Insurance Issues for Military PersonnelMembers of the armed services can be deployed on short notice, leaving little time to address personal or business affairs, including insurance coverage. At this Web site, we offer:
Key points:
Life Insurance
Other InsuranceMilitary Consumer ContactsServicemembers' Group Life Insurance (SGLI)This low-cost group term life insurance is available to all service members on active duty, active duty for training or inactive duty for training and members of the Reserves. Servicemembers' pay a monthly premium for life insurance that is deducted from their pay. (The contribution by members on active duty and members of the Ready Reserve and National Guard, for example, is $28 monthly for $400,000 of coverage.) The policy is automatically activated for $400,000, the maximum possible coverage amount.. A service member can elect lower coverage or no coverage on VA Form SGLV-8286. Coverage is available for spouses; dependent children are automatically insured for $10,000. When released from active duty or the Reserve, members with full-time SGLI coverage can convert their coverage to Veterans' Group Life Insurance (VGLI) or to an individual commercial life insurance policy. Also, designated beneficiaries now receive an additional payment of $100,000 if a service member dies while on active duty. Learn more about these policies at: Who Needs Life Insurance and How Much?The need for life insurance varies depending on your age and responsibilities. It is important to remember that most military service members receive the $400,000 of life insurance unless they opt out. If you opted out of the SGLI plan or want more than $400,000 worth of life insurance, you may be asking how much insurance is necessary. Consider:
A life insurance needs calculation tool is available on the SGLI Web site: http://www.insurance.va.gov/sgliSite/calcuator/LifeIns101.htm. War ExclusionIf you buy life insurance outside of the SGLI/VGLI military-offered life insurance plans, review the list of exclusions (what's not covered). Many life insurance policies have a "war exclusion." This means benefits will not be paid if the death is a result of war or the action of a military force. In addition, many life insurance policies contain exclusions about traveling on any non-commercial aircraft or for other activities involving military service. The Servicemember's Group Life Insurance (SGLI) and Veterans Group Life Insurance (VGLI) policies do not have these types of exclusions. Basic Types of Life InsuranceThere are different types of life insurance. Some give coverage for your lifetime and others cover you for a specific number of years. Some build up cash values and others do not. Some policies combine different kinds of insurance, and others let you change from one kind of insurance to another. Some policies may offer other benefits while you are still living. There are two basic types of life insurance: term insurance and permanent insurance. Term InsuranceTerm insurance generally has lower premiums in the early years, but does not build up cash values. You may combine cash value life insurance with term insurance for the period of your greatest need for life insurance to replace income. Term insurance covers you for a term of one or more years. It pays a death benefit only if you die in that term. Term insurance generally offers the largest insurance protection for your premium dollar. It generally does not build up cash value. You can renew most term insurance policies for one or more terms, even if your health has changed. Each time you renew the policy for a new term, premiums may be higher. Ask what the premiums will be if you continue to renew the policy. Also ask if you will lose the right to renew the policy at some age. For a higher premium, some companies will give you the right to keep the policy in force for a guaranteed period at the same price each year. At the end of that time you may need to pass a physical examination to continue coverage, and premiums may increase. Term life insurance may be more desirable for people who are starting out, on a budget or have a fixed time period when their objectives call for life insurance. Permanent InsurancePermanent insurance (such as universal life, variable universal life and whole life) provides long-term financial protection. These policies include a death benefit and, in some cases, cash savings. Because of the savings element, premiums tend to be higher. Whole life plans have level premiums, meaning they do not increase as you age. These policies are designed and priced for you to keep over a long period of time. If you don't intend to keep the policy for the long term, it could be the wrong type of insurance for you. Whole life insurance policies develop "cash values". The cash value is one of the guarantee provisions of the policy. Whole life policies may be more desirable for people who need coverage for their entire life. Universal life and variable life policies may require extra premiums in the future to keep the policies in force. Tips for Buying Life Insurance
Life Insurance Deceptive Sales Practices and "Red Flags"
