Report: Demand For Permanent Life Insurance Rising In Military Families
Demand for permanent life insurance is on the rise in America’s career military, where the majority of families either already own or are currently thinking about buying this type of coverage, according to the First Command Financial Behaviors Index®.
First Command's eighth annual life insurance survey reveals that 73 percent of middle-class military families (commissioned officers and senior NCOs in pay grades E-5 and above with household incomes of at least $50,000) own some form of permanent life coverage. And 70 percent of those without permanent life coverage say they are likely to consider buying a policy for themselves or someone in their household. That’s up 21 points from the previous year and represents a record high for the annual survey.
Demand for permanent life insurance among military families has been on a continuing upward trend. In 2011, just 42 percent of respondents reported owning some form of permanent life insurance and 28 percent said they were likely to purchase.
Interest in permanent life insurance is considerably stronger in military families than in the general population. The Index reveals that just 42 percent of civilian families own some type of permanent coverage. Among non-owners, 45 percent say they are likely to consider purchasing a permanent life insurance product.
Whole life is the most popular form of permanent life insurance coverage. It is owned by 46 percent of military respondents versus 30 percent of their civilian counterparts. Less common types of permanent coverage include universal life (owned by 22 percent of military families versus 10 percent of the general population) and variable life (15 percent versus 5 percent).
Demand for term life insurance products is about the same in both groups. The Index reveals ownership rates of 43 percent in military families and 41 percent in the general population. And demand is relatively steady. Ownership rates are statistically unchanged from the previous year.
Military families buy permanent insurance products as supplemental coverage to their government benefits. Active-duty personnel are eligible for up to $400,000 in Servicemembers' Group Life Insurance, commonly known as SGLI. They may add optional spousal coverage of up to $100,000 and dependent coverage of up to $10,000. After leaving the service military personnel may convert SGLI to Veterans' Group Life Insurance (VGLI); however, premiums may be higher and are based on the age of the insured.
“Supplemental commercial policies allow military families to increase their overall coverage now and provide longer-term protection for their post-military lives,” said Scott Spiker, chairman/CEO of First Command. “By adding permanent life insurance to their government-provided coverage, career military families seek to more fully and effectively confront their present and future needs. They can address the current uncertainties of military life today – uncertainties that can include the risk of a service-related death – as well as pursue long-term financial security tomorrow.”
About the First Command Financial Behaviors Index®
Compiled by Sentient Decision Science, Inc., the First Command Financial Behaviors Index® assesses trends among the American public’s financial behaviors, attitudes and intentions through a monthly survey of approximately 530 U.S. consumers aged 25 to 70 with annual household incomes of at least $50,000. Results are reported quarterly. The margin of error is +/- 4.3 percent with a 95 percent level of confidence. http://www.firstcommand.com/fbi/
About Sentient Decision Science, Inc.
Sentient Decision Science was commissioned by First Command to compile the Financial Behaviors Index®. SDS is a behavioral science and consumer psychology consulting firm with special vertical expertise within the financial services industry. SDS specializes in advanced research methods and statistical analysis of behavioral and attitudinal data.
About First Command
First Command Financial Services and its subsidiaries, including First Command Financial Planningand First Command Bank, coach our Nation’s military families in their pursuit of financial security. Since 1958, First Command Financial Advisors have been shaping positive financial behaviors through face-to-face coaching with hundreds of thousands of client families.
First Command Financial Services, Inc., is the parent of First Command Financial Planning, Inc. (Member SIPC, FINRA), First Command Advisory Services, Inc., First Command Insurance Services, Inc. and First Command Bank. Financial planning services and investment products, including securities, are offered by First Command Financial Planning, Inc. , a broker-dealer. Financial planning and investment advisory services are offered by First Command Advisory Services, Inc., an investment adviser. Insurance products and services are offered by First Command Insurance Services, Inc., in all states except Montana, where as required by law, insurance products and services are offered by First Command Financial Services, Inc. (a separate Montana domestic corporation). Banking products and services are offered by First Command Bank. In certain states, as required by law, First Command Insurance Services, Inc. does business as a separate domestic corporation. Securities products are not FDIC insured, have no bank guarantee and may lose value. A financial plan, by itself, cannot assure that retirement or other financial goals will be met. First Command Financial Services, Inc. and its related entities are not affiliated with, authorized to sell or represent on behalf of or otherwise endorsed by any federal employee benefits programs referenced, by the U.S. government, or the U.S. armed forces.