exNavyOffRec
Well-Known Member
no no no, still get SGLI, you can't beat the payout for what you pay in, but it is term, if you don't die no one gets a benefit.
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Life insurance
- Thread starter utswimmer37
- Start date
no no no, still get SGLI, you can't beat the payout for what you pay in, but it is term, if you don't die no one gets a benefit.
so if I go I'll go big...thanks again for your help everyone
I'll have a lot of reading to do but I think I finally get the gist of it
navy2014
Member
Weird question that I wouldn't have thought to ask if I hadn't seen this thread--
At MEPS, I was sent back to a civilian office cubicle area to get my fingerprints taken, and she also got information about who I would like as my life insurance beneficiary. The things she said implied that as of the day I went to MEPS, I now had a small amount of life insurance. Made sense at the time, but now I'm just like... what? Why would they give me life insurance because I went to MEPS? I have no idea where to access information about this policy or any reason to be worried about it or want to rely on it... just curious.
At MEPS, I was sent back to a civilian office cubicle area to get my fingerprints taken, and she also got information about who I would like as my life insurance beneficiary. The things she said implied that as of the day I went to MEPS, I now had a small amount of life insurance. Made sense at the time, but now I'm just like... what? Why would they give me life insurance because I went to MEPS? I have no idea where to access information about this policy or any reason to be worried about it or want to rely on it... just curious.
I wouldn't worry about it for now. They'll talk about it at OCS (one of many briefs to look forward to), and you can change coverage amounts, beneficiaries, etc at that time as well. Not sure if you are already covered, or if it kicks in when you check in at OCS, or when you sign your papers with the OR, but it shouldn't matter for the time being unless you need to change your beneficiary, in which case you'd probably need to ask your OR for help.
As for term life vs. whole life insurance policies, whole life is good if you can get a relatively good rate. Essentially what you're doing is paying cash into a policy, it grows at a certain rate, and later on you can cash it in. It's usually better than sticking it in a savings account or the mattress, but is not as accessible (or "liquid"). People usually use it for end-of-life expenses, such as to help pay for a funeral, since it never expires, so they'll get like $10k of whole life coverage to supplement a term life plan. Some people also use it for investment purposes and the like.
Term is basically you making a bet that you'll die in the next twenty years (or however long the term is). If you're wrong, no payout. But it's more common than whole life, because payments are much smaller for similar coverage amounts. This is also popular when someone has a lot of debt (mortgage, car loan, etc.) and/or dependents; that way, the significant other and kids don't have to worry about mortgage payments, etc on top of the loss of their loved one.
Like people have said, SGLI is a no brainer, because it's $26-ish dollars per month for $400,000 of coverage with no war clause. I have no debt and no dependents, and I still got the policy, in case I have more of both down the road. You can also start at lower coverage and increase it later on as your situation changes.
good stuff, thanks for the info. Whole life is less volatile than personal investing but if my work related threat arena decreases dramatically after 20 years in service then I think term would suit just fine. I'm pretty well set up with a growing mutual fund portfolio that could potentially outperform and be worth a whole lot more than a life insurance policy, and cost me less. There is a tax advantage to a life insurance policy but I would also like to think I have planned my estate transfers well in advance but you never know. I'm not buried in debt and my better half is pretty well off financially so the only reason I would need it would be to float expenses until she puts me in the ground. I'll definitely look at the term options less than 400k but it's so cheap that why not just go with the full boat. Thanks again everyone.
link on life insurance questions:
General Info - http://www.ameriprise.com/budgeting-investing/tax-center/tax-savings-tax-tips/taxation-of-life-insurance.asp
Taxation - http://www.irs.gov/Help-&-Resources...ife-Insurance-&-Disability-Insurance-Proceeds
Types of Life Insurance - http://www.bargaineering.com/articles/4-types-of-life-insurance-term-whole-universal-variable.html
This. And to add insult to injury, if you get diagnosed with something bad, you may get npq'd and separated from the navy and be left with a lot of nothing, unless (if I have my facts right) you get lucky and are medically retired.
Wouldn't disability kick in or do you usually get a scarlet letter from the navy and get kicked to the curb?
Spekkio
He bowls overhand.
