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2012 Military Times Insurance Guide: Look at total picture when considering spouse policy

Jan. 21, 2012 - 11:55AM   |   Last Updated: Jan. 21, 2012 - 11:55AM  |  
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When Vivianne Wersel and her husband reviewed their life insurance needs in 1993, their two children were toddlers. In addition to the commercial policy they bought in her husband's name to supplement his Servicemembers' Group Life Insurance, they also bought a smaller life insurance policy for her, to cover child care costs.

Their concern was what would happen to the family's finances if something happened to him. But like many military spouses, her income also was important to the family's finances.

Active-duty members may not focus on insuring their civilian spouses, because the service member may be the one earning the most money and the one with the most dangerous job.

But even if a spouse doesn't work outside the home, financial experts say it's worth considering a life insurance policy on the spouse. After all, if a spouse passes away, the service member could have to pay for child care, or for additional assistance in the home.

Bob Nolan of the Military Officers Association of America said couples should consider their total financial picture when determining insurance needs: Would you be able to pay the rent or mortgage, car payment, utilities and other bills if your working spouse died?

When MOAA recently offered $50,000 in life insurance for spouses without requiring a medical exam, they got a "huge response" from spouses of MOAA members, Nolan said.

In addition to commercial policies, troops insured under the SGLI program can consider buying up to $100,000 worth of term life insurance for their spouse through the Family SGLI program.

Premiums vary depending on the age of the spouse, and increase as the spouse ages. Family SGLI is offered in increments of $10,000, but can't be more than the service member's coverage.

Coverage for spouses under Family SGLI ends 120 days after the service member leaves the military, dies or decides in writing to terminate the spouse's coverage or to terminate his or her own coverage. It also would end 120 days after the date of divorce.

Family SGLI for spouses cannot be carried over to Veterans' Group Life Insurance if service members opt for that coverage.

However, spouses can convert their Family SGLI policy to a commercial policy without having to provide proof of good health, such as a medical exam though they must convert the policy to a permanent policy, such as a whole life policy. Other types of policies, such as term, variable life or universal life, are not allowed for these conversions.

A list of commercial providers who participate is provided by the Veterans Affairs Department. http://www.insurance.va.gov/sglisite/converting/FSGLI.htm">Click here for details.

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