Military Familiy is Happy They Have Permenent Life Insurance

Military families show strong preference for permanent life insurance

| November 1, 2016

Demand for permanent life insurance continues to grow in America’s career military, where 2/3 of families now report owning this type of coverage and many others say they are likely to join them, according to the latest findings of the First Command Financial Behaviors Index®.

First Command‘s annual life insurance survey reveals that 67% of middle-class military families* own some form of permanent life coverage. That’s up 25 points over the past five years. And among military families who don’t own a permanent life policy, 68% say they are likely to consider purchasing one for themselves or someone in their household. This level of interest represents a continuing upward trend, climbing from just 28% in 2011.

Popular Types of Permanent Life Insurance

The most popular forms of permanent life insurance coverage among military families include:

  • Whole life, owned by 42% of survey respondents.
  • Universal life, owned by 24% of survey respondents.
  • Variable life, owned by 18% of survey respondents.

Meanwhile in the general population, demand remains steady. The Index reveals that 40% of middle-class civilian families own some form of permanent life coverage, statistically unchanged from five years ago. The most popular form of permanent life insurance coverage in the general population is whole life, which is owned by 27% of families.

Demand for Temporary Life Insurance Up, Too

Service member demand for temporary life insurance coverage is also up this year. About half of military families (46%) report owning term life products, up 13 points from last year. But the long-term trend remains constrained. Demand is about the same as five years ago. Civilian ownership of term life products has fallen to 39%, down nine points from last year. Demand is also about the same as five years ago.

Supplementing the SGLI

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.

“Supplementing government-provided coverage with permanent life insurance allows America’s career military families to more fully and effectively tackle their present and future needs,” said Scott Spiker, CEO of First Command Financial Services, Inc. “This strategy of combining government benefits with commercial products allows families to address the uncertainties of military life today and effectively pursue financial security tomorrow.”

*Commissioned officers and senior NCOs in pay grades E-5 and above with household incomes of at least $50,000

About First Command

First Command Financial Services and its subsidiaries, including First Command Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.


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