As a servicemember, your dedication to our country earns you a tremendous insurance benefit. Servicemembers’ Group Life Insurance (SGLI) offers low-cost term coverage to eligible servicemembers, up to $500,000. It’s a great program, and servicemembers and their families should consider taking advantage of it while they have access to it.

Although $500,000 is a lot of money, it isn’t always enough to fully protect your family in the event of your passing, and SGLI coverage ends when you leave active service. That’s why it’s important to sit down and crunch the numbers to determine the amount of coverage you need to keep your family thriving, should the worst happen.

The Insurance Gap, Explained

Life insurance is designed to serve as a financial safety net for your family in the event of your passing; it can help your family cover lost income, pay bills, debts, funeral costs, and other expenses. But nearly half of American households have a gap of approximately $200,000 between their life insurance coverage and their life insurance needs. Depending on your family’s ongoing expenses or financial obligations and goals — such as a mortgage, college costs, or aging parents — the maximum $500,000 coverage of SGLI might not go as far as you think, especially if you’re the main income earner.

Example: Let’s say an Active Duty servicemember with a family has $500,000 of SGLI coverage and purchases a home with a $500,000 mortgage. In the event of their death, that servicemember’s SGLI life insurance might be enough to cover the family’s mortgage, but not much else, such as unfunded college savings, existing car or home improvement loans, etc.

How to Bridge the Gap

Supplemental life insurance can bridge the gap between what SGLI provides and the coverage your family actually needs to maintain their lifestyle and continue to reach their financial goals. As you calculate the amount of additional coverage your family may need, consider getting a plan for each spouse individually. Each of you contributes to your family’s pursuits and should have coverage to protect the surviving spouse and children. Even if your spouse is not working outside of the home, their contribution should be accounted for.

It’s also important to remember that unless you apply for and receive an extension, SGLI coverage ends 120 days after the servicemember’s separation date. So if you are planning to leave the military, you will need to replace the SGLI coverage. And the sooner you do it, the better because the cost of securing a policy will only increase as you age. You are often better off replacing your life insurance prior to separation with a policy that will remain in effect long after service ends. There are a wide variety of affordable term life insurance policies available for this very purpose, offering various levels of coverage.

Get the Protection and Peace of Mind You Need

Building a solid plan is an essential step to take toward a more secure financial future for your family. Sit down today to estimate your life insurance needs and to determine if you have an insurance gap.

Need extra support? Call a Membership Coordinator today at 877-398-2263 for expert guidance to help you achieve financial security and peace of mind for your family.

This article was originally published May 18, 2017.