How to Choose the Right Life Insurance

Choosing life insurance is a tough task. Here are a few tips to help you:

1. If an agent or company contacts you and wants you to cancel your current policy to buy a new one, contact your original agent or company before making any decisions. Canceling your policy to buy another could be very costly to you.

2. Take your time and make the right decision. Don’t rush into a decision.

3. When you purchase a policy, make your check payable to the insurance company — not to the agent. Be sure you are given a receipt.

4. Periodically review your life insurance plan, particularly when your financial responsibilities undergo a significant change.

5. After you have purchased an insurance policy, keep in mind that you may have a “free-look” period for 10 days after you receive the policy. You can change your mind during this period. If you decide not to keep the policy, the company will cancel the policy and give you an appropriate refund.

6. If you have a complaint about your insurance agent or company, contact the customer service division of your insurance company. If you still are dissatisfied, contact your state insurance department. Most departments have a consumer affairs division that can offer help.

7. Discuss the insurance plan with your spouse so that he or she understands which gaps the insurance proceeds are designed to fill.

8. Estimate your total insurance needs by examining the needs and various stages of your surviving spouse’s life. Buy insurance to cover those gaps.

9. Term policies will generally provide military families with the most coverage for the smallest premium and are especially appropriate for young families. (Term insurance protects the policyholder for a specified time period: one year, five years, twenty years, etc. It has no savings feature, and is therefore cheaper than other policy types.)

10. Bonus tip: Shop around. It can pay to compare rates from different companies.

Transitioning from Military to Civilian Life

Transitioning military can find general information and advice about transitioning from military life back to life among civilians. When transitioning, there are a number of things to prepare for, places veterans can look to for support, and even help finding jobs. The information below is meant to inform transitioning military and spouses about the most important steps to take and resources available when preparing for life as a civilian.

Ok, returning to the civilian world is a little scarier than it sounds. But don’t worry! The best thing you can do for you and your family is to gather as much information as possible prior to actually transitioning out of the military. The “transition” period is usually during terminal leave, however, the actual transition can take a little longer than the short length of terminal leave. Here are some ways to get organized and to ensure the smoothest transition possible. The most important thing is simple: stay positive.

First, face the change.

Make a Plan: This is a given and you’ve probably heard it more than once. Try to start planning about a year out from your known end of service date, and be sure to incorporate terminal leave if that is the route you choose. If you know you want to go back to school, try to apply a year early so that you can start almost as soon as you’re out. Don’t be afraid to start applying to jobs – but before you do that, spend time on your resume and learn how to write a proper cover letter because these are the contemporary forms of “first impressions.”

You are here: You receive any combination of the following: base pay, BAH, BAS, COLA, FLPP, and maybe another specialized pay or two. You receive an annual uniform allowance. You have a stable job. You have health insurance. You have dental insurance. Plus a few more perks.

When transitioning: You will be in a little place called limbo: Mostly, you will be confronted with question, after question. Where will I live? What will I do? Should I go back to school? What about my family? And the list goes on…but don’t get overwhelmed. Take it one step at a time.

Save: If you haven’t been saving for your transition out of the military, start now, and here’s how. Although the military pays for your move, the costs are only covered for travel to your home of record and anything further will be out-of-pocket. Don’t let this discourage you from choosing a different state – you can plan for this. Also, the military will only pay for one car to be shipped (if need be). Keep this potential financial strain in mind as you may want to sell any additional vehicles or find an alternative way of shipping. The car will go to the port closest to your home of record and will need to retrieved from there. If you plan to send someone other than yourself to retrieve the POV (privately owned vehicle) then be sure to specify this person when you drop off the car for shipment. Also, the military will not pay to ship your pets.

When the movers come to pack your home goods: Be there, and pay attention. If you’ve already moved a few times, then you know this. These movers go fast so sometimes they miss an item or two in a bathroom cabinet, but sometimes they miss entire kitchen cabinets. It would be better to have an extra set of eyes or two to ensure that everything is getting packed.

There will be unexpected expenses: You will have to wait for your home goods. If you are shipping from overseas, you will have to wait longer. Try to pack things that you will need while waiting for your home goods to arrive. Certainly, you can’t just fold up your mattress into a suitcase, but consider stuffing a duffle with some pillows and blankets. Kitchen items will be packed away too, so you may have to buy a pan or two to make do until your items arrive, and it’s a good idea to keep important documents with you in case of emergencies.

