SGLI (Servicemembers’ Group Life Insurance) is paid to surviving beneficiaries of deceased active duty military personnel. How much SGLI coverage do you need to take out for your family in the unlikely event of your death?
How Much is Available?
Before you decide on SGLI coverage options, you should do some research on what is actually available. SGLI coverage is available in $50,000 increments. The maximum amount of SGLI coverage is for $400,000.
SGLI Premium Rates
Due to the reduction in SGLI premium rates (since 1 July 2008), down from 7 cents per $1,000 to 6.5 cents for every $1,000 of SGLI coverage, rates are now even more affordable. If you opt for the lowest SGLI coverage of $50,000, premiums will total $4.25 each month or $27 per month if you opt for the maximum $400,000 coverage option for your surviving family members.
In addition to the basic SGLI premium rate, an additional $1 is added each month for Traumatic Injury Protection (TSGLI). Whichever option you choose, TSGLI will be automatically added to your monthly SGLI premiums.
What Are Your Liabilities?
Choose an SGLI coverage plan that will help your surviving beneficiaries clear any outstanding debt that is in your name, as well as collective family debt. Make a list of all your liabilities (i.e. the mortgage, credit cards, student loans, and car payments) and then add up the total amount. You may be surprised to learn of just how high your liabilities are.
Base your decision on what you can reasonably afford to pay each month for SGLI as well as how easily your beneficiaries will be able to clear any outstanding debt in the event of your death. Consider this, if you were to die next week, will your spouse be able to clear your debt, and still have some money left over to live on for a while?
The amount of SGLI coverage you opt for will depend on several factors. Choose from $50,000 up to $400,000 SGLI coverage for your beneficiaries. Premium rates also include a compulsory TSGLI charge that is automatically included in monthly premiums. Then factor in your total liabilities before you choose how much SGLI coverage is necessary. You should consider getting life insurance under 50 so that all these factors remain minimal. This way you save yourself money as well.