First Command News & Events

FOR IMMEDIATE RELEASE - September 11, 2013

Middle Class Americans Grow Increasingly Likely To Buy Permanent Life Insurance, First Command Reports

First Command Financial Behaviors Index® reveals that almost half of middle-class servicemembers and civilians who don’t own a permanent life policy say they are now likely to consider a purchase.

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FORT WORTH, Texas — Permanent life insurance is growing in popularity among both military and general population households, with almost half of those who don't own this type of coverage now saying they are likely to consider adding it to their financial toolbox.

The latest survey results from the First Command Financial Behaviors Index® reveal that 46 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) 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 significant upward trend, climbing from 32 percent in 2012 and 28 percent in 2011.

A similar pattern has emerged in the general population, with 42 percent of middle-income respondents who don't own a permanent life policy saying they are likely to buy. This compares to 18 percent in 2012 and 20 percent in 2011.

“These findings indicate a growing interest in permanent life coverage as a time-tested tool for managing long-term financial risk,” said Scott Spiker, CEO of First Command Financial Services, Inc. “The old pitch to ̳buy term and invest the difference‘ lost some of its appeal during the economic turmoil, when many consumers experienced how a market downturn can threaten a seemingly sound financial strategy.”

The trend is particularly significant for men and women in uniform, who are already much more likely to own permanent life insurance products than their civilian counterparts. The Index reveals that permanent life insurance products are currently owned by 48 percent of military respondents compared to just 33 percent of the general population households.

The most popular form of permanent life insurance coverage among the military is whole life insurance. These products are owned by 32 percent of survey respondents. Second in popularity is universal life, which is owned by 15 percent of respondents.

Military families are turning to these commercial 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.

“So many military families, if they are insurable, opt for supplemental commercial policies in order to increase their overall coverage now and provide longer-termprotection for their post-military lives,” Spiker said. “This extra coverage allows them to build a risk management program that more thoroughly addresses the unique risks of military service — risks that can include war — related death. At First Command we see that risk firsthand. Since Sept. 11, 2001, almost 200 of our clients have died in combat. Out of this group 86 percent had life insurance products in force through First Command totaling more than $18.8 million.”

First Command surveyed consumers on their life insurance coverage 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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