Military Officer - November 2008 - (Page 48)

financialforum Life Insurance A review of your life insurance coverage should be a part of your regular ﬁnancial checkup to ensure you have the coverage needed to protect you and your family. By Phil Dyer, CFP A Time to Review Your Coverage ■ Any time you have a major life change — marry or divorce, have a child, buy a home, or change jobs — it probably is a good time to review your life insurance needs. significant number of Americans are underinsured and don’t carry enough life insurance to cover expenses such as mortgages, college costs, and income replacement for wage earners. Whether you are active duty, in your second career, or fully retired, you should review your life insurance coverage regularly. Consider the following questions: How much do I need? This should be your starting point. If you are on active duty, don’t assume $400,000 — the current maximum — of Servicemembers’ Group Life Insurance (SGLI) will cover all your insurance needs. If you are in your second career, the insurance provided by your employer usually will need to be supplemented. Don’t forget to cover stay-at-home spouses. Salary.com recently released a survey pegging the annual “salary” of a stayat-home mom as $131,000. Work with a life insurance agent, or use an online calculator, such as MOAA’s calculator at www.moaa .org/ﬁnancialcenter/calculators/lifeinsur ance.html, to determine what will be required to protect your family. What type of insurance should I get? As a general rule, level-premium term insurance is the best bet for most families. Available in ﬁve-, 10-, 15-, 20-, 25-, and 30-year coverage periods, the premiums and coverage stay the same for the life of the policy, making it predictable. Term policies used to become too expensive to renew by age 60-65, but recent changes in rate tables now make it possible to obtain term coverage that lasts to age 70-75. You typically can purchase ﬁve to six times more term insurance for each dollar spent than if you purchase a permanent or cash value policy (such as whole life, universal life, adjustable life, and variable universal life). Those in the process of separating or retiring from the military have 120 days to convert SGLI to Veterans’ Group Life Insurance (VGLI) without concern about health issues. However, $400,000 of VGLI costs $88 a month for someone 45 years old. If you are in good health, a commercial insurance provider most likely will offer a comparable product that is signiﬁcantly less expensive. Where should I buy my insurance? There are a number of military-friendly insurance carriers that will cover active duty servicemembers without a war clause. Those in their second careers often can obtain signiﬁcant amounts of life insurance through their employer, but be careful about tying up too much of your insurance with your employer, because it might not be portable if you leave the company. Regardless of where you purchase life insurance, make sure the company has at least an “A” rating from organizations such as Weiss or A.M. Best. MO — Former Army Capt. Phil Dyer, CFP®, is deputy director, Beneﬁts Information and Financial Education. To ﬁnd a ﬁnancial planner near you, contact Garrett Planning Network at (866) MOAA-GPN (662-2476) or www.moaa .org/garrett, or visit www.moaa.org/ﬁnancial center for other resources. PHOTO: SEAN SHANAHAN 48 MILITARY OFFICER NOVEMBER 2008 http://www.Salary.com http://www.moaa.org/financialcenter/calculators/lifeinsurance.html http://www.moaa.org/financialcenter/calculators/lifeinsurance.html http://www.moaa.org/financialcenter/calculators/lifeinsurance.html http://www.moaa.org/garrett http://www.moaa.org/financialcenter http://www.moaa.org/garrett http://www.moaa.org/financialcenter

Table of Contents Feed for the Digital Edition of Military Officer - November 2008

Military Officer - November 2008 Contents From the Editor From the President Your Views MOAA Directory Rapid Fire Washington Scene Chapters in Action Financial Forum Ask the Doctor Financial Guidebook Out of the Red 7 Year-End Tax Strategies Cover Story: Memory Survives Something to Say MOAA Scholarship Recipients Pages of History Faces of MOAA Information Exchange Member Books Advertising Index MOAA Member Services MOAA Calendar Sounding Taps Encore

Military Officer - November 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.