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Life Lessons of a Military Wife (overseas in Europe!): Life Insurance Woes

Life Lessons of a Military Wife (overseas in Europe!)

My goal here is to make your life easier, especially those who are in the unique situation of being a military spouse. Yes...I've been around...but in a good way...and hopefully can share those tips, tricks and shortcuts with you too. I've been on this military bus for over 40 years now. My goals in life are to have a well-run home, few money worries, well adjusted children, money socked away and whatever happiness I can scoop out of life.

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After life as an Army brat, being in the Army myself and marrying a soldier, I can honestly say I have a bucket full of life lessons I can share to help you make your everyday life easier and enlightening. Don't waste your time making unnecessary mistakes and benefit from others who have come before you on your journey through life.

Thursday, July 5, 2007

Life Insurance Woes

I know, I know...nobody wants to talk about dying, and frankly, we all hope we die later rather than sooner! But, let me talk to you about something called "peace of mind". "Peace of mind" is knowing that even if something terrible happens, you are covered as good as it's gonna get on the face of this earth anyway. So, let's talk life insurance.

If you are in the military, you already know about Servicemembers' Group Life Insurance (SGLI). So for about $400,000 worth of life insurance, the military will automatically deduct about $29 from your husband's paycheck. This is of course the maximum amount of insurance you are allowed to take out through SGLI. You might think that this is enough and it sure sounds like a huge amount! are some things you need to think about.

Not only will you be paying for a funeral and all the associated expenses, but consider some of the following costs and debts you might still have should the inevitable happen, such as: a mortgage, car payments, four years' college for the little ones, credit card debt, medical bills and not to mention the heartache and grief that comes after the loss of a loved won't want to get right back to work, struggle to make ends meet and make possible bad financial decisions. To get an idea of what your needs might be, try this handy financial calculator. You'll quickly see that there are a lot of things that you might not have thought about. The ideal situation would be to live off your earnings from your life insurance policies after you invest them responsibly (rather than going through all that money, month by month until there is nothing left).

So, here I was with these ideas mulling around in my head...I hated thinking about these things, but I also wanted to make sure I didn't have to make any rash decisions should I find myself in such a situation, plus I wanted to make sure our little boys were cared for. I quickly grabbed the phone and called the company I have our car insurance through, USAA. I thought for sure that they would be able to help me. Most of their financial products are "military friendly", and I was already patting myself on the back for a job well done. Well, I was shocked to hear that because of my husband's high risk Army specialty, a modest life insurance policy for him would cost....over $200 a month! I think I dropped the phone at that point.

I tell you...I was in a funk and wondered what in the world I was going to do next. I got on the internet the next day and started googling life insurance. I had a few more companies contact me, but many had clauses where they wouldn't pay out under wartime circumstances or anything that wasn't "normal"...well, that ruled all us military folks out. After a few days, I finally stumbled upon The Army and Air Force Mutual Aid Association (AAFMA) I emailed them, and they got back to me right away.

After answering a few simple health questions about my husband, they gave me a quote. For example, for $600,000 worth of life insurance, the cost would only be $27 a month! I couldn't believe my ears at this point! Of course we wanted to sign up right away, and after my husband filled out a health survey, we were insured. It was as simple as that. That was three years ago. AAFMA is my recommendation today. Give them a call and don't delay.

Along those lines, be sure that the non-working or non-military spouse also has some life insurance. You can do these cheaply and quickly through SGLI as well. Many a soldier has been rudely awakened, finding out how much work their wife does at home and with the children, and you want your hubby to have some money to use in such a case too. Also, even though our military healthcare system is fairly good in most cases (and woefully inadequate too I might add at times), it may be wise to research disability insurance, especially for some of the lower enlisted ranks and those who have not been in the military long enough to qualify for a good "enough to live on" pension. A good topic for a later date!

If you yourself have any comments or experiences to add to this topic, please take the time to share.

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Anonymous Anonymous said...

I was sure when I saw your comment on your post today (3/31/08) that you'd be pointing to USAA. I was pleasantly surprised to see that you recommended AAFMAA!

We have had USAA for years but when we went to them to increase my husband's policy, we too were quoted an insane amount! It seems being special operations warrants a cost that is reminiscent of a whole life policy. Our actual situation was that we were quoted $73 and literally two hours later were called back and quoted $433/mo!

I called AAFMAA right after I hung up with USAA. We still have my term policy with USAA just because it was already in place and didn't cost any more than AAFMAA's policy.