Next: stay positive. Do not be afraid to reach out to your fellow colleagues who are also transitioning, or have already done so. Take the transitioning process one day at a time and stay active in whatever you have chosen to pursue. Try to keep your same workout routine if you can. Wake up in the morning, have your coffee, and get busy.

When job searching, set goals: Today, I will apply to 3 jobs. There are great resources to help find jobs for transitioning military, including Veteran-specific Re-Employment Resources,  transitioning job assistance programs offered by the military, and military friendly employers who want to help.

If you are applying to schools, set goals: This week I will research 3 schools. Look at the programs they offer, do any of them interest you? Look at their credibility and be sure they are regionally accredited.

If you are looking for homes, take it slow: Be sure you have researched the area, visited the area, and maybe even spoken with a few locals in passing. And definitely find out if you are eligible for a VA Home Loan if you are looking to buy.

If you are starting a business, be a go-getter.

Benefits of Being a Veteran

Being a veteran offers a lot more than you might think (just be sure you move to a military friendly state). The very day after your terminal leave ends, you are no longer a service member, but a veteran. Welcome, and thank you for your service. Although most military contracts, with a few exceptions, include the remaining 2-4 years of IRR (Individual Ready Reserve), all of your regular active service benefits end, and your veterans benefits begin. The IRR will require you to keep your information updated, such as address and phone number just in case the need arises to recall all troops back to service, but otherwise it does not pose too many obligations.

Resources During Transition

Utilize the resources offered to you during transition. Each branch of service, Army, Navy, Marine Corps, Air Force, and Coast Guard, offers a variety of seminars and materials, some of which are mandatory and some that are not, to aid you in your transition. They offer resume and cover letter writing classes, interview preparations, career counseling, educational counseling, job search, etc. Take advantage of the resume and cover letter writing classes because civilians will not know what you mean when you say ETS, PCS, or any other military acronym.

Here are some things to look forward to:

Store discounts: Always ask if a store has a military discount, many businesses extend their discounts to veterans. Although the discount is not usually not more than 10%, it can still take a bit off the bill.

Life Insurance: Veterans Group Life Insurance (VGLI) is available to continue for most veterans and is much less expensive than other civilian options for Life Insurance. Many will receive information in the mail, or you can enroll online. Apply before during the first 120 days after your departure date to avoid extra unnecessary health questions. The process is similar to that of the Servicemembers Group Life Insurance (SGLI).

Post 9/11 GI Bill®: Depending on the percentage of benefits you are eligible to receive, based on your years of service, you can use your Post 9/11 GI Bill, which not only covers school tuition, fees, and books, but it also provides Monthly Housing Allowance (MHA) based on the school’s zip code. Veterans can even receive MHA when enrolled full time for an online degree.

Disability: File claims for injuries received during your time in service, physical or psychological. These claims are assessed after a few visits to the doctor, and you are then notified of your eligibility.

Home Loan: This is a great benefit to have in your back pocket when you find yourself a civilian looking for a place to live. Before applying, be sure you are ready to be a homeowner. Research for schools in the area, job opportunities, accessibility, and even the weather. It’s easy to buy a home, but it’s not nearly as easy to sell one.

The VA does not offer small business loans, but it does recommend going through the Small Business Administration (SBA) if you are starting a business. Don’t forget you can also look to your military friendly banks for this kind of support, such as USAA and Navy Federal.

Veterans License Plates: Now this does not come with any special privileges per se, aside from the occasional parking spot dedicated to veterans in mall parking lots, but it may make you feel connected to your brothers and sisters in arms. You can also have a veterans indicator placed on your driver’s license.

VA Health Care: Enroll in your free health care. You can do this in person at your local VA Medical Center, or online at the U.S. Department of Veterans Affairs website. Thanks to the recent Affordable Care Act, there is no need to enroll in additional health care coverage to meet the nation’s standards, and to declare health coverage when filing your taxes. Unfortunately, VA Health Care does not extend to dependents and is only valid for the veteran. If you do have dependents, look into your state’s health care as you are most likely eligible for medicaid due to your recent status of unemployment.

There’s More to Life Than SGLI and VGLI

Several years ago, I knew a good man with a beautiful family who lost a battle with cancer while three of his four children were still in elementary school. To this day, it hurts to think about it. But that’s the nature of death, isn’t it? It’s tough on the survivors.

