For some in the military, term life insurance is adequate. Term life insurance covers you and your family for periods of one year to 30 years. Others in the military may prefer whole life insurance, also called universal life insurance coverage.

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Military Life Insurance

On Your Terms: Whole Life or Term Life Insurance?

What serves your military lifestyle best: term life insurance or whole life insurance?

For some in the military, term life insurance is adequate. Term life insurance covers you and your family for periods of one year to 30 years. Upon death, a term life policy would pay your beneficiaries the face value of your term life insurance policy.

Others in the military may prefer whole life insurance, also called universal life insurance coverage. Whole life insurance can be seen as a combination life-insurance-and-forced-savings/investment plan. Because as you pay insurance premiums into your whole life insurance policy, you build cash value that you can borrow against later.

The interest income on your whole life insurance premiums is very low, but knowing that you can also borrow against the cash value of your policy at low, fixed interest rates, serves some military families very well.


The choice depends on what you want your life insurance to accomplish for your military family.

Term life insurance is excellent protection against premature death. If a wage earner in your family dies, term life insurance is designed to replace that lost income for your young, growing military family.

However, estimates reveal that less than one-percent of term life policies sold ever pay that death benefit. Why? The term of coverage often expires before you die.

Term life coverage almost always stops well before normal life expectancy is reached, especially as today's life expectancy rates are steadily increasing.

If a husband and wife are both age 65 today, there is a 50% chance one of them will live to age 92 and a 25% chance one will reach age 97. Term life insurance often doesn't extend that far.

So while term life insurance plans can be exceptional values for a younger military family, it can become very expensive when you reach your 60s and 70s.

With term life insurance policy, you can get more life insurance coverage for less cost - but you give up the ability to borrow against your premiums, a nice perk available with whole life insurance.


Whole life insurance is a good way to build an estate for your heirs. If you had three children and wanted to leave each of them $100,000, a whole life policy for $300,000 with three primary beneficiaries would accomplish that goal easily.

Whole life insurance can be there to provide the funds that your military family may need to pay any costs associated with settling your estate.

Since life insurance passes directly to a beneficiary, it avoids probate and other administrative issues. That means that your whole life insurance death benefit can provide funds so that your military family does not have to liquidate other assets, such as equities or real estate, at an inopportune time.


Consider that a married couple living on their Military Pension and Social Security, and supplementing their income with private savings, will see a substantial decrease in both military pension and Social Security when the service retiree dies. A military pension can end if the military retiree was not participating in SBP; at best, the military pension will be reduced to 55% of that pension under SBP. Total Social Security income will be reduced as well.

Whole life insurance can be a wonderful income supplement at that time, providing funds to compensate for this loss of military retirement income. In that way, a whole life insurance policy can be viewed as a powerful forced savings plan to support your family later on.

The sooner you sign up for your whole life insurance plan, the lower the premiums; and you may even have your whole life plan totally paid up before your military retirement.

Additionally, whole life insurance has a cash value that can be accessed through a loan, or be converted to an annuity, to supplement retirement income when insurance is no longer necessary.

The bottom line is that both term and whole life can have a place in your estate and your financial planning model. Most military families are well served by using both whole life insurance and term life insurance, in appropriate amounts, often with the help of their estate or financial planner to advise them.

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