Demand for permanent life insurance growing in career military families

| September 15, 2014

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.

Will phased retirement be offered in 2014?

| September 10, 2014

Many seasoned federal employees are excited about phased retirement and are hoping it will go into effect this year. Until the regulations are finalized we won’t know if there will be changes, but this article sums up the basic premise of the program.

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Are you ready to leave the military?

| September 8, 2014

Change – it’s the only constant in life. It can be exciting and it can also be daunting. With all branches of the service offering some type of early retirement and/or voluntary separation, if you receive an offer, weigh your options to make sure you’re prepared for the coming change in your life.

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Servicemembers saving more in face of sequestration concerns

| September 4, 2014

Worries over sequestration and defense downsizing are continuing to drive a savings surge in America’s career military, with those who work with a financial advisor putting away the most dollars for both near- and long-term goals.

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The benefits of mobile banking

| September 2, 2014

More than half of all smartphone users in the United States now rely on their devices for online banking. The convenience of mobile banking is largely responsible for its growing popularity and it’s this anytime, anywhere convenience that makes it an especially useful option for military families navigating the banking challenges that often come with frequent PCS moves or deployments.

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Personal Finance

A nitty-gritty guide to making a budget

| August 27, 2014

Mortgage payment, $765. Utilities bill, $90. Unexpected car repair, $110. Extra money at the end of the month, $0.

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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Building Your Retirement Game Plan: Tax diversification (Part 5 of 5)

| August 25, 2014

The subject matter of the final installment of this 5-part series is a bit more “taxing” than the previous four parts. That’s because it addresses the importance of taking into account the potential impact of taxes on your retirement income through a process known as “tax diversification.” Just as investment diversification is a way of hedging one’s bet about which markets or individual investments will perform best – or worst – in the future, tax diversification is a way of hedging one’s bet on possible changes in tax rates and laws.

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Building your retirement game plan: Healthcare and long-term care (Part 4 of 5)

| August 20, 2014

The days of retiring and living out your golden years, paid for by a small pension and supplemental Social Security payments, are long gone. Today, Americans who reach the traditional retirement age of 65 can expect to live another 18.6[1] years, which means they will spend a great deal more than they might expect – especially on the skyrocketing costs of healthcare and long-term care.

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Building your retirement game plan: Where to retire? (Part 3 of 5)

| August 18, 2014

One of the most important decisions you’ll make in regards to planning your retirement is where to settle down. It’s a decision that will not only affect your pocket book, but it can have an enormous impact on your emotional, physical and social wellbeing as well.

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Building your retirement game plan: When should I start taking Social Security? (Part 2 of 5)

| August 13, 2014

As you approach an eligible retirement age, it is increasingly important to fine-tune your financial plan to your specific retirement situation – especially in regards to your Social Security benefits.

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