Homeowners' InsuranceWhat happens if your home is vacant? Many homeowners' policies have a "vacancy clause" you could trigger if gone for an extended period. In this event, some or all of your coverage may not apply in the event of a loss. The precise definition of vacancy can vary from policy to policy. Some policies, for example, might not pay claims if your house is unoccupied for 60 days or more. However, many companies offer an endorsement that will provide coverage for a dwelling that is unoccupied for an extended period of time. Consult with your insurance agent or company to learn how the company defines vacancy and whether it will pay claims if a house is unoccupied. Check your coverage. It is a good idea to review your homeowners' policy with your agent before you leave - it could help you avoid a dispute or disagreement in the future. Are your policy limits sufficient to cover your home and your personal property at today's costs? You may want to increase your coverage if you have made additions or improvements to your property. Homeowners' insurance typically covers personal property that you take while traveling, but most policies exclude coverage for damage caused directly or indirectly from war. Ask your agent whether personal items that you take with you during your deployment will be covered if they are lost, stolen, or damaged. The military generally will not pay to repair or replace property that is damaged or lost in military housing or in a war zone. If you rent out a home while serving, you'll need a landlord's dwelling fire and premises liability policy. Talk to your agent about coverage for your situation. Renters InsuranceIf you rent property and will not be doing so while you are traveling, you may want to discontinue your renters' coverage and ask about coverage for any personal property you plan to take with you. If you keep renters' insurance, your policy will typically pay to repair or replace personal property you take while traveling. However, most policies exclude coverage for damage caused directly or indirectly from war. Ask your agent or company whether your renters' policy will pay to repair or replace any property you take with you during your deployment. Storage InsuranceIf you place items in storage, check on the storage unit's coverage and talk to an agent. Homeowner or renters insurance might cover personal property at a storage unit but if you cancel these policies you may want to purchase storage insurance separately. Comparison shop. Auto Insurance
Health InsuranceActive duty personnel have coverage through the military, as do reservists and National Guard members after 30 consecutive days of active service. Many reservists and National Guard members, however, have health coverage for themselves and their families through an employer-sponsored health plan. Some may wish to continue that coverage, particularly for their dependents, during their active duty period. Talk with your benefits administrator at work to learn what will happen with your health coverage if you are called to active duty. While employers are not required to pay the cost of health coverage for you and your dependents while you are on active duty, some employers choose to continue benefits at their current level. If your employer does not continue paying the cost of your health coverage, you are entitled to continue the coverage at your own cost under federal law. The Uniformed Services Employment and Reemployment Rights Act (prohibiting discrimination against people because of military service) and the Consolidated Omnibus Budget Reconciliation Act (COBRA) both allow you to continue coverage for yourself and your dependents for up to 18 months. However, you must pay the full cost of the insurance plus 2 percent more for administrative costs. Some family members may continue coverage even if others don't. For example, your spouse and/or children could continue coverage even if you do not. You may have other insurance choices. For example, you may be able to buy a "portability plan" from the same insurer. This is not the same plan as you had through the employer but it is offered by the same insurer and covers pre-existing conditions as long as you apply within 63 days of losing employer coverage. Ask your employer's benefits administrator and/or the insurance company that offered your work insurance about your choices. You may also call the Insurance Division's insurance advocates at 1-888-877-4894. If your employer discontinues your health coverage and you return to the company directly after your military deployment, federal law requires that you be allowed to resume plan membership without any type of waiting period. Department of LaborFor more information about your rights to coverage under USERRA and COBRA,
contact the U.S. Department of Labor Employee Benefits Administration: 1-866-444-EBSA
(3272) Oregon Insurance DivisionIf you are confused about your dependents' health insurance choices or you worked for an employer with less than 20 employees, call the division's consumer insurance advocates: 503-947-7984 or toll-free at 1-888-877-4894. Military Consumer ContactsFederalU.S. Department of Veterans Affairs Benefits Better Business Bureau for Military Legal Assistance Web Sites
Military Sentinel OregonOregon Department of Veterans Affairs Oregon Military Department |
