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First Command Reports: Demand for Permanent Life Insurance Hits Record High in Military Families

The First Command Financial Behaviors Index® reveals that 75 percent of middle-class servicemember households now own a permanent life policy

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FORT WORTH, Texas — Demand for permanent life insurance has reached a new high in America's career military, where three out of four families now report owning 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 75 percent of middle‐class military families (commissioned officers and senior NCOs 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 7 points from last year. In 2011, just 42 percent of families reported owning some form of permanent life insurance.

And the demand is expected to keep growing. The Index reveals that 44 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 16 points over the past four 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 the same ownership level as last year. The Index reveals that 37 percent of those who own whole life policies purchased their coverage in the past five years.
  • Universal life (22 percent, statistically unchanged from last year).
  • Variable life (20 percent, up 8 points).

Demand remains steady in the general population. The Index reveals that 41 percent of middle-class civilian families own some form of permanent life coverage, statistically unchanged from last year and up just 4 points from 2011. The most popular form of permanent life insurance coverage in the general population is whole life, which is owned by 27 percent of families.

At the same time, demand for temporary life insurance coverage has dropped to a new low for military families and reached a record high in the general population. Ownership of term life products has fallen to 33 percent in the military, down 19 points from last year. Almost half of civilian families (48 percent) report owning term life, up six points from last year.

Military families are focused on 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.

"Adding permanent life insurance to government-provided coverage allows servicemembers and their families to more fully and effectively address their present and future needs," said Scott Spiker, CEO of First Command Financial Services, Inc. "This add-on strategy allows families to focus on the current uncertainties of military life — uncertainties that can include the risk of a combat death — as well as pursue long-term financial security."

First Command conducts an annual life insurance survey of military families as part of its September observance of Life Insurance Awareness Month, which was created by the LIFE Foundation in response to growing concern about the large number of Americans who lack adequate life insurance protection.

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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