Is my SGLI enough for me?

Before you can determine whether or not your Service-members’ Group Life Insurance (SGLI) insurance is enough you may want to review a few things about how SGLI works.  The information below was gathered from a section of the  U.S. Department of Veterans affairs website about SGLI.

According to the U.S. Department of Veterans affairs:

• Service-members’ Group Life Insurance (or SGLI) is a low cost group life insurance plan for service-members’ on active duty, ready reservists, members of the National Guard, members of the Commissioned Corps of the National Oceanic and Atmospheric Administration and the Public Health Service, cadets and midshipmen of the four service academies, and members of the Reserve Officer Training Corps.
• SGLI coverage is available in $50,000 increments up to the maximum of $400,000.
• SGLI premiums are currently $.065 per $1,000 of insurance, regardless of the member’s age.
• Service-members with SGLI coverage have two options available to them upon release from service.
  1. Convert their full-time SGLI coverage to term insurance under the Veterans’ Group Life Insurance program (VGLI).
  2. Convert to a permanent plan of insurance with one of the participating commercial insurance companies.
• The SGLI Disability Extension allows service members who are totally disabled at time of discharge to retain the Servicemembers’ Group Life Insurance (SGLI) coverage they had in service at no cost for up to two years.

Now that you know a little more about how SGLI works it is time to ask yourself a couple of questions.

Do I need more than $400,000 of coverage?

• Click on this Insurance Calculator to Find out!

Do I want permanent insurance now?

• If you can afford it, now is the best time to start a permanent insurance program.
• SGLI itself is not a permanent insurance program.

Can I convert my SGLI to permanent insurance later?

• Conversion must be done within 120 days of separation.
• Conversion to VGLI and maintaining a level coverage my not be an affordable solution.
  • The monthly premium of  VGLI increases every five years until age 75.
  • Click on this link to see how $400,000 of VGLI coverage at age 75 would cost $1,800.00 per month.

• Conversion to a commercial plan of insurance will have restrictions.
  • Conversion only waives the proof of good health requirement it does not lock in a low price.
  • Your monthly premium will be based on your age at conversion.
  • The conversion policy must be a permanent policy, such as a whole life policy.
  • Other types of policies, such as Term, Variable Life, or Universal Life Insurance are not allowed as conversion policies.
  • In addition, supplementary policy benefits such as Accidental Death and Dismemberment or Waiver of Premium for Disability are not considered part of the conversion policy.

So what are my choices?

• You can choose SGLI if it meets all of your insurance needs.
• You can choose a solution from an outside company that will cover Active duty military.
• You can choose a combination of SGLI coverage and coverage from an outside source that will cover active duty military.

What is a Beneficiary?

According to our friends over at National Life, a beneficiary is the person or persons designated by the policyholder to receive the proceeds of an insurance policy upon the death of the insured.

What this basically means to that when you purchase a life insurance policy that you are also going to choose a person you want the money to go to when you pass away.  This person is your beneficiary.

What if you want to leave the money to more than one person or maybe even to a charitable organization.  How would that work out?  Lets say you want to leave 1/3 to your spouse, 1/3 to you grandchildren, and 1/3 to your favorite charitable organization.   All three would be considered equal beneficiaries each receiving 1/3 of the benefit.

Lets take a quick look at a more complicated setup!  Lets say you want to leave all the money in your policy to your spouse but in the event that your spouse is not alive then you want the money to go to your children.  In this scenario your spouse would be considered the primary beneficiary and your children would be considered the contingent beneficiaries.

There are endless possibilities to how the beneficiaries of your policy can be set up.   Knowing how beneficiaries work is crucial to achieving your estate planning goals.  Just as important as knowing how beneficiaries work is making sure your beneficiaries are kept up to date.   Make sure your beneficiaries are up to date during your next policy review.

-Daniel

The Four Types of Money

Your retirement savings can be broken down into four types of money.   By reading the names of each type below it is very easy to determine which catagories are the most valuable.

Free Money

• The most valuable type of money.
• Just like it sounds money that you get for free.
• Very difficult to get enough of it to retire on.

Tax-Free Money

• The second most valuable type of money.
• This is money you don’t have to pay taxes on.
• Often skipped over when retirement planning is done.

