Author: Joel Schofer, MD, MBA, CPE
Admiral Announces Plan to Restart Navy Fitness Tests
Here’s a link to this article:
Guest Post – Servicemember’s Group Life Insurance (SGLI) and an Important Note Regarding Individual Disability Insurance Eligibility
Understanding the value of maintaining life insurance to protect loved ones, the military makes group term life insurance available under the Servicemember’s Group Life Insurance (SGLI) program to the following service members:
- Active duty
- Ready Reservists or National Guard who are assigned to a unit and scheduled to perform at least 12 periods of inactive training per year
- Commissioned Members of the National Oceanic and Atmospheric Administration and the Public Health Service
- Cadets or Midshipman of the U.S. military academies
- Members of the Reserve Officer Training Corps engaged in authorized training and practice cruises
If you are on this list, at the end of this article provides a link on how to enroll. This coverage is not free as you must pay a monthly premium. This article will provide you the information you need to make an informed decision about life insurance.
SGLI is group term life insurance which means it will pay your beneficiary, a person or entity you choose, who will suffer a financial loss in the event of your death. If you can’t think of anyone, for example if you are single with no dependents, you can stop reading because you probably don’t need life insurance. However, if you are married with children, mortgage, etc., this protection is extremely important. Financial planning calculators indicate that an insured individual should maintain 7-10 times their annual income in life insurance until their youngest child is 25 years old.
SGLI provides up to $400,000 of coverage regardless of health and age for $24 per month. A similar private policy from the open market issued on a 30-year-old non-smoker will cost between $22-$32 per month, so the SGLI policy is competitively priced. This is because most active duty military are young, healthy and retire fairly young so the liability for the insurance company, Prudential, is mitigated.
Upon separation from service, SGLI can be converted to Veterans Group Life Insurance (VGLI) within one year and 120 days from separation. If done within 240 days of separation, no health qualification is required. Thereafter you must meet good health standards. Unlike SGLI, VGLI is not competitively priced and rates are determined by age and increase in five-year increments. A $400,000 VGLI policy is $40 per month between ages 30-34, $68 per month at age 40, $144 per month at age 50 and increases every five years to $1840 per month at age 75. Similar individual policies are approximately 60% of the cost of VGLI but you must qualify medically.
Taking into consideration the incomes of most military physicians and dentists, not only is SGLI inadequate in terms of need but it can lead to providing a false sense of security and result in the postponement of establishing an adequate personal term insurance program early in one’s military career before the development of health issues, nicotine use, avocations, or deployment. The only exclusions on individual life insurance policies are suicide during the first two years so war is covered but you cannot initiate coverage if you are stationed outside the country or have received orders to do so. Once again, the sooner you apply for coverage the wiser.
It is prudent to examine your individual life insurance options sooner rather than later. Please contact our office with any questions and don’t forget to ask about the disability insurance discount for new policies.
Important Note Regarding Eligibility for Individual Disability Insurance
Receiving orders for deployment outside the USA will prevent you from being able to apply for a non-cancelable and guaranteed renewable to age 65 policy until you return to the USA. This would mean paying a higher rate for the duration of your career. Since OCONUS PCS orders are given when you are at the end of training, it is prudent to explore establishing coverage prior to that time period. Avoid this potential pitfall and others by working with us and our extensive experience with military physicians and dentists today.
Andy G. Borgia CLU
D.K. Unger
888-934-4637
858-523-7518
SGLI Online Enrollment System (SOES) – Life Insurance https://www.benefits.va.gov/INSURANCE/SOES.asp
SOES is the Servicemembers’ Group Life Insurance (SGLI) On-Line Enrollment System. It replaces the paper-based SGLI/Family SGLI (FSGLI) enrollment, maintains elections and beneficiary information, and provides 24/7 self-service access to SGLI information. SGLI provides insurance coverage to eligible members of the active and reserve components.