So what about you? If you died unexpectedly, how would your survivors get by? Would the financial strain be as bad as the emotional one?

In the military, you’ve got Servicemembers’ Group Life Insurance and, possibly, the VA Death Gratuity to help ease the financial stress on your loved ones. That nice set of benefits could mean up to $500,000 for your family if you die.

If you’re covered by SGLI, each of your children automatically receives $10,000 of coverage. You also can buy up to $100,000 of coverage for your spouse, unless your spouse is in the military (and therefore, already eligible for SGLI).

Unfortunately, when you leave the military you leave these great benefits behind. In most cases, 120 days after you step into the civilian world, your SGLI coverage stops, leaving you with no life insurance unless you’ve made other arrangements.

In general, there are two ways to handle this possible shortfall:

1. Buy a Policy on Your Own

One option for replacing SGLI is to buy a term policy or permanent policy on your own, outside of VA-related programs. Because individual policies require medical underwriting, they generally have lower premiums than insurance obtained by converting your SGLI to a VA-related policy. If you’re able to pass the medical requirements to get one of these policies, this can be an attractive approach to replacing your SGLI.

Another way to replace your SGLI outside of the VA is by getting group term insurance from a civilian employer. Though this typically is a low-cost option, there are at least two major drawbacks to this approach. First, your insurance once again will be tied to your employer. Second, this type of insurance is typically offered in multiples of your annual income, which means you may be limited to getting coverage that’s only one or two times the amount you earn.

For example, if you earn $50,000, your maximum amount of life insurance might be twice that amount — $100,000. So, depending on your salary, you might not be able to get the level of coverage you need.

2. Buy a Policy Through a VA Program

But what if medical issues would disqualify you from getting a personal policy? Fortunately, the VA has two SGLI conversion programs that don’t require medical screening.

Granted, if you’re healthy, insurance under these programs will likely be more expensive than buying a policy of your own, but at least you have options.  The first option is to convert your SGLI policy to a renewable term insurance policy known as Veterans’ Group Life Insurance. The second is to convert your SGLI policy to a permanent life insurance policy, such as whole life, offered by a traditional insurance provider participating in the program. The main advantage of the conversion programs is that neither requires health checks or questions, provided the conversion occurs within 120 days of separation from the military.

A Prudent Policy

As I already mentioned, SGLI is a great perk, but it can also make sense to buy a separate life insurance policy while you’re still on active duty. Here are a couple of reasons:

  • Sufficient protection. The basic SGLI death benefit of $400,000 might seem like a lot of money, but once you consider all the potential needs of the surviving family, it may not be enough. An extra policy could help cover your debts, fund college for your children, or allow your family to maintain their desired standard of living.
  • Coverage in transition. If you buy a policy when you’re healthy, you still have it if you get sick or hurt, or if you leave the military.

In the end, we all hope to look back one day on the money we spent on life insurance and happily realize we hadn’t needed the full benefit. But one of the sad realities of life is that at some unpredictable point, it ends. So take steps to ensure that if it happens to you sooner rather than later, your family won’t be caught short.

3 Major Life Changes to Consider Before a Deployment

While many military families try to prepare the best they can for a deployment, it‘s nearly impossible to know everything that might happen. Between “Murphy’s Law” and any major life changes that might come up, it’s easy to worry about how to be proactive in preparing for a deployment.

This unique article will give you plenty of tips on how to prepare for those crazy, last-minute, major life changes that military life can bring. Use the checklist below to make sure you are ready and prepared during that next deployment.

1. Financial Hardships

Sure, your spouse may be getting paid extra during a deployment, but that doesn’t mean that financial hardships won’t come up. During my husband’s first deployment, I got locked out of our joint bank account. Never in a million years did I think that would happen and I was definitely not prepared!

  • Who will be in charge of the finances?
    • Is there a budget in place?
    • How will you make it work?
    • What bills (mortgage/rent, car tags, insurance, etc.) will need to be paid and how will they be paid?
    • Are you saving for something special? (post-deployment vacation, Christmas presents for the kids, etc.)
  • What should you do during an emergency financial situation?
    • Should you take out a loan or borrow money from a friend or family member?
    • Are there any insurance policies you should put in place now in case of emergency?

