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Life Health > Life Insurance

Military families top public in coverage

By Warren S. Hersch

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The percentage of military households with permanent life insurance coverage is significantly higher than that of the general public, according to a new report.

First Command Financial Services Inc. discloses this finding in a survey of consumers on their life insurance coverage as part the company’s observance of Life Insurance Awareness Month in September. The survey draws on the First Command Financial Behaviors Index, which examines financial behaviors, attitudes and intentions among U.S. consumers.

The report reveals that nearly half of military personnel (48 percent) and one-third of the general population (33 percent) have permanent life insurance coverage. But whereas permanent coverage for the military has risen since August of 2011 (then at 42 percent, rising to 48 percent in July 2012), coverage extended to the general population declined over the same period (from 37 percent in August 2011 to 36 percent in July 2012).

The report adds that, given their higher use of personal life insurance, military households exceed those of the general population in ownership of all policy types, most especially term life and whole life contracts:

Policy type

Military

General population

Term life

53%

41%

Whole life

32%

23%

Universal life

15%

8%

Variable life

6%

3%

Endowment

3%

2%

Limited pay

2%

1%

The report observes that military households are more likely than those in the general populate to indicate a change to their personal coverage as a result of the economy (13 percent vs. 7 percent). But individuals in the general population remain significantly more likely to NOT have life insurance relative to those in the military.

(No personal coverage: 25 percent of general population vs. 8 percent of military households. No employer coverage: 26 percent of general population vs. 9 percent of military households.)

The report notes that sequestration — a section of the Budget Control Act of 2011 that called for reductions in federal spending, split evenly between defense and non-defense appropriations — more greatly impacted (by most measures) military families’ personal insurance coverage than coverage obtained through their employer:

Personal

Military employer

Increased coverage

52%

18%

Decreased coverage

24%

36%

Eliminated coverage

14%

9%

Changed providers

10%

27%

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