When retired Navy Capt. John Day's son was a toddler, he realized he needed to buy extra life insurance. As the family breadwinner, he knew his wife, Christi, would need the money to support her and their son, a child with special needs.
He performed a needs assessment with help from Navy Mutual and in addition to more coverage for himself, he bought a life insurance rider on his wife – about $50,000, he said.
Christi Day passed away in 2013, after a battle with cancer. By then, the term of the insurance had expired – their son was in his early 20s, and John Day was an O-6. But the policy had served its purpose, giving the young family piece of mind as their son came of age.
"That's the good thing about term coverage. You have it as long as you need it," John Day said. "That's why term insurance was good for those formative years. …
"If something happened to my wife, caring for a child full-time … could add up to a lot of money if I ended up a widower," Day said. "Just thinking about what I would do for day care … who was going to take care of my son? To find someone to do what my wife was doing for our child – how much would that cost, and for how long?"
Families with special-needs members must look at the issue closely, he said.
While Day was an active-duty lieutenant, "we were living all over the place, and didn't have family to tap into to provide that role," he said. His wife not only took care of clothing, groceries, medical care and other needs on the home front, but she also homeschooled their son.
Everyone needs to re-evaluate life insurance needs at various points, such as marriage and the birth of a child. In the Days' case, when his wife became ill, as they were getting their estates in order, John Day converted his life insurance policy into a policy for their son's trust, so that when John Day dies, the trust will be the beneficiary.
One starting point for military families is spouse insurance available to those who have Servicemembers Group Life Insurance. Family SGLI offers up to $100,000 in coverage. Get details at www.benefits.va.gov/insurance/fsgli.asp.
"Having coverage for spouses, especially when they have children, is very important," said Mike Meese, a retired brigadier general who is chief operating officer and secretary of American Armed Forces Mutual Aid Association.
He cited the example of his daughter and his son-in-law, who is a soldier. They have two young children.
"His life would change substantially if she were to die," Meese said. "If he had to get a live-in day care person, he'd burn through $100,000 pretty quickly."
Karen Jowers covers military families, quality of life and consumer issues for Military Times. She can be reached at firstname.lastname@example.org.