Retiring From Military - Term Life Insurance

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Ripcord
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Retiring From Military - Term Life Insurance

Post by Ripcord »

So I'm retiring from the Air Force later this year. I do not plan to do SBP or VGLI because I believe I can get better value from a 20yr term life insurance policy. Looking for any tips on insurance shopping or recommended companies. TIA
Rex66
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Re: Retiring From Military - Term Life Insurance

Post by Rex66 »

Term4sale.com for an idea what u might qualify for
RedDog
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Re: Retiring From Military - Term Life Insurance

Post by RedDog »

Realize this isn’t something you’re asking about…but as a military retiree to a soon to be retiree…unless you’re an unusually old retiree (say in your 50s) 20 year term life and SBP aren’t remotely comparable.
Fat Tails
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Re: Retiring From Military - Term Life Insurance

Post by Fat Tails »

RedDog wrote: Thu Jun 24, 2021 9:44 pm Realize this isn’t something you’re asking about…but as a military retiree to a soon to be retiree…unless you’re an unusually old retiree (say in your 50s) 20 year term life and SBP aren’t remotely comparable.
+1. OP, have you calculated how much insurance you will need to provide the equivalent lifetime, inflation protected, guaranteed income that the survivors benefit program provides?
“If you would be wealthy, think of saving as well as getting.” ― Benjamin Franklin
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Ripcord
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Re: Retiring From Military - Term Life Insurance

Post by Ripcord »

Fat Tails wrote: Thu Jun 24, 2021 11:22 pm
RedDog wrote: Thu Jun 24, 2021 9:44 pm Realize this isn’t something you’re asking about…but as a military retiree to a soon to be retiree…unless you’re an unusually old retiree (say in your 50s) 20 year term life and SBP aren’t remotely comparable.
+1. OP, have you calculated how much insurance you will need to provide the equivalent lifetime, inflation protected, guaranteed income that the survivors benefit program provides?
I have and it's not worth it for the price for our situation. Some additional detail. My spouse is also military with a pension, TSP, roth IRA, taxable investments etc. Same as me. Our substantial investments will put us in self insured territory well under the 20 years the term policy would cover. Goal is to ensure if I pass between now and then she and our 2 kids wouldn't need to change lifestyle with loss of my pension. I'm 40 now. The SBP is about $350/mo for a 55% payback of my pension. We can do better and for cheaper with investments and term life.
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galawdawg
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Re: Retiring From Military - Term Life Insurance

Post by galawdawg »

First, thank you to both you and your wife for your service! Congratulations on your retirement, well-deserved!

Concerning your question, as long as you are certain that you won't desire life insurance later in life for the same reason (to avoid a reduction in lifestyle if you predecease your wife), then purchasing a term life policy now at your age is likely much more cost-effective. The downside to declining SBP in favor of the life policy is that if you decide in later years that you wish to ensure your surviving spouse's lifestyle can remain unchanged in the event of your passing, a life policy at that point could be very expensive to the extent that SBP may have been the more cost-effective choice over the long-term.

You can look at Quotacy (https://www.quotacy.com/life-insurance-quotes) for some ballpark numbers without providing your contact information. Policygenius requires contact information before it will provide any quotes (https://www.policygenius.com/). Those two sites will provide quotes from multiple insurers.

Consider checking the rates for several term options (from 10 yr to 40 yr) as the monthly rate varies significantly. For every ten yeas of additional coverage, the monthly rate may nearly double. For example, a ten (10) year $1 million policy for a healthy 40 yr old may run about $30 per month for a cost of $360/yr for ten (10) years while the same coverage on a twenty (20) year policy would be about $50 per month for a cost of $600/yr for twenty (20) years.

That may help you decide whether to have a shorter term policy to cover the period until your children have completed college to a longer term policy that may lock in a rate now for coverage throughout your retirement years or something in-between.

Hope that helps!
Parkinglotracer
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Re: Retiring From Military - Term Life Insurance

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Parkinglotracer
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Re: Retiring From Military - Term Life Insurance

Post by Parkinglotracer »

Your wife having a pension too changes my SBP thoughts. Good luck in retirement!
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Stinky
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Re: Retiring From Military - Term Life Insurance

Post by Stinky »

I'd go to Zander.com for quotes. I've used them several times to purchase term life insurance. But any of the quote sites mentioned will provide multiple quotes from multiple companies.

