First Command News & Media

FOR IMMEDIATE RELEASE — October 23, 2014

Demand for Permanent Life Insurance Growing in Career Military Families, First Command Reports

First Command Financial Behavior Index® reveals that two thirds of servicemember households now own a permanent life policy

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FORT WORTH, Texas — Demand for permanent life insurance is growing in America’s career military, where almost seven in ten families now own this type of coverage, according to the latest findings of the First Command Financial Behaviors Index®.

First Command's annual life insurance survey reveals that 68 percent of middle-class military families (senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) own some form of permanent life coverage. That’s up 20 points from last year. In 2011, just 42 percent of families reported owning some form of permanent life insurance.

And the numbers are expected to keep rising. The Index reveals that 53 percent of military families who don't own a permanent life policy say they are likely to consider purchasing it for themselves or someone in their household. This level of interest represents a continuing upward trend, climbing 7 points from last year and 25 points over the past three years.

The most popular forms of permanent life insurance coverage among the military include:

  • Whole life, which is owned by 42 percent of survey respondents. That’s up 10 points from last year. The Index reveals that 34 percent of those who own whole life policies purchased their coverage in the past five years.
  • Universal life (24 percent, up 9 points).
  • Variable life (12 percent, up 6 points).

In contrast, the general population is experiencing a more muted demand trend for permanent life insurance. The Index reveals that 44 percent of middle-class civilian families own some form of permanent life coverage. That’s up just 7 points from 2011. The most popular form of permanent life insurance coverage in the general population is whole life, which is owned by 32 percent of families. That’s up just 6 points from 2011.

Notably, demand for temporary life insurance coverage has remained steady in recent years for both populations. Ownership of term life products is 52 percent in the military and 42 percent among civilians. In both cases, the rate of ownership is virtually unchanged from last year and up just 3 points from 2011.

Military families are turning to 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.

“Buying extra coverage outside of the government benefit allows servicemembers and their families to build a more flexible risk management program, one that meets both current and future needs,” said Scott Spiker, CEO of First Command Financial Services, Inc. “Permanent life insurance allows families to address the current uncertainties of military service – uncertainties that can include the risk of war-related death – as well as prepare for the future realities of life after the end of military service. This is particularly important in the current environment of the deep military budget cuts of defense downsizing and sequestration. Building a strong risk management program is an important action that career military families can take now in their pursuit of long-term financial security.”

About 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. Financial Behaviors Index

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 Bank and First Command Financial Planning, assist American families in their efforts to build wealth, reduce debt and pursue their lifetime financial goals and dreams—focusing on consumer behavior as the first and most powerful determinant of results. Through knowledgeable advice and coaching of the financial behaviors conducive to success, First Command Financial Advisors have built trustworthy, lasting relationships with hundreds of thousands of client families since 1958.


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