2. Travel & Moving

  • Where will your family reside during deployment?
    • Will you be traveling?
    • Will you be staying with family for an extended period of time?
    • Will you be staying home the entire deployment?
    • Will someone be coming to stay with you and your family? For how long?
    • What will you do with pets while traveling?
  • Will you be PCSing or putting household items in storage?
    • Will you be moving or PCSing before, during, or after deployment?
    • Do you have valuable item insurance?
    • Will you be putting your household goods in storage?
    • How long will your items be in storage?
    • What time of the year will your items be in storage?
    • Will you be selling your house or renting it out?

3. Emergencies

Emergencies do happen, but how can you prepare for them? The key is thinking about what could happen depending on what state you live in, your living situation, and more. Here are just a few emergency scenarios you should discuss with your spouse before they leave on deployment:

  • What should you do if there is an emergency situation?
    • Break-in or unexpected home damage
    • Injury or death of a family member
    • Car accident
  • Who should be contacted if there is an emergency?
    • Have a list of family members and friends you can contact should there be an emergency. Is there someone you could stay with both in your city and out-of-state?
    • Have a list of phone numbers for doctors, your insurance company, and local emergency services (e.g., poison control)
  • What if there is a natural disaster (flood, fire, hurricane, tornado, earthquake)?
    • Do you know what to do should a natural disaster happen?
    • Do you have the proper insurance coverage should a natural disaster happen?
  • What if you or your teen is in a car accident or the car breaks down?
    • Do you know your auto insurance policy?
    • Do you know who you would call?
    • Do you have emergency road services through your insurance?
    • Do you have an emergency plan or medical information in the car?
    • Where should the car be towed to?
    • Does your auto insurance cover car rentals?

The list above is just a few of the major life changes that can happen during a deployment. Overwhelmed by this list? Don’t be! Make an emergency plan now before your spouse leaves. Create an emergency binder or folder and have your emergency contacts, doctor phone numbers, and insurance contracts ready to go.

Do Service Members Need Life Insurance?

Life insurance is one of the most important components of your personal financial plan. Unfortunately, life insurance is poorly understood, and breadwinners’ mistakes invariably cause great financial hardship for their survivors. The primary purpose of life insurance is to protect your survivors from the adverse financial consequences of your premature death.

If service members have no survivors, then it’s unnecessary to buy life insurance beyond the amount needed to pay for any outstanding debts or settle the estate.

If service members are married or have young children, then it’s prudent to have life insurance to insulate the family from financial disaster. service members who want to marry or have children soon should explore life insurance options.

How Much Life Insurance Do Service Members Need?

The general idea in determining life insurance needs is the estimate the family’s actual financial situation in the event of the policyholder’s death. Life insurance is not a measure of devotion to loved ones or a monument to self-importance. It is insurance in case of premature death, and it should be used to protect dependents against undue financial hardship.

If a service member is not alive to provide for his or her family, insurance coverage should be sufficient to enable them to live comfortably. service members should determine the expenses survivors would incur in the years following their death and the income they will receive. By matching income with expenses, policyholders can easily see any short-falls (there may be none) that are best covered by life insurance.

Plan for a basic monthly income for the family, plus additional needs such as education for the children, special medical care for predictable problems, and a reserve for emergencies. As life changes, some of the needs disappear. For example, if the policyholder’s children are grown and through college, there is no need to leave money for the children’s education. Thus service members need to reevaluate insurance needs periodically to make sure the survivors’ situation hasn’t changed. In any case, there is never a requirement to make the policyholder’s family wealthy upon his or her death; buy only the coverage for identifiable needs.

The first step is to estimate the monthly expenses the policyholder believes his survivors will face. If you don’t know where to start in estimating these expenses, a good rule of thumb is two-thirds of your present monthly income for those years when children will be at home, and one-half after they have left.

What Type of Policy Should You Buy?

Currently, an active duty service member may elect to take up to $250,000 of coverage for $.65 per month per $10,000 of coverage, regardless of age. This is very inexpensive insurance for older officers and noncommissioned officers. In effect, the large numbers of young service members make possible low premiums for the older service members.

For this reason, and because it is convertible after service members leave the service, SGLI should probably be the basic building block of a military family’s insurance program. However, military credit unions may offer a better policy at less cost than SGLI.

There are three main types of life insurance:

  • Variable – Has a flexible structure designed to allow greater return on the savings portion of the policy.
  • Permanent – Premiums are paid until your death but also build savings. This type of life insurance offers guaranteed premiums and guaranteed cash values. Some types offer cash value growth driven by the equity markets. While premiums are higher than you initially would pay for the comparable amount of term insurance, over time the permanent life insurance cost may be lower than term insurance.
  • Term – Lasts for a specific period; has no savings component. Term life offers the lowest initial premium expense. Over time, however, term insurance premiums can increase significantly. In the long run the cost may even surpass the cost of permanent life insurance.