It depends on what you mean by 'really bad.' I know two servicemembers who became terminally ill. One found it so late that he died within 3 months, not even enough time for him to medically retire. The other medically retired and passed away two years later. So no, the Navy doesn't just 'kick you to the curb' if something like that happens. In both cases SGLI paid out.
good to know, thank you
Very much situation dependent. Some folks will go limdu (limited duty) until either they get better or go through a med board process and then retire. If you can still perform your duties and find orders to remain, staying in until retirement is possible (depending on when in your career you are diagnosed). I will say when I asked my case manager at the hospital about what benefits my wife would get if the worst actually happened, she said "the best thing you could do is die while on active duty". Once you retire (at 20 or medically), your SGLI has to convert to VGLI (which comes at added cost) and other benefits go away. Disability (if warranted) will also kick in upon retirement.
Two separate issues. Obviously, life insurance doesn't pay out until you're dead, and the purpose of that is to ensure financial stability for those who rely on your income. The other aspect that UT and P3FO mention is disability insurance, or what happens to you and yours if you are no longer able to do your job. If you have a high income job, or you're the sole wage earner, you might want to think about disability insurance as well. The Navy's disability system is basically your "disability insurance" while you're AD.
The Navy's disability system (aka the "PEB") is designed to compensate you for the premature termination of your Navy career. Their options consist of basically returning you to full duty, separation with severance pay, or medical retirement. A return to full duty may or may not be a good thing, depending on what is wrong with you. If you medical condition renders you non-deployable, or otherwise somehow non-competitive for promotion, you may then be at risk for administrative separation. Not everyone who is found fit for full duty will be admin separated; it depends a lot on where you are in your career and what's wrong with you A non-deployable O-5 is a different personnel problem than a non-deployable O-2. Administrative separation confers no benefits after discharge...no income, health insurance, etc.
Separation with severance is just that...out of the Navy with a lump sum check based on your rank and years of service. The VA may provide some disability payments in that scenario.
Finally, medical retirement means that you are treated just like a length-of-service retiree, but that you left the Navy prior to length-of-service due to medical reasons. You get a retirement check, an ID card, and can hit up the VA for additional payments. Best deal overall if you have something bad, is to be medically retired. If you manage to make it to 20, and get medically retired at that point, the rules now allow for concurrent receipt of both Navy retirement pay and VA disability pay, rather than the dollar-for-dollar offset. VA disability pay is tax exempt.
R/
The Navy's disability system (aka the "PEB") is designed to compensate you for the premature termination of your Navy career. Their options consist of basically returning you to full duty, separation with severance pay, or medical retirement. A return to full duty may or may not be a good thing, depending on what is wrong with you. If you medical condition renders you non-deployable, or otherwise somehow non-competitive for promotion, you may then be at risk for administrative separation. Not everyone who is found fit for full duty will be admin separated; it depends a lot on where you are in your career and what's wrong with you A non-deployable O-5 is a different personnel problem than a non-deployable O-2. Administrative separation confers no benefits after discharge...no income, health insurance, etc.
Separation with severance is just that...out of the Navy with a lump sum check based on your rank and years of service. The VA may provide some disability payments in that scenario.
Finally, medical retirement means that you are treated just like a length-of-service retiree, but that you left the Navy prior to length-of-service due to medical reasons. You get a retirement check, an ID card, and can hit up the VA for additional payments. Best deal overall if you have something bad, is to be medically retired. If you manage to make it to 20, and get medically retired at that point, the rules now allow for concurrent receipt of both Navy retirement pay and VA disability pay, rather than the dollar-for-dollar offset. VA disability pay is tax exempt.
R/
exNavyOffRec
Well-Known Member
It looks like my numbers were correct, and mine is more considered Universal Life, but I pay basically 250/month for 30 years and if I am still alive at that time I can cash it out and get 150K, of course 150K 30 years from now will not buy what 150K will buy now.
If I should kick the bucket before I can cash out my beneficiaries will get 500K.
In a way I think of it as a long term sayings.
I wish I would have started it earlier, but look around, find the best thing that fits you at a level that will allow your family to continue on without being burdened with financial issues.
If I should kick the bucket before I can cash out my beneficiaries will get 500K.
In a way I think of it as a long term sayings.
I wish I would have started it earlier, but look around, find the best thing that fits you at a level that will allow your family to continue on without being burdened with financial issues.
Spekkio
He bowls overhand.
The spouse can continue to collect medical retirement pay and benefits after the service member passes away, so I'm not quite sure that the doctor is correct from a financial perspective.
That's true if you elect the survivor benefit plan, but there are some other benefits not given once you retire. For example a surviving AD spouse can continue to collect BAH for one year after the death of the servicemember and there is also a 100K instant death gratuity that a retired member does not get.
Not from the doctor, but a civilian case manager who just deals with helping people through the process of the medical system and acts as an advocate dealing with Tricare, finding treatment at other facilties etc.