Protecting those you love

As a young combat engineer on active duty, I never paid much attention to life insurance. Although I was married, I knew somewhere in the back of my mind that I was paying for SGLI and the Army would provide for my wife should anything happen to me. I realize now that I had failed to consider some fundamental, important questions:

How much life insurance is enough for me?
What type of coverage do I need?

Do I have enough insurance?

This is a hard question and is related to another: Do I even need insurance? The answer is that if someone else depends on your income, you probably need life insurance. If someone depends on you, then you need enough insurance to cover the shortfall in expenses that would result from losing your income. Although there is no “right amount,” some items to consider are funds to pay for your mortgage, ongoing living expenses, children’s college and replacing big-ticket items such as an automobile.

What type of insurance do I need?

For most young adults and families, an inexpensive, quality term policy from a reputable company makes the most sense. SGLI is an example of a term policy. Unfortunately, SGLI coverage ends when one leaves the service. Additionally, National Guard and Reserve service members must meet eligibility requirements while serving to qualify.

In contrast, any member of the armed forces, regardless of duty status, and any honorably discharged veteran can take advantage of a quality term policy from AAFMAA, such as AAFMAA’s Level Term I Policy. This insurance provides a large amount of coverage for relatively low premiums. And, in AAFMAA’s case, the premiums never change for the term of the policy.

As one’s coverage needs decline later in life (because major expenses are paid off), it still makes sense to have a small amount of permanent insurance coverage. Permanent policies have higher premiums, but they accumulate cash value and never expire. Moreover, some of them can help in other ways. For example, AAFMAA’s Value Added Whole Life policies also include a Long Term Care Settlement Option at no additional cost. LTCSO gives the owner the option of converting the death benefit on an eligible insured life — normally payable only upon the death of the insured — into regular periodic payments prior to death, specifically to defray the cost of nursing home, custodial or home health care for the insured.

Later in life, predictable income may take priority over a death benefit. In this case, a policy like AAFMAA’s ANNUITYLife can provide the best of both. ANNUITYLife is a specially designed whole life insurance policy that gives the owner the option to annuitize the policy into a stream of predictable payments if desired.