You will face many challenges and opportunities as your retirement approaches. And, planning for your family's financial security is one of those challenges. This "Guide" is merely intended to give you some things to think about as you begin your transition to civilian life. It's based on my personal experiences and feedback from countless counseling sessions conducted here at Navy Mutual with servicemembers approaching retirement or those who have recently retired.
Most retirees will find that they still require private, individual life insurance. Many experts recommend a mix of both permanent (whole life) and term coverage. A life insurance tutorial is available on the Association's website to help you understand the differences between and the advantages of both. Additionally, our Counselors are ready to discuss your options with you. Also available on our website is a Life Insurance Needs Analysis Calculator to help you determine your needs. As you transition, there are often changes in your life that can increase your need for additional coverage. A new home; increased income and attendant increase in lifestyle; and approaching college costs can all increase your family protection needs. Additionally, do not neglect the need for spouse coverage. During that same 120-day window following retirement, you have the option to convert your spouse's SGLI coverage over to whole life. This should be seriously considered if your spouse has health issues such that render him/her medically insurable or unable to find coverage at reasonable rates due to these health issues. Call the Office of SGLI (800-419-1473) to find out more about this option.
Life Insurance Planning is not easy. Most people spend more time researching and buying a new car than they spend putting a good plan in place for the financial security of their survivors. Below are some common life insurance mistakes to look out for. Call one of our Counselors or another life insurance professional to learn more about avoiding these mistakes.
- Naming your estate as beneficiary
- Failing to name contingent beneficiaries and failing to keep beneficiaries up to date
- Failing to review you coverage periodically to ensure that it adequately addresses the changes in your life.
- Failing to buy the right type of life insurance (Term and Permanent insurance both have a place in your plan).
- Not having enough insurance (Use Navy Mutual's Needs-Based Calculator).
- Making policies payable outright t minor children/grandchildren.
- Forgetting the termination date of your Term plan.
- Buying insurance as a commodity. Seek the help of a knowledgeable life insurance professional. Our Counselors can help you determine what is best for your family.
Property and Casualty Coverage. This is the one area of insurance planning that you may have best under control. However, if you move to a new state to begin your retirement, you will need to re-evaluate your Homeowner and Automobile policies. Some retirees also look at insuring their household goods in order to have adequate protection as they are trucked off to the new homestead. Look to companies that serve service members and veterans as their primary mission, such as USAA and Armed Forces Insurance (AFI).
Disability Insurance. This is one area that most active duty service members don't think about since they enjoy significant benefits when they become disabled in the line of duty. However, as a civilian, you should pay particular attention to this insurance. If you are starting a second career, most employers will provide you with both a short-term and long-term disability policy on a group basis. You need to review these plans carefully to ensure the protection is adequate. Don't forget, your excellent military pension continues for life even if you become disabled. This is a significant benefit that you have over your civilian counterparts. You should also evaluate your occupation and your avocation to see what affects they may have on this decision. Is your occupation one such that there is an increased probability of disability? Is your occupation one in which a disability would end your employment? For example, a surgeon who suffers a disabling injury to his/her hands or an airline pilot whose vision becomes impaired? Purchasing an individual disability policy may be a consideration.
For more on Navy Mutual Life Insurance, Visit Navy Mutual at http://www.navymutual.org.
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