those under TRICARE Standard, and the members are required to pay premiums to participate in the program. However, the cost may actually be less than many commercial sector COBRA benefits programs.

What the CHCBP Is, and Isn’t

The Continued Health Care Benefit Program is an optional health care program which, like COBRA benefits, is designed to be a transitional medical care program, not a permanent solution. It is designed to provide insurance in between military health care coverage and a civilian health care program. Though the CHCBP is not TRICARE, it does follow most of the same rules and benefits as TRICARE Standard. The main difference, as mentioned above, is that participants are required to pay a premium to participate.

Continuous health care coverage and pre-exisiting cverage. The benefit of using the CHCBP is that you will have continuous health care coverage, which can be important in qualifying for a new health care plan, especially if you are buying an individual health care plan, or if you have pre-existing medical conditions. You can also elect to purchase a pre-existing condition coverage health care plan through the CHCBP, which may entitle you to coverage for pre-existing conditions which may not be covered by your employer’s group plan or by an individual health care plan.

Qualifying for Continued Health Care Benefit Program Benefits

The main eligibility requirement is that the member must be coming out of TRICARE coverage, or the Transitional Assistance Management Program (TAMP). This program is open to active duty military members, their families and dependents, divorced spouses who are not remarried, and children who exceed the age requirements for TRICARE.

You must decide quickly – or you lose eligibility. Eligible members only have 60 days in which to elect to purchase Continued Health Care Benefit Program benefits. (30 days for TRICARE Reserve Select (TRS) members who have remaining eligibility). The clock starts running when the member separates from active duty, or the member loses military health care benefits.

Eligibility is limited to 18 or 36 months.

  • 18 months for separating Service Members and their families if service member elects family coverage.
  • 36 months for a family member who ceases to meet the requirements for being considered an unmarried dependent child or spouse.  (In some cases, unremarried former spouses may continue coverage beyond 36 months if they meet certain criteria. )

Eligibility beyond 36 months for certain former spouses. Former spouses who meet the following criteria may be eligible for more than 36 months of CHCBP benefits (see the US Code for more specific info):

  • Did not remarry before age 55
  • Was enrolled in an approved health benefits plan under this chapter as a family member at any time during the 18-month period before the date of the divorce, dissolution, or annulment
  • Is receiving any portion of the retired or retainer pay of the member or former member servicemember, or has a court order or written agreement which provides a share of the retirement benefits.

Continued Health Care Benefit Program Cost and Management

The Continued Health Care Benefit Program  is run by Humana Military Healthcare Services, Inc. The cost of the CHCBP premiums is based on the Fiscal Year (beginning October 1, and ending Sept 30). The cost for Fiscal Year 2012 is $1,065 per quarter for individuals and $2,390 per quarter for families. On the surface, these premiums appear to be expensive, especially when compared to the no-cost TRICARE Prime you are most likely used to. However, these premiums are often comparable to unsubsidized group health care plans.

Here is more info on enrollment, including eligibility requirements for Guard/Reserve members who were activated. You will also need to contact Humana Military healthcare services in order to start the program. Please see the previous link, or contact them at the info listed below:

Humana Military Healthcare Services, Inc.
P.O. Box 740072
Louisville, KY 40201
1-800-444-5445, option 4

Is the Continued Health Care Benefit Program a Good deal?

Health care in the US is a complicated business and finding the best plan can be a chore – especially if you are not immediately employed when you separate from the military. My recommendation is to start looking at your health care options well in advance of losing your TRICARE benefits (this advice stands for all TRICARE members, including the active duty service member, their families and dependents, and spouses going through a divorce).

It is always a good idea to look into health care through your employer, and if you do not have a job lined up, you should investigate the cost of an individual health care plan. Here is more info on comparing individual and group health insurance to better understand which options is best for you. You can also compare health insurance plans at a variety of vendors. My favorite based on personal experience is, which offers free custom health insurance quotes in each state.

If you are in good health and do not have any pre-exisiting medical conditions, you may be able to find a cheaper individual health care plan on your own. However, depending on your employment prospects and current health, you may find that the CHCBP is the most affordable option available to you (This can often be the case if you do not have a job right away and you have pre-existing medical conditions). Certain veterans are eligible for VA health care benefits, however, it may take time to establish eligibility, so it is recommended to have a health care plan in place before leaving the military health care system o avoid any breaks in service.

Transitional Assistance Management Program (TAMP) – Health Care When Leaving the Service

Transitioning from the military to the civilian world can be a stressful time, and the last thing you want to worry about is health care coverage for you and your family. That is why the military offers two programs to help transitioning military members maintain high quality health care coverage when they leave the military. The first program is the Transitional Assistance Management Program (TAMP), which we will cover in this article, and the other is the Continued Health Care Benefit Program (CHCBP), which we will cover in a different article.

Transitional Assistance Management Program (TAMP)

The Transitional Assistance Management Program (TAMP) is a short term medical care program which offers 180 days of health care benefits to military members and their families when they separate from the uniformed services.

These benefits are designed to help military members and their families who are transitioning from the military on short notice or involuntarily (see separation requirements below). This program is offers 6 months of coverage, which can help bridge the gap in insurance coverage until the member and his family can secure health care coverage through a civilian employer or through an individual health care plan after they leave the service.

Transitional Assistance Management Program Eligibility

Not all servicemembers qualify for TAMP upon separation from active duty status. Qualification is based on the reason for the separation from the military (see below) and requires an Honorable Discharge. You will need to prove your discharge characterization with your Certificate of Release from Active Duty, or DD form 214.

