First Command Reports: Demand Stays Strong for Permanent Life Insurance in Military

Demand is staying strong for permanent life insurance in career military families, according to the latest findings of the First Command Financial Behaviors Index®.

First Command's 11th annual life insurance survey reveals that 80 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. And 65 percent of those without permanent life coverage say they are likely to consider buying a policy for themselves or someone in their household.

“Military families continue to show strong interest in the benefits of permanent life insurance,” said First Command President/CEO Mark Steffe. “Since our first life insurance survey in 2011, demand has been on a long-term, upward trend. Back then just 42 percent of military respondents reported owning some form of permanent coverage and 28 percent said they were likely to purchase. Over the past decade demand has continued to grow because military families recognize this is the right type of insurance to meet their unique needs."

Permanent life insurance is highly valued for the lifetime protection it provides. Military families are using it to cover permanent needs, like final expenses or income for a spouse and children in the event of premature death.

The most popular type of permanent life insurance among the military is whole life, which is owned by 48 percent of survey respondents. Less common types of permanent coverage include universal life and variable life, which have ownership rates of 40 percent and 25 percent, respectively.

Demand for permanent life insurance is notably lower in the general population. The Index reveals that 48 percent of middle-class civilian families own some form of permanent coverage. The most popular product is whole life, which is owned by 34 percent of families. Ownership rates are 16 percent for universal life and 11 percent for variable life.

Ownership rates for term life insurance products are 42 percent in military families and 30 percent in the general population.

“Term life insurance is a cost-effective option, but it lacks the lifetime protection of permanent life insurance and therefore has a more limited use," Steffe said. “Because these products provide coverage for a set number of years, they are best used to cover temporary needs, like paying for a child’s college tuition or making mortgage payments.”

Military families are buying commercial insurance products to beef up 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.

“Permanent life insurance is a flexible and valuable product,” Steffe said. “We continue to see strong demand because this product allows career military families to more effectively and confidently strengthen their family’s financial security.”

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. For more details on our research, please email [email protected]. 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 Brokerage Services, First Command Advisory Services and First Command Bank, coach our Nation’s military families in their pursuit of financial security. Since 1958, First Command Financial Advisors have been shaping positive financial behaviors through face-to-face coaching with hundreds of thousands of client families.

©2021 First Command Financial Services, Inc. is the parent company of First Command Brokerage Services, Inc. (Member SIPC, FINRA), First Command Advisory Services, Inc., First Command Insurance Services, Inc. and First Command Bank. Securities products and brokerage services are provided by First Command Brokerage Services, Inc., a broker-dealer. Financial planning and investment advisory services are provided by First Command Advisory Services, Inc., an investment adviser. Insurance products and services are provided by First Command Insurance Services, Inc. Banking products and services are provided by First Command Bank (Member FDIC). Securities 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.

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