First Command Reports: Demand for Permanent Life Insurance Rising in Military Families

Demand for permanent life insurance is on the rise in America’s career
military, where the majority of families either already own or are
currently thinking about buying this type of coverage, according to the
First Command Financial Behaviors Index®.

First Command's eighth annual life insurance survey reveals that 73
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 70 percent
of those without permanent life coverage say they are likely to consider
buying a policy for themselves or someone in their household. That’s up
21 points from the previous year and represents a record high for the
annual survey.

Demand for permanent life insurance among military families has been on
a continuing upward trend. In 2011, just 42 percent of respondents
reported owning some form of permanent life insurance and 28 percent
said they were likely to purchase.

Interest in permanent life insurance is considerably stronger in
military families than in the general population. The Index reveals that
just 42 percent of civilian families own some type of permanent
coverage. Among non-owners, 45 percent say they are likely to consider
purchasing a permanent life insurance product.

Whole life is the most popular form of permanent life insurance
coverage. It is owned by 46 percent of military respondents versus 30
percent of their civilian counterparts. Less common types of permanent
coverage include universal life (owned by 22 percent of military
families versus 10 percent of the general population) and variable life
(15 percent versus 5 percent).

Demand for term life insurance products is about the same in both
groups. The Index reveals ownership rates of 43 percent in military
families and 41 percent in the general population. And demand is
relatively steady. Ownership rates are statistically unchanged from the
previous year.

Military families buy 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,” said Scott Spiker, chairman/CEO of First Command.
“By adding permanent life insurance to their government-provided
coverage, career military families seek to more fully and effectively
confront their present and future needs. They can address the current
uncertainties of military life today – uncertainties that can include
the risk of a service-related death – as well as pursue long-term
financial security tomorrow.”

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 Financial Planning 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.

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.

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