If you are eligible for TAMP, it should show up in your DEERS profile – contact your base personnel unit, or medical office for more information. This program is also not available to those who are serving on terminal leave – you will continue to be covered by TRICARE until your official separation date. Your TAMP benefits period will begin the day after you officially separate from active duty – so it’s important to do your research in advance so you know whether or not you will qualify for the program, and to give you time to apply.

Eligible reasons for separation from the military. This program is designed to help military members who might not have otherwise had time to prepare for the transition to the civilian world, as you can see by reasons for separation listed below. According to, military members are eligible for the TAMP when they separate from the military under the following conditions:

  • Involuntarily separating from active duty under honorable conditions
  • A National Guard or Reserve member separating from a period of active duty that was more than 30 consecutive days in support of a contingency operation
  • Separating from active duty following involuntary retention (stop-loss) in support of a contingency operation
  • Separating from active duty following a voluntary agreement to stay on active duty for less than one year in support of a contingency operation
  • Receiving a sole survivorship discharge
  • Separating from active duty and agree to become a member of the Selected Reserve of the Ready Reserve of a Reserve Component.

National Guard and Reserve members who are demobilized after serving less than 30 consecutive days on active duty do not qualify for TAMP.

If you do not qualify for the Transitional Assistance Management Program, you may still be eligible for the Continued Health Care Benefit Program (CHCBP), which is similar to a civilian COBRA benefits program. The Continued Health Care Benefit Program offers health insurance for 18-36 months after TRICARE eligibility ends and is open to military members and their families, including those who lose TRICARE eligibility through divorce, or when children lose eligibility because they get married or become too old. Certain military veterans may also be eligible for VA health care benefits depending on their status, service record, and other criteria.

TAMP Coverage, Cost, and Enrollment

The Transitional Assistance Management Program does not charge an enrollment fee for qualified servicemembers or their families. Eligible participants can be enrolled in TRICARE Prime or TRICARE Prime Overseas. If TRICARE Prime isn’t available in your area, you will automatically be enrolled in TRICARE Standard and Extra or TRICARE Standard Overseas.

Coverage and cost: Those receiving TAMP benefits will receive the same benefits as active duty members and will be subject to the same rules for that beneficiary category, including any applicable deductibles, cost-shares and copayments.  Transitional Assistance Management Program participants will be issued a DoD ID card displaying their eligibility for 180 days of medical care.

Enrollment: Because you will be leaving the active duty TRICARE system, you will need to re-enroll in TRICARE under the TAMP qualifications by completing a new enrollment form. It is recommended to complete your enrollment form while on active duty, to ensure a seamless transition. Enrollment is retroactive to your separation date.

More information: If you are separating from the military soon, or believe you may qualify for this program, then contact your personnel department or visit the TRICARE site for more information.

Maintaining Your Health Coverage is Essential

Maintaining your health care coverage is important for several reasons – the first of which is the obvious one, to pay for any major medical bills. But another reason many people aren’t aware of is to maintain continuous medical coverage, which is important when you are obtaining a new insurance plan, especially if you are obtaining an individual health care plan or if you have preexisting medical conditions.

TRICARE Offers New Program Providing Coverage for Young Adults Under 26

TRICARE recently extended benefits to young adults under age 26 under certain circumstances as part of the 2010 Patient Protection and Affordable Care Act. TRICARE Young Adult (TYA) opened for enrollment beginning May 1, 2011 and offers coverage for dependents of uniformed servicemembers, dependents must be under age 26, unmarried and not eligible for their own employer-sponsored health care coverage. Previously, TRICARE coverage ended when dependents reached age 21 or age 23 for full-time students (or when the dependents married).

TRICARE Young Adult eligibility:

TRICARE Young Adult

TRICARE Young Adult

You may be eligible for TYA if you meet the following criteria:

  • Must be a dependent of a uniformed servicemember who is participating in TRICARE
  • Over age 21* and under age 26
  • Unmarried
  • No employer sponsored health care coverage of your own

* Those under age 21 are still eligible for standard dependent TRICARE coverage; Participants may be eligible for standard TRICARE coverage until age 23 if they are a full-time student at an approved educational institution.

Coverage available under TRICARE Young Adult:

Regular TRICARE coverage ends at marriage, age 21, or 23 if attending school full-time. TRICARE Young Adult offers eligible dependents the same coverage they previously had under TRICARE until age 26.

Cost: TRICARE Young Adult offers eligible dependents access to TRICARE Standard coverage for monthly premiums of $186. Overall this is an affordable monthly premium compared to many individual health insurance options. Additionally, there are co-pays once you meet your deductible:

Type of Provider Outpatient Cost Share Inpatient Cost Share
Network Providers (Active Duty Family Member) 15% of the negotiated fee

    $16.85 per day ($25 minimum charge)

      Network Providers (All Others) 20% of the negotiated fee $250 per day or 25% for institutional services (whichever is less) plus 25% for separately billed professional services
      Non-Network Providers (Active Duty Family Member) 20% of the allowable charges $16.85 per day ($25 minimum charge)
      Non-Network Providers (All Others) 25% of the allowable charges $535 per day or 25% for institutional services (whichever is less) plus 25% for separately billed professional services
      Overseas Providers (Active Duty Family Member) 20% of the billed charges Per diem rate ($25 minimum charge)
      Overseas Providers (All Others) 25% of the billed charges 25% for institutional services plus 25% for separately billed professional services

      Note: Rates current as of May 1, 2011 and are subject to change. For more information, please visit the TRICARE Young Adultwebsite.