Demand for permanent life insurance is growing in America’s career military, where almost seven in ten families now own this type of coverage, according to the latest findings of the First Command Financial Behaviors Index®.
First Command’s annual life insurance survey reveals that 68 percent of middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) own some form of permanent life coverage. That’s up 20 points from last year. In 2011, just 42 percent of families reported owning some form of permanent life insurance.
And the numbers are expected to keep rising. The Index reveals that 53 percent of military families who don’t own a permanent life policy say they are likely to consider purchasing it for themselves or someone in their household. This level of interest represents a continuing upward trend, climbing 7 points from last year and 25 points over the past three years.
The most popular forms of permanent life insurance coverage among the military include:
- Whole life, which is owned by 42 percent of survey respondents. That’s up 10 points from last year. The Index reveals that 34 percent of those who own whole life policies purchased their coverage in the past five years.
- Universal life (24 percent, up 9 points).
- Variable life (12 percent, up 6 points).
In contrast, the general population is experiencing a more muted demand trend for permanent life insurance. The Index reveals that 44 percent of middle-class civilian families own some form of permanent life coverage. That’s up just 7 points from 2011. The most popular form of permanent life insurance coverage in the general population is whole life, which is owned by 32 percent of families. That’s up just 6 points from 2011.
Notably, demand for temporary life insurance coverage has remained steady in recent years for both populations. Ownership of term life products is 52 percent in the military and 42 percent among civilians. In both cases, the rate of ownership is virtually unchanged from last year and up just 3 points from 2011.
Military families are turning to permanent insurance products as supplemental coverage to their government benefits. Active-duty personnel are eligible for up to $400,000 in Servicemembers’ Group Life Insurance, commonly known as SGLI. They may add optional spousal coverage of up to $100,000 and dependent coverage of up to $10,000. After leaving the service military personnel may convert SGLI to Veterans’ Group Life Insurance (VGLI); however, premiums may be higher and are based on the age of the insured. Supplemental commercial policies allow military families to increase their overall coverage now and provide longer-term protection for their post-military lives.
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If you constantly wonder what happened to your paycheck, coming up with a budget may eliminate some of the guesswork and change that $0 figure into something a bit larger.
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