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Military Family Insurance Resources

Strategizing Your Life Insurance Coverage


As a military servicemember, you receive several benefits automatically. Some will provide default coverage or accessibility to programs and services; others require you to make certain selections so that you receive the right protection, coverage or information you need for your unique situation — such as the stage of life you’re in. When you just enter the service, you receive Servicemembers Group Life Insurance automatically, and if you do nothing at all, you will be signed up for $500,000 coverage by default. It’s your right to decline it or reduce it if you so choose, but is that the best option you can make for yourself? Determining that is up to you, but here are some things to think about as you’re strategizing your life insurance plan.

Defining Your Coverage

Here’s what you get automatically, pending any other personal selections or decisions you make:

  • SGLI: Servicemembers Group Life Insurance provides $500,000 of life insurance for $30/month. You must have SGLI to get TSGLI or FSGLI.
  • TSGLI: Traumatic SGLI costs $1/month to provide up to $100,000 if the servicemember suffers a traumatic injury, including loss of limb, sight, or other trauma.
  • FSGLI: Family SGLI provides up to $100,000 of coverage on spouses for $4.50/month for spouses under 35 (the cost is slightly higher for older spouses). It also includes $10,000 coverage for each child.

Will all of that be enough?

Whether or not the life insurance plans above will provide the right coverage for you depends on your family’s needs, but what you can determine right now is how long the financial payouts would last. For instance, $500,000 would only last for about 8-10 years, based on average family expenses, such as a home mortgage, food and other regular purchases. Even if the $500,000 payout was invested prudently and combined with the VA DIC (Dependency and Indemnity Compensation), it may not be enough to sustain your family members throughout their lives. And, ultimately, that could present a hardship for them.

Can you do better?

“Better” may not be the right word. But what you can do, because you’re a member of the military, is give yourself and your family more. AAFMAA provides Level Term insurance for the American Armed Forces, with $50,000-$800,000 of coverage, premiums that never increase, and — unlike SGLI — it’s protection that stays with you even after you leave the military. Most importantly, it comes with our exclusive Survivor Assistance Services. At the time of an AAFMAA Member’s death, we coordinate with DFAS, the VA, and other organizations you participate in to ensure your family gets all the military, Veteran, and other benefits to which they are entitled after you’re gone.

Should you cancel SGLI?

Think toward the future before you make this decision. If you’re concerned about losing SGLI after you leave the service, or that it simply won’t be enough to cover your family’s long-term needs, you should not necessarily cancel it; however, supplementing your SGLI coverage with a policy such as AAFMAA’s Level Term Insurance can provide the extra coverage you’re looking for.

The total cost of your AAFMAA Level Term policy could be less than you are paying now, and it could provide a total of $500,000 of life insurance that continues after you leave the military. It also includes survivor assistance services to help your family while they’re dealing with the difficult time of losing you. The AAFMAA Level Term policy includes $10,000 of child life insurance, so your eligible children would have a total of $20,000 in coverage when combined with FSGLI. AAFMAA also offers plans specifically for your spouse and children that you can take advantage of.

Additionally, if you’re an E-5 through O-4 member of the American Armed Forces, you can start a $250,000 or greater life insurance policy by allotment and secure a $5,000 Career Assistance Program (CAP) loan at just 1.5%.

Have any questions? Call 866-330-0583 to speak with a Membership Coordinator for answers or to begin your application for a $500,000 AAFMAA Level Term I insurance policy. Or apply online right now.

This article was originally published January 7, 2021.