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First Command Reports: Military families showing strong preference for permanent life insurance

First Command Financial Behaviors Index® reveals that 67 percent of middle-class service member households now own a permanent life policy

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FORT WORTH, Texas – Demand for permanent life insurance continues to grow in America’s career military, where two thirds of families now report owning this type of coverage and many others say they are likely to join them, according to the latest findings of the First Command Financial Behaviors Index®.

First Command's annual life insurance survey reveals that 67 percent of middle-class military families (commissioned officers and senior NCOs in pay grades E—5 and above with household incomes of at least $50,000) own some form of permanent life coverage. That’s up 25 points over the past five years. And among military families who don't own a permanent life policy, 68 percent say they are likely to consider purchasing one for themselves or someone in their household. This level of interest represents a continuing upward trend, climbing from just 28 percent in 2011.

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 the past two years. The Index reveals that 36 percent of those who own whole life policies purchased their coverage in the past five years.
  • Universal life (24 percent, statistically unchanged from last year).
  • Variable life (18 percent, also statistically unchanged from last year).

Meanwhile in the general population, demand remains steady. The Index reveals that 40 percent of middle-class civilian families own some form of permanent life coverage, statistically unchanged from five years ago. The most popular form of permanent life insurance coverage in the general population is whole life, which is owned by 27 percent of families.

Service member demand for temporary life insurance coverage is also up this year. About half of military families (46 percent) report owning term life products, up 13 points from last year. But the long-term trend remains constrained. Demand is about the same as five years ago. Civilian ownership of term life products has fallen to 39 percent, down nine points from last year. Demand is also about the same as five years ago.

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.

“Supplementing government-provided coverage with permanent life insurance allows America’s career military families to more fully and effectively tackle their present and future needs,” said Scott Spiker, CEO of First Command Financial Services, Inc. “This strategy of combining government benefits with commercial products allows families to address the uncertainties of military life today and effectively pursue financial security tomorrow.”

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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