There are two unwavering truths about life insurance: Nobody likes talking about it, and nobody likes paying for it.
Why? Because purchasing life insurance is an admission of your own mortality, or that of those close to you. And paying for insurance can be unfulfilling because there is no benefit unless you or someone you care about dies. But the fact is, talking about the possibility of death doesn't make it any more likely -- and not talking about it is almost guaranteed to leave you unprepared.
It's important for military families to review their life insurance coverage on a regular basis. Each active-duty servicemember is eligible for up to $400,000 in Servicemembers' Group Life Insurance (SGLI) and may add optional spousal coverage of up to $100,000 and dependent coverage of up to $10,000. You may wish to consider supplemental commercial life insurance as well.
What should you do to make sure you have all the coverage you need? Here are some of the top life insurance questions you should ask your financial adviser at your next regular meeting -- or any time there is a change in your family or financial status.
1. Have I told you about all the changes in my life since the last time we met together? Significant changes in your financial status might require changes to your coverage. These changes may include a recent relocation, buying or selling a home, changing jobs and children graduating high school and going to college.
2. Do I have the correct amount of insurance for my current stage in life? And if so, you'll want to make sure you have the correct types of coverage. Your financial adviser can explain how much and what types of insurance -- permanent or temporary -- make sense for you.
3. Do I have the correct beneficiaries listed on all policies?
4. Are all policy premiums up to date and/or does my allotment (or bank draft) need to be changed?
5. Do I have a child rider on any policy that might need to be changed? Your financial adviser can help you make sure that all of your children are included on the rider. Also, children who have "aged out" may need to take out their own policies.
6. Do I have any loans on my policies? People who own permanent insurance can borrow against the cast value of the policy. Once the funds are borrowed, the policyholder may or may not elect to repay the loan. But remember: Even though a loan does not have to be repaid, the loan amount plus the interest will be subtracted from the death benefit (just when it is needed the most).
And the last but most question you should ask your financial adviser during your next meeting is:
7. Do I need more coverage? And if so, how can you help me get it? Your financial adviser can help you be sure that you have the right amount coverage to protect your assets and provide for the financial security of your loved ones.
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Joe Morrin is senior vice president and director of financial planning at First Command Financial Services Inc. Prior to joining First Command in 1986, he spent several years in the U.S Army, serving as a captain at the time of his departure.
