Life insurance is one of the most important purchases you can make. You want to be able to provide for your family in the event that the unthinkable happens to you.
Why buy life insurance? Life insurance exists for one reason – to provide a source of income for your family or dependents if you are no longer alive to provide for them.
How much life insurance do military members need?
There is no one-size-fits-all answer regarding how much life insurance you need. If you are the sole supporter of your family, then you would likely need more life insurance than if you were a single military member with no dependents or anyone else relying on your income for survival.
Where should military members buy life insurance?
For most military members, the Servicemembers’ Group Life Insurance (SGLI) program is the best option because it is available to everyone and will pay out even when the policy holder dies from an act of war or similar event (many private insurance policies have a rider that excludes death from an act of war). The SGLI policy also includes a long term disability rider called the Traumatic Injury Protection coverage (TSGLI).
SGLI offers great military life insurance rates. The government supported company, the Service Member’s Group Life Insurance program offers troops insurance coverage of $400,000 for only $27 per month. Here are the rest of the SGLI rates.
Should Military Members Purchase Private Life Insurance?
For most people, the SGLI offers the best prices and features (payment for death due to act of war, automatic disability clause). However, if you do not think the SGLI offers enough coverage, then you should consider purchasing insurance from a private vendor.
Buying a private life insurance policy. Private policies should be considered for those who believe they will need more than a $400,000 policy. How much term life insurance should you buy? If you need an amount above and beyond the SGLI limits, then you should shop for policies through multiple providers to find the best deals. One of the best places to start is with USAA, which is an insurance and financial company which limits its membership to military members, veterans, and children of USAA members. Learn more about USAA membership, or read our USAA review.
Caveats regarding private life insurance for military members. Many private life insurance policies have clauses that do not cover death caused by military actions or during an act of war. Military members need to read their policy carefully before signing the contract to ensure that they are covered at all times, including during an act of war. This is where the SGLI is often better than private life insurance policies – the SGLI covers deaths caused by acts of war and other causes.
Do single military members need life insurance?
When I was in the military I noticed many of my young squadron mates purchased the maximum amount of life insurance through the SGLI. The maximum coverage is $27 per month ($324/yr), which is a lot of money to spend when you don’t need much, if any, life insurance coverage. If you are single and do not have any dependents, you can get away without any insurance, or only the minimum. You can buy a $50,000 policy for $4.45 per month ($51/yr). A $50,000 policy should be enough to pay off most debts and cover any other expenses. Remember, military burials are free.