Navy CBD Product Ban Expanded to Include Lotions, Topical Applications
Here’s a link to this Navy article:
CBD Product Ban Expanded to Include Lotions, Topical Applications
Two USU Chair Positions – IM and Psych – CAPT(s)/CAPT
Anyone interested in applying for these positions needs to send their CV, military bio, and letter of intent to me at joel.m.schofer.mil < at > mail.mil by COB 15 SEP 2020. Here are the calls for nominations:
Support the Blog by Donating to My Brother’s Run Across the US to Fight Cancer – Run Forrest, Run!
My brother Jarad is famous for having run every street and alley in Washington DC:
A DC Man Ran Every Single Street (and Alley) in DC
He scored a sabbatical from his teaching job and will be running across the entire US, Forrest Gump style, to fight cancer. If you’ve ever appreciated the blog, you can show it by donating to his cause here:
Info on Social Security Payroll Tax Deferral for Active Duty
BLUF – If your monthly basic pay is less than $8,666.66 per month you are going to get extra money deposited in your accounts for the rest of the year, but they will take it back in early 2021.
Here’s the military relevant text from the DFAS page discussing this COVID related Presidential initiative:
In order to provide relief during the COVID-19 pandemic, a Presidential Memorandum was issued on August 8, 2020 and guidance followed by Internal Revenue Service on August 28, 2020, to temporarily defer Social Security (Old Age, Survivors, and Disability Insurance (OASDI) tax withholdings. This change is effective through the end of the 2020 calendar year.
Military Members – Effective for the September mid-month pay, DFAS will temporarily defer the withholding of your 6.2% Social Security tax if your monthly rate of basic pay is less than $8,666.66. If your monthly rate of basic pay is at or above this threshold, your social security tax withholding will not be affected by the temporary deferral. Military members can use their August or prior LES as a good reference for their typical Social Security tax amount. The Social Security tax is labeled as “FICA-SOC SECURITY” on the LES and is calculated as 6.2% of basic pay.
Military members are not eligible to opt-out of the deferral if their Social Security wages fall within the stated limits. The deferral will happen automatically.
Per IRS guidance, collection of the deferred taxes will be taken from your wages between January 1 and April 30, 2021 for both military members and civilian employees. Additional information on the collection process will be provided in the future.
If a military member or civilian employee separates or retires in 2020 before the Social Security tax can be collected in 2021, they are still responsible for the Social Security tax repayment. Additional information on the collection process will be provided in the future.
For questions on the temporary deferral of the 6.2% OASDI withholding:
- Visit the IRS page: https://www.irs.gov/newsroom/guidance-issued-to-implement-presidential-memorandum-deferring-certain-employee-social-security-tax-withholding.
Still have questions? See the FAQs for more information.
Look for Insurance Gaps
Here is an action from Jonathan Clements‘ blog Humble Dollar. Jonathan Clements was a longtime personal finance columnist for The Wall Street Journal, and he offers great advice at the best price you can get…free:
LOOK FOR INSURANCE GAPS. Many folks agonize over whether their policies are too large or small. A bigger danger: Not having coverage at all, because your life has changed but your insurance hasn’t kept up. Just had kids? It’s time for life insurance. Grown wealthy? Consider umbrella liability insurance. Started working for yourself? You may need disability coverage.
I’ve written a good bit about insurance. Here’s an article about getting properly insured.
How is insurance different for those in the military? It is a little more complicated. Many life insurance policies used to have war/military clauses. Some cater to the military, though, and aren’t as restrictive. Here’s how to buy life insurance in the military. Also, don’t forget about the other death benefits of being in the military.
It is also hard to get supplemental disability insurance (DI) if you need it. Most of us in the military are okay with the coverage we get from the military’s disability system, but if you are a top earner like a pilot, nuclear engineer, doctor, dentist, or someone else with a high salary and bonuses, you might want to check out this article on the White Coat Investor. While written for doctors, the company I wrote the article with also will sell insurance to other military high earners.