Tax-Deferred Money

• The third most valuable type of money.
• This type of money you don’t pay taxes on until a later date.

Taxable Money

• The least valuable type of money.
• This money is taxable by the government.

Do you know which categories your retirement savings fall into?  Which catagories your retirement money fall into can mean the difference between postponing your retirement and you living out your retirement dreams.

Living Benefits: Putting real LIFE uses into life insurance.

What are living benefits?  In reference to life insurance, living benefits are a set of riders that allow you to access all or a portion the death benefit (face amount) of your life insurance policy while you are alive.  For the longest time we have purchased life insurance for the benefit of others.   Today, living benefits riders on your life insurance policy can be a great tool to help you protect in the event of  many of today’s illness risk  in addition to securing your families financial future when you are gone.  The three most significant living benefits riders are: terminal, chronic, and critical illness riders.

Terminal Illness Rider

• Access a portion or all of the death benefit of your life insurance policy if you are diagnosed with a terminal illness.
• Usually allows access on a lump sum basis.
• This riders goal is to provide resources to allow you get your affairs in order before death.

Chronic Illness Rider

• Access a portion of the death benefit of your life insurance policy if you are diagnosed with a chronic illness.
• Usually allows access on a monthly basis.
• Provides resources that could be used to pay bills associated with being chronically ill.

Critical Illness Rider

• Access a portion or all of the death benefit of your life insurance if you are diagnosed with a critical illness.
• Usually allows access on a lump sum basis.
• Provides resources that could be used to pay hospital bills resulting from major critical illnesses such as cancer, heart attacks, strokes, and other major illnesses.

This post is intended make you aware of and give you a basic understanding of living benefits riders. Keep in mind that the living benefits riders availability, qualification requirements,  and cost will vary greatly from company to company.  Many people purchase regular life insurance policies today because they simply do not know these benefits exist.   When you meet with an insurance professional ask if the program they are showing you includes living benefits and if so, at what cost?  You might be surprised when you find that there are companies that give you these living benefits riders at no additional cost.

Daniel Wilgocki

706-955-0201

Mortgage Protection 101

So you’ve finally closed on your house.  Congratulations!  Homeownership can be one of the most rewarding experiences in life.  You may not realize, but it took years of financial responsibility to be able to accomplish the feat of purchasing a home.  Making sure that your bills were paid on time sure has paid off!  You are now part of the financially responsible group of people called homeowners.  Go ahead and give yourself a pat on the back.  Just one more thing to do which will ensure you and your family can continue to enjoy the financial stability that you have provided for many years to come.  That is making sure you have a properly set up a mortgage protection plan.

What is mortgage protection?

• Mortgage protection is a combination of life insurance, disability insurance, and an emergency fund.
• If the breadwinner of your family were to become seriously ill or pass away suddenly and unexpectedly would it affect your family financially?
• A comprehensive mortgage protection plan will address these concerns.

Life insurance

• Life insurance will pay your beneficiary a death benefit amount should you pass away suddenly and unexpectedly.
• The death benefit amount you choose should be enough to pay off the entire mortgage.
• There are many different kinds of plans available today with term, whole, and universal life being the most popular.
• Living benefits riders allow you to pay off your entire mortgage in the event of  terminal, chronic, or critical illnesses.
• Return of premium rider will provide a return on all money paid into the plan at the designated end of the term.

Disability Income Insurance

• Disability income insurance will pay you a  monthly portion of  lost  income in the event that you can not perform the duties of your job due to a disability.
• Your ability to produce income is one of your most valuable assets.
• Employer sponsored disability income insurance plans may restrict the coverage to job related disabilities only.
• Some life insurance plans can include disability income coverage as a rider.

Emergency Fund

• It will provide you access to money to pay bills in the event of unemployment or some other non health related emergencies.
• At least six months of living expenses is the goal for your emergency fund.
• 401k’s and other qualified retirement plans that have strict penalties for early withdraws make them unsuitable for use as an emergency fund.
• Life insurance plans that accumulate cash value could be accessed for any reason after the plan has been in effect for a certain amount of time.

May Discussion Topic: Disability Insurance

I bet many of you didn’t know that May is Disability Insurance Awareness Month. With that being said, I am sure that there are many questions you guys have about disability insurance. Feel free to post your questions you have and I will do my best to answer them.