Making the right decision about life insurance is one of the most important choices you can make for you and your family. Since it’s a purchase we don’t make often, it comes with questions. Here are answers to a few we get most often.
How does life insurance work?
When you buy life insurance, you’re making an agreement with your chosen insurance provider to make monthly premium payments. The insurance company agrees to pay your designated beneficiary the benefit amount in force at the time of your death. It’s important when determining how much insurance to apply for to keep in mind that life insurance is intended to provide financial security for your loved ones.
How do I determine the coverage amount?
The amount of coverage you need can change over time depending upon your circumstances. Here are a few examples:
- You’re single with little or no debt: consider the cost of your final expenses (funeral).
- You’re married with dependent children, have debts such as a mortgage, car payment or credit card balances: consider the cost to cover your income for the period of time your family will need if that money is suddenly no longer available.
- You’re an empty nester finished raising your family, paid off your mortgage and other debts: Your life insurance needs are different, but you’ll still need to make certain final expenses are paid. And if you’re married, your family’s income may be considerably less when you are gone. Adequate life insurance can help to “fill the gap.”
To help guide your decision, use the handy Life Insurance Needs Estimator here. Think of it as calculating peace of mind that your family will be protected.
What’s the difference between individual and group life insurance?
Just like the name suggests, individual life insurance is a policy that covers you as an individual. You pay for the policy and own it.
Group life insurance is a single contract that covers a group of people. Typically, the policy owner is an employer or organization. Because the insurance risk is spread across more people, group rates are usually lower than those for individual coverage. In most cases, employer-paid group life insurance isn’t portable which means you lose the coverage when you leave the company. With USBA group life insurance, you own it so you can take it with you wherever you go.
Is Veterans Group Life Insurance (VGLI) my best choice to replace my Servicemembers’ Group Life Insurance (SGLI) coverage?
If you’re separating from the service, VGLI allows you to convert your SGLI coverage to a renewable term life insurance policy. However, VGLI only provides up to a maximum of $400,000 of coverage issued up to the amount of SGLI you had at the time of separation. USBA offers a maximum of $750,000 in combined plan coverage that can be used as primary or supplemental group life insurance protection. USBA also offers insurance protection for military spouses and eligible dependents.
USBA is a not-for-profit association that provides affordable insurance and other products and services for active duty military personnel, National Guard and reserve members, veterans and their families.
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