INSIGHT: Changed Jobs? Be Your Family’s Protector and Update Your Plan

[SanfordNowlinUSAA]

Updated March 13, 2017

Maybe you were one of the nearly 250,000 military members that separate from the service each year or perhaps you downsized and lost your job. In either case, your benefits will most likely stay with your employer.

According to the Bureau of Labor Statistics, Americans change jobs every 4.2 years on average, and in the process, they enroll in new health care insurance, different retirement plans and elect other benefits such as health savings plans and life insurance. Group life insurance can be a valued resource in your financial plan, but if you follow the job-swap trend, then your family’s protection could be something that gets less attention than it deserves.

Most civilian employers provide group life insurance as a multiple of the employee’s income, typically two times the worker’s base wages. Let’s do some simple math: The national average salary in 2015, indexed for annual inflation, was $55,775. The $110,000 your family will receive if you die won’t replace your financial worth for very long.

Service members are provided with Servicemembers Group Life Insurance (SGLI), which offers a base protection amount of $400,000 for the service member and up to $100,000 for a spouse through the Family Servicemembers Group Life Insurance (FSGLI) program. Is that enough? Well, consider a mortgage, any other debts and then add some kids and a goal to pay for college tuition. What may have seemed like a big number suddenly looks less substantial.

Group life insurance, like SGLI or Veterans Group Life Insurance (VGLI), can provide great benefits, but group coverage takes the one-size-fits-all approach. Your financial situation is exclusive to you, and your family’s needs deserve more than that.

Here are some basic questions to help evaluate your current life insurance:

Do I have the right amount?

• Do I have protection for outstanding liabilities, income replacement to help my loved ones continue with financial goals that were in place and coverage for final expenses?
• Am I covering college education or estate-planning expenses?

Do I have the right type?

• Do I need temporary (term or group coverage) or lifetime (whole life, universal life) coverage?
• If I have temporary insurance, how long does my coverage last? Will I have needs or liabilities that will still be there when my coverage expires? What contract options do I have if I need longer coverage?
• If lifetime, when was the last time I reviewed how my policy was performing? Specifically review any dividends, cash value growth or if there are any outstanding loans.

Am I paying a fair cost?

• Has my health improved since I first purchased my insurance? Is there a better rate available for me today?
• Are my current premiums fixed or will they change?

These questions can help you start your evaluation. Continue the conversation with a trusted advisor to make sure your protection plans meet your family’s needs.

More Resources

Complete USAA’s Life Insurance Needs Calculator¹ to determine how much life insurance your family would need if you died today.

Visit USAA’s Life Insurance page to get a personalized quote in minutes.

¹This calculator is a self-help tool. You should enter figures that reflect your individual situation. This information is provided for illustrative purposes only. The above life insurance needs estimate is based in part on the age and information you entered and results may vary depending on your individual circumstances.

Life insurance and annuities provided by USAA Life Insurance Company, San Antonio, TX and in New York by USAA Life Insurance Company of New York, Highland Falls, NY. All insurance products are subject to state availability, issue limitations and contractual terms and conditions.  Each company has sole financial responsibility for its own products.

239798 - 0217