What insurance do I have right now? What insurance did I used to have? Here’s the current status:
- Disability insurance – I used to have supplemental DI, but I cancelled it because I no longer need it due to my adequate net worth and the military disability system.
- Medical insurance – TRICARE Prime, baby! Which is the most under-appreciated benefit of being in the military, by the way.
- Homeowner’s insurance – Got that through USAA.
- Renter’s insurance – I don’t rent, but when I did I had it through USAA.
- Auto insurance – I have our three vehicles insured through USAA.
- Umbrella liability insurance – I have enough through USAA to cover my net worth, which is the usual recommendation.
- Life insurance – I only have SGLI right now because I no longer need more than that. I’ve had as much as $3,000,000 total during my life, most of it through Navy Mutual Aid Association.
- Flood insurance – I’ve got flood insurance through USAA and FloodSmart.gov.
Officer Photographs Once Again Removed from Promotion Boards
You can read the NAVADMIN here, but the BLUF is:
- They will no longer display photos in any promotion boards or boards that have to do with “assignment, training, education and command.” In other words, not at the command/milestone screening board.
- You still have to have a photograph in your officer record. It just won’t be displayed.
This is exactly the same as when they took them away in 2016, although in this case it was done as part of a SECDEF initiative to remove bias in promotion boards.
SG’s Message – Full Speed Ahead-After a Short Break…
Esteemed Shipmates,
Labor Day typically marks the unofficial end of summer and a return to school for many; and this year, we are reminded that 2020 is anything but typical. What IS typical is your outstanding support of our war fighters and their families. So, before we secure for the holiday weekend I want to thank you for YOUR labors and the contributions you make to defend our freedoms. I’d especially like to recognize our shipmates who are “standing the watch” this weekend on behalf of Navy Medicine. Thank you for your selfless dedication and team spirit.
Since the early part of February, Navy Medicine has been operating at flank speed. We have and will continue to answer the call by responding to those we serve; our patients, our families, our warfighters, and in federal emergencies to our fellow citizens. No one can stay at flank speed indefinitely, so if possible this weekend, please throttle back, spend some quality time with friends and family (in a socially distanced way of course!) and recharge your batteries. Refreshed, we will be able to redouble our efforts against this implacable adversary.
In recent messages, I have highlighted the tremendous efforts we have made to rapidly deploy our medical capabilities, both at home and abroad, in support of the COVID-19 response. I have watched in admiration as the Navy Medicine team has demonstrated its power in incredibly agile and novel ways. The nation now knows what we have always known, and that is that we are always ready to answer the call and to provide a fully capable medical force no matter how challenging or unique the contingency.
Throughout the pandemic we have learned much about our strengths and have also identified areas where we can improve. We continue to gather these lessons learned and are committed to ensure they are lessons applied and don’t just get filed away. The COVID response has demonstrated the importance and value of rapid cycle feedback from “the deck plate” so I encourage you to share your insights, of both your successes and your challenges, with your leadership so we can use them to build a stronger and even more effective Navy Medicine.
Finally I wanted to reaffirm how appreciative I am of what you all are doing. Please know that it is not just me that is incredibly appreciative; it is the Secretary of the Navy, the CNO, and the Commandant of the Marine Corps. Vice Admiral Sawyer; who runs Operations for the Navy, has repeatedly stated how much he appreciates the support that we are providing by rising to the occasion, answering the mail, providing guidance for health protection; and when necessary, getting people out the door quickly…fully demonstrating the power of Navy Medicine!
It’s a privilege to be your Surgeon General and be in a position to support each of you, advocate for you, and to bask in your impressive successes. Wishing you all the best for a safe and restful holiday weekend. Come back from this well-deserved time off rested, recharged and ready to proceed full speed ahead!
With my continued respect and admiration, SG
Bruce L. Gillingham, MD, CPE, AOA
RADM, MC, USN
Surgeon General, U.S. Navy
Chief, Bureau of Medicine and Surgery
Joel Schofer's Career Planning Blog 