The purpose of life insurance is to replace your income in the event of your death, for someone who depends on it.

The bottom line — if you have dependents, you need life insurance.

* A caveat to this is, if you are single and do not have anyone who depends on your income (ie: a spouse and/or children), then you do not need life insurance.

If you can answer “yes” to the question below, you need life insurance.

Does someone depend on your income?

If you answered “yes” and determined that you do need life insurance, then what kind do you need?

Many of us in the military are familiar with the SGLI (Service Group Life Insurance) plan that is offered through the military, and it is a convenient way to secure life insurance. This plan offers $400,000 in life insurance for approximately $29/month.

While the SGLI is a decent option for military members in terms of life insurance, there are a few things to consider:

1. The $400,000 coverage with the SGLI plan may not be enough
2. If you leave the military, this life insurance coverage will no longer be in effect

So what is the *best* option for you and your family?

Term Life Insurance

Term life insurance is the best option for quite a few reasons. As mentioned before, the purpose of life insurance is to replace your income for someone who is counting on it.

However, if you follow the financial plan to wealth, you do not need to have life insurance coverage for your whole life (which is why whole life policies are NOT the best option) because you will eventually be able to self-insure.

A 20-Year Term Life Insurance Policy for 10-12 times your income is the way to go.

How does this work? Let’s use our friend, Lt Snuffy as an example.

Lt Snuffy is 23 years old, married and has a one-year-old son. If he gets a 20-year term life insurance policy through USAA (for example), he is only paying about $20/month for $500,000 of life insurance coverage. In 20 years, he will be 43 years old. What will his life look like then?

At 43 years old, Lt Snuffy will

1. Be out of debt
2. Have saved 6-months of an emergency fund
3. Will have been contributing 15% of his income to retirement, completely retired from the military and collecting a pension
4. Will have saved for his son’s college (who is 21 years old and out of the house now)
5. Have bought a house and will be enjoying military retirement and time with his spouse as they settle down in a new area

He and his spouse would have saved up enough money so that his spouse and son no longer depend on his income–and therefore would not need to rely on his life insurance policy should he pass away. They are self-insured, and therefore do not need to rely on life insurance policies for their whole life, only for a term.

As long as you remain diligent in budgeting, saving and investing your paycheck, term life insurance is the way to go.

Term life insurance is very inexpensive, and can put your mind at ease knowing that you are protecting your family in the event that something happens to you.

I personally use both the SGLI and term life insurance to ensure extra protection for my husband and daughter, in case something should happen to me.

Life insurance through USAA is very simple to apply for and procure. Another option for shopping various term life insurance policies is through places like Zander Insurance.

One Last Thing:
Term Life Insurance is for ~Both~ Parents in a Home

If you are married and your spouse does not work outside the home — do NOT take what they do for granted.

Many people may think that if their spouse does not generate income outside the home, that they do not need to get life insurance policies–don’t fall for this trap! My husband as a student and stay-at-home dad does more for our family than I ever could on our own.

Spouses who stay at home not only take care of kids, they run the household–which is an entire operation on its own. To pay someone else to do this would truly place a large financial burden on the surviving, military spouse.

Therefore, I recommend getting at least a $250,000 life insurance policy on your spouse to generate enough income you would need to pay for someone else to perform all the tasks they do on a day-to-day basis that we often take for granted.

Final Thoughts

When we are in the grind, it is easy to figure everything is going to go well and nothing bad will happen to us or our families.

…But are you willing to take the risk of your family NOT being protected in the event of your death?

Give yourself the peace of mind by knowing your family will be taken care of in the event of your death. They will already have to go through the emotional difficulty of losing you–don’t let them have to worry about where their next paycheck will come from too.