I've spent the last few days in San Antonio, at a conference hosted by USAA. During one portion of the conference, we met with representatives from different departments and learn about the things they are doing. I spent some time talking with representatives from the life insurance department. I'd just read Forrest Baumhover's article about Veterans Group Life Insurance, and my head was brimming with thoughts. (Note: I don't agree with Forrest's suggestions, but I appreciate them as material for consideration.)
I used to think that it made sense to use Servicemember's Group Life Insurance (SGLI) and Family SGLI as major components of your life insurance, and just replace it with another term policy when the service member separates. As I get older, and see how life unfolds, I see more and more instances where the service member or spouse develops medical issues that make life insurance hard to obtain after leaving the military. Sometimes it is just super-expensive, and sometimes they are uninsurable. This is why I always recommend that separating members secure their life insurance before they have to decide whether to take the more expensive VGLI.
This week, I've changed my position a little bit. I now believe that, in many cases, it makes sense to purchase private insurance much earlier. By having a private policy in place before medical issues crop up, you can avoid finding yourself in a situation where your only options are super-expensive or VGLI. Some companies, like USAA, offer policies that allow you to increase the amount of coverage without further medical qualifications. These policies, designed with the military in mind, are a great way to get the right insurance at the right time at the best possible price.
Obviously, there are many considerations when deciding how much life insurance you need and what type of policies are best for your situation. There is no single right answer, and it is easy to be paralyzed by the many options out there. On some level, it is better to pick something and buy it than to fail to purchase coverage because you're stuck. In that case, a term policy is probably the right choice for simplicity and cost.
I can't tell you what insurance is right for you, your family, and your life. I can help you think about various scenarios and things to think about.
Disclosure: I was in San Antonio for a conference paid for by USAA. I ate some meals that were provided by USAA, I got some nifty trinkets, and drank a lot of iced tea. I paid for my own transportation and hotel room. My opinions are 100% mine. I was not asked to write this post, nor am I being compensated for it.
