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Life Insurance for Military Families

There are approximately 1.3 million1 men and women serving in the U.S military today, some facing dangerous combat and travel adversities. As a result, many are recognizing the importance of life insurance in a military personnel’s financial portfolio as it helps protect against financial hardships for the surviving family. Fortunately, the U.S. government provides comprehensive policies to our military, but is it enough coverage to leave the family in a position of strength should the worst happen? 

A great exercise to help determine your necessary coverage amount is the D.I.M.E. method which outlines your debt, income, mortgage, and education costs.

The fundamental use of life insurance is to leave your family with financial protection in the event of your death.  Your death benefit can help cover expenses such as:
  • Funeral/burial
  • Mortgage
  • Supplement income
  • Child college funds
Our military is composed of members ages 18 to older than 50, so some of these points of coverage may not be applicable to everyone. Defining your need for life insurance can help you determine how much coverage you need, resulting in a better attempt to get the appropriate amount of coverage.   
When determining your need for life insurance, it may be helpful to discuss specifics if you were to pass. Helpful questions to get you started could include:
  • Who is the primary breadwinner in my household?
  • What bills does the primary breadwinner pay?
  • If the primary breadwinner were to die, how would those bills get paid?
  • Does the primary breadwinner support anyone else?
  • If the primary breadwinner has someone to support, what type of financial support is expected from the primary breadwinner? How would those expenses be paid?
When discussing these topics, it’s important to remember life insurance is not for you – it’s for those you will leave behind. You’ll want to ensure all of your financial obligations will be met even after your death so your survivors can mourn properly and from a position of financial strength.   
Once you’ve defined what you need to cover, it’s time to pull the numbers together and get an estimate of what face value (amount of coverage purchased) you’ll want to search for.
A great exercise to help determine your necessary coverage amount is the D.I.M.E. method which outlines your debt, income, mortgage, and education costs.
For this example, we’re going to apply the DIME method to a young military family whose primary provider is a Lance Corporal in the United States Marine Corps. The family has a moderate home purchased for $250,000. They have two young girls who plan to attend college, but want to pay down his car loan and her student loan debt first. Here’s how it adds up:
  • DEBT
    • $60,000 in student and car loans
    • $80,000 = $42,000 (his) + $38,000 (hers)
    • 3 years worth = $240,000
    • $250,000
    • $200,000 = $100,000 (per child)
  • DIME TOTAL = $750,000
According to this DIME model, the Lance Corporal may need around $590,000 in coverage. Of course, everyone has different needs for life insurance and while this was just an example, you can see the benefit to customizing the numbers to your specific situation to help determine your coverage.
While no one may want to talk about loss, it’s crucial to plan for the future of your loved ones – especially military families as they may face greater risks. There is no “one size fits all” for insurance and the process could potentially get complex, so you may want to consider speaking with a licensed insurance professional and or financial advisor before purchasing anything.
  1. Council on Foreign Relations, Demographics of the U.S. Military, 2018