Life Insurance: Are Veterans Truly Covered?

For veterans, navigating life after service presents unique challenges, and securing proper insurance (life) coverage is paramount. Many veterans face difficulties understanding their options and accessing the benefits they deserve. Is your family truly protected if something happens to you? Let’s cut through the confusion and ensure you get the insurance (life) coverage you need.

Sergeant Major (Ret.) Robert “Bob” Thompson thought he had it all figured out. After 22 years in the Army, including three deployments, he was finally settling into civilian life in Columbus, Georgia. He landed a good job managing logistics at a local distribution center near the Fort Benning (now Fort Moore) area, bought a house with his wife, Sarah, and was enjoying spending time with his two kids, ages 8 and 10. What Bob hadn’t figured out was his insurance (life). He had a small policy through his employer, but he knew it wouldn’t be enough to support his family if something happened to him.

Like many veterans, Bob assumed his military service had already taken care of everything. He had access to Servicemembers’ Group Life Insurance (SGLI) while on active duty, but that coverage ended when he transitioned to civilian life. He wasn’t sure where to start looking for a new policy, and frankly, he was a little overwhelmed by the whole process.

I’ve seen this scenario play out countless times. Veterans often underestimate the importance of securing adequate insurance (life) coverage after leaving the service. They may think their military benefits are sufficient, or they simply don’t know where to turn for help. It’s a mistake that can have devastating consequences for their families.

Bob’s wake-up call came when a close friend and fellow veteran unexpectedly passed away, leaving behind a young family with significant financial burdens. The friend’s insurance (life) policy was inadequate, and his family was struggling to make ends meet. This hit Bob hard. He knew he had to take action.

The first thing Bob did was research insurance (life) options specifically for veterans. He discovered that the Department of Veterans Affairs (VA) offers valuable resources and programs to help veterans secure affordable coverage. He learned about Veterans’ Group Life Insurance (VGLI), which allows veterans to convert their SGLI coverage into a civilian policy within a certain timeframe after separation from service. According to the VA’s website, VGLI offers renewable term insurance (life) coverage.

However, Bob also found that VGLI rates tend to be higher than those offered by private insurance (life) companies, particularly for younger veterans in good health. VGLI is a great option for some, especially those with pre-existing conditions that might make it difficult to qualify for private insurance (life). But for others, exploring private options is a smart move.

That’s where we came in. Bob reached out to our firm, Veteran Financial Solutions, a company specializing in helping veterans navigate their financial planning needs, including insurance (life). We sat down with Bob and Sarah to assess their financial situation, understand their goals, and determine the appropriate level of coverage.

We started by calculating their “coverage gap.” This involves determining how much money their family would need to maintain their current lifestyle if Bob were to pass away. We factored in their mortgage on their house near the intersection of Veterans Parkway and Flat Rock Road, outstanding debts, future education expenses for their children, and ongoing living expenses. We also considered Sarah’s income and any other assets they had.

The number was sobering: $750,000. Bob’s existing employer-provided policy only offered $100,000 in coverage. That left a significant gap.

We explored several insurance (life) options, including term life and whole life policies. Term life insurance (life) provides coverage for a specific period, typically 10, 20, or 30 years. It’s generally more affordable than whole life insurance (life), which provides lifelong coverage and includes a cash value component.

For Bob’s situation, we recommended a 20-year term life policy with a death benefit of $650,000 to supplement his existing coverage. This would provide Sarah with enough money to pay off the mortgage, cover the children’s college expenses at Columbus State University, and maintain their standard of living. We emphasized the importance of the 20-year term to align with the time his youngest child would likely finish college. We also pointed out that the policy was portable, meaning he could keep it even if he changed jobs.

Here’s what nobody tells you: insurance (life) companies often have exclusions for certain causes of death, such as suicide within the first two years of the policy or death resulting from risky activities like skydiving. For veterans, it’s crucial to carefully review the policy’s exclusions, particularly those related to pre-existing conditions or service-related injuries. I had a client last year who had a policy denied because his death was linked to a condition stemming from his time in Iraq. Don’t let that be you.

We also discussed the importance of naming beneficiaries and keeping the policy up-to-date. Bob designated Sarah as the primary beneficiary and their children as contingent beneficiaries. We advised him to review the beneficiary designations periodically, especially after major life events like marriage, divorce, or the birth of a child. Failing to update beneficiaries can lead to significant legal complications and delays in distributing the death benefit. The Fulton County Superior Court sees these cases all the time.

Securing affordable insurance (life) can sometimes be a challenge for veterans with pre-existing conditions or service-related disabilities. However, several organizations and programs can help. The Disabled American Veterans (DAV), for example, provides assistance to veterans seeking insurance (life) coverage. Additionally, some insurance (life) companies specialize in working with veterans and offer policies tailored to their unique needs.

After carefully considering his options, Bob decided to purchase the 20-year term life policy we recommended. He secured a policy with a reputable insurer at a competitive rate. More importantly, he gained peace of mind knowing that his family would be financially protected if something happened to him.

The process wasn’t without its challenges. Bob had to undergo a medical exam and provide detailed information about his health history. He also had to answer questions about his military service and any potential risks associated with his past deployments. However, with our guidance and support, he successfully navigated the underwriting process and secured the coverage he needed.

In the end, Bob’s story is a testament to the importance of proactive financial planning and the value of seeking expert advice. By taking the time to assess his needs and explore his options, he ensured that his family would be taken care of, no matter what the future holds.

What can you learn from Bob’s experience? Don’t wait until it’s too late to secure adequate insurance (life) coverage. Take action today to protect your family’s financial future. I believe that every veteran deserves access to the resources and support they need to make informed decisions about their insurance (life) needs.

Don’t make the same mistake Bob almost did. Talk to a qualified financial advisor who understands the unique needs of veterans. Get the peace of mind that comes with knowing your family is protected.

Many veterans also face challenges related to mental health. If you’re struggling, remember that seeking help is a sign of strength.

Understanding VA disability benefits can also be a critical part of overall financial planning.

For many veterans, maximizing tax benefits is another key component of a sound financial strategy.

The most important thing you can do today is take the first step. Research your options, talk to a professional, and secure the insurance (life) coverage that will protect your loved ones. It’s not just about money; it’s about peace of mind.