According to a new survey by the First Command Financial Behaviors Index, American servicemen and women and many military families are dealing with the financial risk of combat-related death by using commercial life insurance products in addition to government-issued life insurance policies.
The survey finds that 42 percent of middle-class military families with household incomes of at least $50,000 own some form of permanent life insurance, and 49 percent own term life insurance products. Fewer members of the general population own life insurance, as 37 percent have a permanent life insurance policy and 39 percent own term policies.
"The popularity of commercial life insurance in the military community is yet another example of the fiscal conservatism we see in this population, which tends to focus more on savings, debt-reduction and other frugal behaviors than the general public," said Scott Spiker, CEO of First Command. "But more importantly, the prevalence of these products is a somber reminder that military families live with the risk of wartime death. They understand the threat, and they are taking meaningful actions to protect their long-term financial security."
Service members should use caution when buying life insurance. According to the San Diego Reader, an audit by the Pentagon's Office of Inspector General showed that military officials didn't do enough to halt illegal life insurance sales practices on the San Diego County Marine Corps bases, threatening the "financial stability" of junior enlistees.