Don't buy from an agent who represents just one company (like NW Mutual) or from the company that covers your auto/home (like State Farm) without comparing prices and terms. Usually those companies are higher-cost than buying from Zander or a similar source.
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Nords
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Re: Retiring From Military - Term Life Insurance

Post by Nords »

Ripcord wrote: Fri Jun 25, 2021 1:04 am
Fat Tails wrote: Thu Jun 24, 2021 11:22 pm
RedDog wrote: Thu Jun 24, 2021 9:44 pm Realize this isn’t something you’re asking about…but as a military retiree to a soon to be retiree…unless you’re an unusually old retiree (say in your 50s) 20 year term life and SBP aren’t remotely comparable.
+1. OP, have you calculated how much insurance you will need to provide the equivalent lifetime, inflation protected, guaranteed income that the survivors benefit program provides?
I have and it's not worth it for the price for our situation. Some additional detail. My spouse is also military with a pension, TSP, roth IRA, taxable investments etc. Same as me. Our substantial investments will put us in self insured territory well under the 20 years the term policy would cover. Goal is to ensure if I pass between now and then she and our 2 kids wouldn't need to change lifestyle with loss of my pension. I'm 40 now. The SBP is about $350/mo for a 55% payback of my pension. We can do better and for cheaper with investments and term life.
Ripcord, here's some tips from my readers and my experience:
1. Arrange your insurance before you do your retirement physical or your VA disability claim. (I realize you may have already started both.) If there's any new info in your medical record from either of those exams then your term-life insurer may have more questions

2. Consider PolicyGenius, AAFMAA, and Armed Forces Insurance for your term life quotes. USAA may also be competitive again if that's convenient for you.

3. If you really want to dig into the SBP / term choices then read CFP Forrest Baumhover's book:
https://www.amazon.com/Military-Transitions-Guide-Survivor-Benefit/dp/1534883959/
It analyzes all the cases of SBP/term/both/neither.

4. You might want term insurance to cover you until age 65-70, until you start Social Security deposits. However if you and your spouse are both receiving military pensions (as well as potential VA disability compensation) then (as you've written) you might not care about term insurance for longer than 10-20 years.

5. My spouse and I are dual-military retirees. We also declined each others' SBP at retirement, because we each have more than enough assets to remain financially independent if one of us dies early. Let me know if you have more questions about dual-military retirees. There aren't enough of us for a data-packed research study, but all the ones I know have way more than enough assets to last for the rest of our lives.
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SwampDonkey
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Re: Retiring From Military - Term Life Insurance

Post by SwampDonkey »

Dropped SGLI a couple of years ago. Received quotes from 10+ companies. By far, the cheapest was: https://www.navymutual.org.

They are non-profit and their sales representatives do not receive commissions on their sales so they won't try and upsell you on something you don't need.

Overall, I'd rate them 10/10.
Topic Author
Ripcord
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Re: Retiring From Military - Term Life Insurance

Post by Ripcord »

Thank you all. Have a few quotes lined for this week. Appreciate the comments.
Soon2BXProgrammer
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Re: Retiring From Military - Term Life Insurance

Post by Soon2BXProgrammer »

Nords wrote: Sat Jun 26, 2021 12:49 pm 3. If you really want to dig into the SBP / term choices then read CFP Forrest Baumhover's book:
https://www.amazon.com/Military-Transit ... 534883959/
It analyzes all the cases of SBP/term/both/neither.
The only other wrinkle is if you want/need to work more.. AND you retired as a low enough enlisted, but you think you can get a decently high GS position.. you might not opt for SBP... and get a GS job.. and buy your military time back eventually, and retire with a GS pension taking the survivor option... and have term insurance for the time period between those events.... (i've seen E5/E6's get out and come back as GS13s in the 2210 career field.. the combination of 20 years of experience and if they got a degree but didn't switch to officer because they had been almost done...) (the cost to buy an E5's career typically isnt' too bad, so if planning a decent number of years as a GS, this can work out)
Chartered Financial Consultant (ChFC®), Retirement Income Certified Professional (RICP®) -- I am not your advisor.
BruinBones
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Re: Retiring From Military - Term Life Insurance

Post by BruinBones »

SwampDonkey wrote: Sat Jun 26, 2021 8:44 pm Dropped SGLI a couple of years ago. Received quotes from 10+ companies. By far, the cheapest was: https://www.navymutual.org.

They are non-profit and their sales representatives do not receive commissions on their sales so they won't try and upsell you on something you don't need.

Overall, I'd rate them 10/10.
Retired Naval Officer in 2012. I used Select Quote and found the best deal with Navy Mutual, also.
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