Within these major categories, there are many variations that will allow you to meet your life insurance needs.

The Right Life Insurance for the Military

Confused about life insurance — whether you need it, what kind, how much and the like? So are a lot of people in the military. While the military provides you with Servicemembers’ Group Life Insurance (SGLI) coverage, that may not be enough for some people. To make those decisions easier, we’ve boiled it down to the basics.

Confused about life insurance — whether you need it, what kind, how much and the like? So are a lot of people in the military. While the military provides you with Servicemembers’ Group Life Insurance (SGLI) coverage, that may not be enough for some people. To make those decisions easier, we’ve boiled it down to the basics.

1. Is there a “war clause?”

A little known fact about life insurance policies ? some don’t pay if you die as a result of war. For members of the military, this is a significant issue. When looking for a life insurance policy, make sure that if you die as a result of combat duty, your family will receive the benefits of that policy. None of the life insurance policies at USAA contain a war clause.

2. Do you need it?

That’s the easy part. If you’re not responsible for anyone or anything, you probably don’t need life insurance. If you’re single, with no kids, and a lot of people aren’t counting on your income, you probably don’t need life insurance. Remember, the military already provides you with a maximum of $400,000 of life insurance. But if you’re married, have children, or take care of aging parents, SGLI coverage is most likely not enough. It’s probably a good idea to get additional life insurance, as well.

3. Can I get it?

Members of the military have difficult and often dangerous jobs. Some military professions, such as like fighter pilots and paratroopers, are unable to receive life insurance simply because some companies feel their line of work is too risky. A good bet is to find an insurance company that understands the military, and will provide you coverage regardless of your military career.

4. Life (insurance) after the military

Planning to separate from the military? It’s a good idea to start shopping around at least two months ahead for life insurance. Your SGLI policy won’t be valid once you leave the military. It can take up to six weeks to get a life insurance policy, so don’t cancel your SGLI until your new policy has been issued and the first premium paid.

Coverage for you

One option is to convert your SGLI to a five-year renewable term policy with Veteran’s Group Life Insurance (VGLI), which will provide up to $400,000 in coverage. If you’re in poor health, this can be a good value. But if you’re healthy, you might find a more affordable option with a commercial life insurance company.

Coverage for your spouse

Your spouse is an important part of your family’s financial security even if he or she doesn’t earn an income. Think of it this way: What would it cost to replace the childcare, meal preparation, and other household tasks your spouse does? If you had the $100,000 of coverage for your spouse under SGLI, you will not be able to convert it to VGLI once you separate from the military. The good news is: purchasing a relatively inexpensive life insurance policy can offset the expenses associated with losing a spouse.

5. How much insurance do you need?

There’s no magic formula but you can start by figuring out what you want life insurance to do for you. Do you simply want a policy to cover your funeral, debts, and unpaid medical bills? Or are you worried about providing enough college money for your children or retirement savings for your spouse if you die suddenly? Some experts say you should buy a policy that’s seven to 10 times your income. But that’s not the answer for everyone.

“Getting the right amount and type of insurance depends on your specific situation,” says Rob Schaffer, executive director of Product Management for USAA Life Insurance Co. “You need to ask yourself some key questions to decide what fits your budget and your circumstances. This is where talking to an insurance company or financial adviser can help.”

6. What kind do you need? How long do you need it?

Consider the kind of insurance you want: term or permanent life insurance. Buying term insurance is like renting a house, but the lease on the insurance policy can be used only for a specific term — 10 years, 20 years, or whatever you choose. Permanent insurance, on the other hand, generally has a higher premium than term, but lasts for a lifetime. The policy also builds cash value that you can borrow against or withdraw if you have an unexpected need for it.

Once you decide between term and permanent life insurance, you have one more step — sign up. Both types of life insurance have several options. Make sure you research the information, consult with a financial adviser, and choose carefully. But whatever you do, don’t delay. The cost goes up with age.

7. Shop around to find the right fit.

The first, and most important step, is to find the right policy for your budget and family’s needs. We make it easy to compare policies with our life insurance tool that matches you to multiple partners, so you can shop around … in one stop.