We have been nothing but thrilled with the service from AAFMAA! I highly recommend there service as well!

April 1, 2008 at 12:52 AM  
Anonymous Anonymous said...

Hi! Just wanted to say thanks for this review. We are taking out a couple of extra policies before my husband gets deployed. We have two kids together and he has two kids from a previous marriage, plus his parents depend on us. It's very important to us to get the right insurance just in case, even though I could go back to work if necessary. I really appreciate the review from someone. We're in Germany, too. Cheers!

September 4, 2010 at 11:34 AM  
Blogger ****Veteran Military Wife at Life Lessons of a Military Wife**** said...

Glad you got some peace of mind then! Enjoy your Germany tour and don't wait too long to start going out and exploring:-)

September 4, 2010 at 10:38 PM  
Anonymous Jhon smith said...

really good information...

September 16, 2010 at 2:25 PM  
Anonymous Jhon smith said...

really happy to get thids information..

September 16, 2010 at 2:42 PM  
Anonymous Jhon smith said...

hey thanks..
it solves many of my doubts about insurance...

September 16, 2010 at 4:04 PM  
Blogger HyunChard said...

Yes it's very true that this sounds silly. It seems you sell your life just for money. But the question is that is your family stable in financial matters? What if you'll die soon leaving your family? That's the purpose of life insurance, to insure not your self but for the lives of the people depending on you.

December 15, 2010 at 10:48 AM  
Anonymous Capt M said...

I just retired as a captain in the Air Force, and went thru the process of getting approved quotes from USAA and AAFMAA. AAFMAA was much cheaper, and also covered any accidents that might involve general aviation (as I hold a private pilot's license). For an $800K, 30 year term life policy, AAFMAA costs $148/month...and the best USAA could offer me was $214/month...even after I gave them the opportunity to match AAFMAA's rate.

March 23, 2011 at 5:25 PM  
Anonymous Anonymous said...

I don't normally blog or share my experience. I was googling the web looking for customer feedback on AAFMAA (so I can decide if I want to buy my life insurance with them), and came to this site.
I am 46 years and got a 30 years $300,000policy a year ago from USAA for $176 a month(I was a rush'ed event as I was trying to get the cheaper rate prior to making 45 years old... I only went to one quote, as I trusted USAA with their service and low premium)
I asked for a change this year (now that I am 46) for a 25 years policy with same coverage, and was quoted $172. So I decided to shop around. AAFMAA gave me a quote for $99.20 for 25 years (same $300,000 coverage).

USAA is a great company for car insurance, I can't get AIG, All State, or another company to match the coverage and cost, But for some reason, their homeowners policy and life insurance just did not fare as well.

By the way, I looked into VGLI and the $400,000 in my age bracket is $88 per month. AAFMAA quoted me $51 per month. I know rate will go up as I move up the age group... but for now, you know who I am going to make the checks to.

May 28, 2011 at 7:36 AM  
Blogger jfrancescapam said...

Life insurance woes are truly very real for people especially for soldiers. Too often people forget about it and are not prepared once they face the inevitable fact of death. Hopefully, people find good insurance partners to guide them.

Insurance Singapore

June 2, 2011 at 4:34 AM  
Anonymous Anonymous said...

It is so true of what you said. There are so many things in life that people don't think about till later. That's why I got Life Insurance, before my son got shipped off.

June 22, 2011 at 7:14 PM  
Anonymous DeRon Johnson said...

I'm suprised that the same thing applies over three years later, but USAA policies are over priced for life insurance. I have over $500K of rental property and would like my wife to be able to be comfortable if something should happen to me. I'm getting quoted a difference of $70 and for $300 less. Plus AAFMA can process the policy in a week where USAA will take 4-6 weeks. First time I've ever seen USAA have an inferior product.

July 6, 2011 at 3:40 AM  
Anonymous Anonymous said...

I must say "ditto" to all the AAFMAA vs. USAA comments with regard to life insurance. I started the shopping around about 7 years ago and USAA told me they wouldn't consider giving me $500K in life insurance because I didn't command a huge salary like a medical doctor (I'm serious, really). I somehow stumbled upon AAFMAA and was very pleasantly surprised by how competive they were. USAA called back a year or so ago and asked if I was interested in life insurance. I told them about the call I had with them 6 years earlier and they said things had changed...but they still couldn't compete. I'm also starting to sense that USAA is no longer the most competitive with regard to rental property insurance, but need to do more homework.

August 4, 2011 at 10:16 AM  

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