Learn the basics of life insurance and find out if additional coverage is right for you and your family.
What is life insurance?
Like auto or health insurance, life insurance is a financial safety net. This important coverage can help cushion the strain on your loved ones in the event of your death.
While it may not be pleasant to think about, it’s important to consider what could happen to those who depend on you financially. What would their lives be like once you’re gone? Whether you’re an income generator, a caregiver, or both, life insurance can provide an important cash benefit to those you leave behind. This benefit can create future income for your loved ones as well as help offset immediate expenses and debt.
Term life versus permanent life insurance
There are two basic types of life insurance: term life and permanent life insurance. Term life insurance provides coverage for a set period of time – typically when a younger family’s financial needs are the greatest. Permanent life insurance effectively creates an immediate estate, since it’s designed to last as long as you do. There are several types of permanent life insurance, each with different levels of risk. Navy Mutual offers whole life insurance – the most predictable and conservative type. Whole life insurance builds tax-deferred cash value for you and your beneficiaries.
Term life insurance is there for your loved ones if you die.
Permanent life insurance is designed to be there for your loved ones when you die.
Do I need additional life insurance if my family already has SGLI?
While your life insurance needs are highly individualized, a basic formula for determining your minimum coverage needs is calculated as follows:
Financial Obligations – Assets = Insurance Needed
Financial obligations include your current debts and future income needs, plus any costs resulting from your death such as medical bills and funeral expenses. To help you determine how much life insurance you may need, try Navy Mutual’s Life Insurance Needs Calculator.
Your family will likely have different coverage needs throughout your life. For example, you may need a certain amount of life insurance when you’re younger and a different amount later in life as your family, assets, and liabilities grow. Keep in mind, defining your retirement and estate planning objectives now – at the youngest possible age – can substantially reduce the costs required to meet your goals throughout various stages of your life.
You or your spouse’s military or uniformed service means you may have additional coverage options as well, including:
- Servicemembers’ Group Life Insurance (SGLI)
- Veterans’ Group Life Insurance (VGLI)
- Other survivor benefits (you can learn more at the U.S. Department of Veteran Affairs website https://www.va.gov/)
If your family is currently covered by VGLI, SGLI and/or FSGLI add the benefit amount to your assets when calculating your family’s life insurance needs. To read more about SGLI, FSGLI, VGLI, and other types of life insurance check out Navy Mutual’s Life Insurance LookBook.
Ultimately life insurance provides peace of mind for you now and eases financial strains for your loved ones in the future. Depending on your family’s circumstances, term or whole life may be good supplemental life insurance options.