How to Buy Life Insurance When You’re in the Military

Posted on August 29, 2020 Updated on August 29, 2020

Shopping for life insurance can be time consuming and difficult, but I’m going to make it easy for you. Read on to find out how much life insurance you need and figure out the best way to get it.

Do You Need Life Insurance?

The purpose of life insurance is simple. If you die, it protects those who are reliant on your income.

If you have anyone who is financially dependent on you, you need life insurance. If you don’t, you don’t need it. It’s that simple:

• Married with kids – You probably need it unless you have a sizable net worth.
• No kids but your spouse doesn’t work – You probably need it.
• No kids and your spouse works – If their income is enough for them to live on, you don’t need it. If it is not enough to live on, you need it.
• Single with no dependents – You don’t need it.
• Kids do not need life insurance.

This handles most scenarios. If you have some other situation, I’ll go back to the beginning…

If you die, would anyone suffer financially? If the answer is yes, you need life insurance. If the answer is no, you don’t.

What Type of Life Insurance Do You Need?

There are two types – term and permanent/cash-value. Only buy term. Never buy permanent/cash-value. No matter who tries to sell it to you or how convincing they are.

ONLY…BUY…TERM.

If you want to know why, read this article.

How Much Life Insurance Do You Need?

There are a plethora of online calculators set up to answer this question. The best one I’ve found is here. Use the calculator…that’s how much life insurance you need.

If you are averse to complicated calculators, a common rule is to purchase 7-10 times your annual income. Again, that is a rule of thumb that is not taking into account your individual life situation. If you are allergic to online calculators, though, using this rule of thumb will ensure that your family is not destitute if you die.

Where Should You Get Your Life Insurance?

You can shop around on different websites, like Term4Sale.com. But I wouldn’t do that if I was you.

Most companies that sell life insurance do not cater to the military. Their policies will have all sorts of restrictions that you and I just can’t be bothered with, like war clauses that would not pay out in the event of an act of war. (Note that Andy Borgia from DI4MDs.com contacted me after publication and says this is no longer the case. War is covered but there is a 2 year exclusion for suicide.) For this reason, I’d only get my insurance in one of four places:

• AAFMAA
• Navy Mutual Aid Association – You don’t have to be in the Navy to get insurance from them.
• Servicemembers Group Life Insurance (SGLI) – This is the life insurance you can sign up for via your military paycheck.
• USAA

There may be other military-focused insurers, and if you want to share them in the comments feel free, but these are my go-to sources.

What Combination of the Above Options Should I Get?

Getting SGLI isn’t necessarily the cheapest option. The above companies are well-versed in how you can most efficiently combine their products with SGLI to maximize the amount of life insurance you can get for your money.

Contact the three companies above. Spend some time listening to their opinions on how to best address your situation. Only buy term insurance. Then buy what seems best for you.

The Bottom Line

1. Decide if you need life insurance.
2. Decide how much you need.
3. Buy term insurance only.
4. Buy only from these sources – AAFMAA, Navy Mutual Aid Association, SGLI, or USAA.

Brief Disability Insurance Update and Finance Friday Articles

Posted on August 28, 2020 Updated on August 27, 2020

Here’s a brief message update from Lawrence Keller, one of the experts of disability insurance for military physicians at Physician Financial Services:

Joel-

Hope all is well.

I wanted to let you know that MassMutual recently announced a 25% discount for Active Duty Military Physicians.

This discount is permanent and also applies to all increases made to one’s coverage in the future.

I’ve also been using a two policy approach for Military Physicians that will ultimately allow them to reach up to $20,000 month, regardless of their health, as their incomes rise. I have received very favorable feedback on this strategy, which even works for Military Residents/Fellows (who are typically limited to only $2,000 month to start).

If you have any questions or require additional information, feel free to call.

Lawrence B. Keller, CFP®, CLU®, ChFC®, RHU®, LUTCF
Phone: (516) 677-6211
Fax: (516) 269-7700
Toll- Free: (800) 481-6447
250 Crossways Park Drive, Woodbury, NY 11797

https://www.physicianfinancialservices.com/

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