What Military Families Can Teach You About Buying Life Insurance - SmartAsset

Whether it’s the Air Force, Space Force, Army, Navy or Coast Guard, members of the U.S. armed forces are well known for their discipline and readiness – even when it comes to life insurance. That comes through in a new survey from USAA Life Insurance Company that examines how civilian and military families handle life insurance and end-of-life planning. If you’re considering life insurance, you might want to work with a financial advisor who can help you determine the right amount and type you need to protect your family.

Preparing for the Unknown With Life Insurance

While 84% of military family respondents (from the USAA survey) said they believe their family would be financially secure in the event of their death, just 74% of civilians said they were protected.

“Preparedness is key when it comes to dealing with uncertain financial situations,” said Brandon Carter, president of USAA. “Life insurance may be an uncomfortable topic, but it can make an enormous difference for your family in the event of an unexpected death.”

It’s no surprise that active-duty military personnel would carry insurance, and most have coverage through Servicemembers’ Group Life Insurance, but many working civilians also get coverage as an employee benefit. On top of that, nearly 50% of both military and civilians said they also carry private life insurance policies, with about 75% purchasing benefit amounts of $500,000 or less.

Despite that coverage, 40% of civilian families and 27% of military families say they wouldn’t have enough money to cover more than one year of housing payments, childcare and other basic living expenses if the family’s primary financial provider died.

Military Families’ Opinions on Life Insurance

The survey also provided a lot of other opinions related to retirement and life insurance overall. These results from the survey included:

Inflation: Among military families, 70% said they are worried that inflation is reducing spending power in their retirement and/or their life insurance plan, with 59% of civilians reporting the same concern.
Tough topics: One reason many families aren’t prepared with life insurance is that they’re uncomfortable discussing death. However, the USAA survey found that 67% of military respondents and 57% of civilians said they were okay with discussing plans for an unexpected death.
Cloudy about cost: One reason for not buying life insurance that was shared nearly equally among civilians and military families (31% vs 29%) is that they’re unclear or how much coverage will cost or are worried about the high monthly cost.
Don’t need it: Another reason for avoiding life insurance is that some families already have enough other financial resources without needing it, according to 27% of the military respondents and 13% of civilian families.
COVID-19 concerns: The death toll and damage of the global pandemic were cited as a leading reason for getting life insurance coverage by 15% of civilians and 12% of military survey takers.
Personal losses: Among both military and civilian respondents, 15% said they purchased life insurance policies after the recent death of a friend or family member.
How much they need: Typically, insurance experts recommend carrying life insurance with a benefit amount that would pay off all debts and replace the deceased person’s income providing for dependents for at least five years. Among military families, 53% said they had enough coverage to cover that goal, compared with 30% of civilians.

How Affordability Impacts Life Insurance

As with any investment or purchase, both civilian and military respondents said affordability was cited as a primary concern when it comes to selecting life insurance coverage. Affordability showed up in these key results:

Close to 70% of respondents said affordability was the leading factor in selecting coverage. More than half said they think the average monthly cost of a life insurance policy runs between $25 to $100.
40% said they rely on the advice and support of life insurance agents to figure out how much coverage they need to carry.
60% choose coverage based on either default or standard option, or on what will work in the family budget.

No matter how you slice it, the affordability of life insurance is having a large impact on who gets covered. It is likely that more families would be covered if it was a bit more affordable, but many people can make it fit into their budget with the right adjustments.

The Bottom Line

We can learn a lot about sacrifice and preparation from members of our military and their families. Seeing their thoughts and the feedback provided on life insurance can give us a good scope to make better life insurance decisions. While affordability is always going to be high in our reasons not to get life insurance, the protection it provides your family could be well worth the cost.

Tips for Buying Life Insurance

There is a lot to consider when buying life insurance. From the type of coverage you need to how much you want your family to receive, it all impacts how much you pay and when your family receives the benefits. If it’s a lot to handle, consider working with a financial advisor who can help you find the right balance for your personal situation. Finding a financial advisor doesn’t have to be difficult. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
It isn’t very clear how much life insurance coverage is the right amount so that your family is protected against the unexpected. You can use SmartAsset’s free calculator to determine how much life insurance might be enough for your situation.