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Should I Buy Life Insurance on my Military Spouse?


The primary reason we buy life insurance is to fill a cash need. Should you buy life insurance on your military spouse? Well, let’s wargame what happens if she dies:

  • Do you need her income to stay in your home?
  • Will you need to purchase child care? What will that cost?
  • How much income is she contributing to the home from work?
  • What in-home services does she provide that you will have to hire someone to do if you can’t?
  • What does your family care plan look like? Is there a relative who can take the children on short notice when you’re away, on deployments or for training?
  • Will you have to leave the military if your spouse is no longer there to take care of your children, letting you focus on the mission? If so, how much time will you need to look for a civilian job?
  • Was your spouse contributing to a college fund?
  • Can you reasonably expect some final expenses for medical care (over and above what’s covered under TRICARE? (All you brand new same-sex couples in the military, pay attention, here!)

If the answer to the above questions is yes, and the dollar amount involved is more than you can easily afford, then you should definitely consider buying some life insurance on your spouse.

Fortunately, if your spouse is in very good health, term insurance is very cheap for young people of military age (and their typical spouses!). Considering the stakes involved – including possibly being forced to leave the service under a hardship discharge to care for children - it’s a no brainer.

Let’s take a look at some of your options:

FMGLI

You can buy up to $100,000 of coverage for your spouse via Family Members Group Life Insurance, or FMGLI. You can’t insure your spouse for more than you’re covered for. And you can buy that coverage in increments of $10,000.

You can also cover children up to age 18, or up to age 23 if they are enrolled in a qualifying educational program.

Advantages of FMGLI

The biggest advantage of FMGLI is the lack of medical underwriting. You can cover your spouse and children regardless of their medical history or conditions. However, you must make the election as soon as they are eligible to enroll. If you choose to decline coverage, they will have to medically qualify if you choose to add coverage later.

The coverage is also very affordable: You can buy the maximum $100,000 of life insurance protection for any spouse under age 35 for just $5 per month.

Your spouse is also automatically enrolled in the program, unless you choose to decline coverage. Once you decline coverage, though, you must show that she is in good health before you can reenroll her.

Disadvantages of FMGLI

Unlike SGLI, you can’t continue FMGLI coverage through Veterans Group Life Insurance after the military member and sponsor leaves the military.

This could be a problem – especially for spouses with medical issues. Suppose you want to get out of the military before the children are grown? Or suppose something happens to you and you are wounded, injured, get sick, or are medically separated from the military? If your spouse is still in good health, you can buy private coverage for her. But if she develops any number of common ailments – high blood pressure, obesity, diabetes, multiple sclerosis, schizophrenia, cervical, uterine and ovarian cancers, skin cancers, leukemia, and even depression, you may find it expensive or impossible to buy life insurance for her once you leave the military.

Further, if you are disabled, you will be even more dependent on her, and life insurance coverage that much more vital – even as her coverage is stripped away because you were medically separated.

There are programs for her to buy a permanent life insurance policy upon your separation – more on those in a bit – but you may not be able to get the face amount of coverage you need at a premium you can afford.

Furthermore, you cannot convert FMGLI to a permanent life insurance policy if you wanted to. If you ever wanted to upgrade to a cash value policy, such as whole life or universal life, you would not have the same options you have with a term policy from many other private carriers.

For this reason, I suggest using FMGLI as a supplementary life insurance for spouses – not the main event.

To enroll your family member download form SGLV 8286 A – Family Coverage Election.

Private Coverage

In addition to the FMGLI program, you can buy supplementary coverage from literally hundreds of different life insurance companies – depending on your state.

The cheapest life insurance there is – in the short term, is term life insurance. If your spouse is willing to take a medical exam (they usually send a nurse to your home or workplace, free of charge), and she’s in good health, you can get more coverage much more cheaply than if she tried to skip the medical exam. (Why? A phenomenon called adverse selection. People who are sick have much more inclination to buy policies that don’t require a medical exam – driving up premiums for everyone in the pool. You don’t want to be in the same risk pool with people trying to avoid the medical exam, if you can help it! You can tell these plans by the words “guaranteed issue,” and “you cannot be turned down!”

Some things to look for in a private insurance company:

  • An agent who listens to your needs
  • Solid ratings (A or better) from Moody’s, Standard & Poor’s, Fitch and/or A.M. Best.
  • Guaranteed renewability
  • Right to convert to a permanent policy (whole life or universal life)
  • “Waiver of premium” rider, guaranteeing that the insurance company will pay the premiums on your behalf in the event of a disability.
  • Competitive premiums, given the length of the term or face amount.
  • Short terms available – one to five years, guaranteed renewable. You can lock in coverage for longer terms, and some companies will sell coverage out to 20 to 30 years, level term. This drives premiums up. If you really crunch the numbers, you may be better off with a permanent policy, plus the accumulated cash value, than with a 20 or 30 year term policy, depending on the circumstances.

Conversion after Leaving the Military Family

The Department of Veterans Affairs administers a little-known program that allows military members and spouses to convert their SGLI or FMGLI coverage to private coverage automatically. There’s no medical exam required.

Spouses who are insured under FMGLI program have the option to convert spousal coverage to an individual policy of insurance within 120 days from any of the following events:

  • The date of the Service member's separation from the military
  • The date of the Service member's divorce from current spouse
  • The date of the Service member's written election (Form SGLV-8286A) to terminate Spousal SGLI coverage
  • The date of the Service member’s written election (Form SGLV-8286) to terminate his/her SGLI coverage
  • The date of the Service member's death.

Note that you can’t buy a term policy under this program. It has to be a permanent cash value policy – i.e., a whole life or universal life policy. As of April, 2012, you can convert with any of these companies:

  • Amalgamated Life Insurance Company
  • American Fidelity Life Insurance Company
  • Bankers Life and Casualty Company
  • CICA Life Insurance Company Of America
  • EMC National Life Company
  • Employees Life Company (Mutual)
  • Family Benefit Life Insurance Company
  • Farmers New World Life Insurance Company
  • Federal Life Insurance Company (Mutual)
  • Investors Heritage Life Insurance Company
  • Kanawha Insurance Company
  • Life Insurance Company of Alabama
  • Metropolitan Life Insurance Company
  • New York Life Insurance Company
  • Northwestern Mutual Life Insurance Company
  • Prudential Insurance Company Of America
  • Reliable Life Insurance Company
  • SBLI USA Mutual Life Insurance Company, Inc.
  • Security National Life Insurance Company
  • Tower Life Insurance Company
  • Transam Assurance Company
  • Trans World Assurance Company

To apply, you’ll need to contact the sales office of any of the above companies, and provide the agent with any of the following documents:

  • Form DD-214 or NGB-22, or written orders.
  • The Certificate of Dissolution of Marriage between the spouse and the service member.
  • The service member's FSGLI Spousal declination Form SGLV-8286A.
  • The service member's SGLI declination Form SGLV-8286.
  • The Service member's proof of death (Report of Casualty Form DD 1300 or civilian death certificate).

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