Military service members have unique life, home and auto insurance needs
By Marcus Pickett
Service members can receive deployment notices that leave little time to get their affairs in order. Because they are constantly on the move, away from home and often separated from their families, those in the military can have complicated insurance needs.
The most common type of life insurance for members of the military is Servicemembers' Group Life Insurance (SGLI), which is automatically available to all active-duty service members, reservists and National Guard members.
According to the National Association of Insurance Commissioners, the maximum coverage allowed for this type of policy is $400,000 for the service member (including an additional $100,000 if the death occurs while on active duty). There's also elective life insurance coverage for spouses, up to $100,000, according to the U.S. Department of Veterans Affairs. Another benefit of this policy is that it can be automatically transferred to Veterans' Group Life Insurance (VGLI) when the service member is released from active duty.
There are, however, limitations to SGLI that might prompt some service members to seek alternate or additional life insurance coverage. A family may want higher death benefits, especially for the spouse, because $100,000 may not be enough to cover child care expenses associated with single-parent households. Even $400,000 may not be sufficient for a large number of dependents.
When buying additional life insurance coverage, it's imperative to examine the policy's exclusions. Many life insurance policies have what are called war exclusions, which deny benefits when the death results from war or military force.
Service members who leave their homes vacant during deployment may need to update their home insurance policies. In many cases, service members will have to pay higher premiums to cover vacant homes, as these properties are at greater risk for theft and vandalism. According to the National Association of Insurance Commissioners, the definition of vacancy can vary, depending on the insurer. For example, some standard home insurance policies may not pay claims if your home is vacant at least 60 days.
Intermittent house-sitting services may mitigate this circumstance somewhat, but policy modifications often are still necessary. Having someone regularly check on your home might result in a lower premium, but a homeowner should expect to pay 50 percent or 60 percent more for a vacant home insurance policy, according to the Insurance Information Institute.
Service members seemingly have little need for auto insurance during their deployment, but letting coverage expire may have unintended consequences. Discounts you were getting from continuous coverage and a good driving record may be forfeited. It may be possible to temporarily suspend your auto insurance coverage for the length of your deployment, although not all states and insurance companies allow for this option, according to the National Association of Insurance Commissioners. The association recommends asking whether parts of your coverage (like comprehensive and collision coverage) can be temporarily suspended.
Some insurers offer auto insurance discounts to members of the military. GEICO, for example, offers a 15 percent premium discount whether you're on active duty, retired from the military or a member of the National Guard or Reserves. Meanwhile, USAA offers financial products tailored to members of the military and their families. Although some of its products are available to the general population, its auto insurance coverage is available only to service members, their spouses and veterans.
If you don't have time to take all the necessary insurance steps, it may be possible to assign power of attorney to a trusted friend or family member who can handle your insurance needs during deployment. According to the National Association of Insurance Commissioners, both parties must sign a form in the presence of a notary public.
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