First Command Reports: Military Families Showing Strong Preference for Permanent Life Insurance

29 Sep 2016, 00:00 AM EDT

First Command Financial Behaviors Index® reveals that 67 percent of
middle-class service member households now own a permanent life policy

FORT WORTH, Texas–(BUSINESS WIRE)–Demand for permanent life insurance continues to grow in America’s
career military, where two thirds of families now report owning this
type of coverage and many others say they are likely to join them,
according to the latest findings of the First Command Financial
Behaviors Index®.

First Command’s annual life insurance survey reveals that 67 percent of
middle-class military families (commissioned officers and senior NCOs in
pay grades E-5 and above with household incomes of at least $50,000) own
some form of permanent life coverage. That’s up 25 points over the past
five years. And among military families who don’t own a permanent life
policy, 68 percent say they are likely to consider purchasing one for
themselves or someone in their household. This level of interest
represents a continuing upward trend, climbing from just 28 percent in
2011.

The most popular forms of permanent life insurance coverage among the
military include:

Whole life, which is owned by 42 percent of survey respondents. That’s
the same ownership level as the past two years. The Index reveals that
36 percent of those who own whole life policies purchased their
coverage in the past five years.
Universal life (24 percent, statistically unchanged from last year).
Variable life (18 percent, also statistically unchanged from last
year).

Meanwhile in the general population, demand remains steady. The Index
reveals that 40 percent of middle-class civilian families own some form
of permanent life coverage, statistically unchanged from five years ago.
The most popular form of permanent life insurance coverage in the
general population is whole life, which is owned by 27 percent of
families.

Service member demand for temporary life insurance coverage is also up
this year. About half of military families (46 percent) report owning
term life products, up 13 points from last year. But the long-term trend
remains constrained. Demand is about the same as five years ago.
Civilian ownership of term life products has fallen to 39 percent, down
nine points from last year. Demand is also about the same as five years
ago.

Military families are turning to permanent insurance 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. Supplemental commercial
policies allow military families to increase their overall coverage now
and provide longer-term protection for their post-military lives.

“Supplementing government-provided coverage with permanent life
insurance allows America’s career military families to more fully and
effectively tackle their present and future needs,” said Scott Spiker,
CEO of First Command Financial Services, Inc. “This strategy of
combining government benefits with commercial products allows families
to address the uncertainties of military life today and effectively
pursue financial security tomorrow.”

First Command conducts an annual life insurance survey of military
families 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 the 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. http://www.firstcommand.com/fbi/

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.

First Command Financial Services, Inc., is the parent of First
Command Financial Planning, Inc. (Member SIPC,
FINRA),
First Command Advisory Services, Inc., First Command Insurance Services,
Inc. and First Command Bank. Financial planning services and investment
products, including securities, are offered by First Command Financial
Planning, Inc. , a broker-dealer. Financial planning and investment
advisory services are offered by First Command Advisory Services, Inc.,
an investment adviser. Insurance products and services are offered
by First Command Insurance Services, Inc., in all states except Montana,
where as required by law, insurance products and services are offered by
First Command Financial Services, Inc. (a separate Montana domestic
corporation). Banking products and services are offered by First Command
Bank. In certain states, as required by law, First Command Insurance
Services, Inc. does business as a separate domestic corporation.
Securities products are not FDIC insured, have no bank guarantee and may
lose value. A financial plan, by itself, cannot assure that retirement
or other financial goals will be met. First Command Financial
Services, Inc. and its related entities are not affiliated with,
authorized to sell or represent on behalf of or otherwise endorsed by
any federal employee benefits programs referenced, by the U.S.
government, or the U.S. armed forces.