The Invisible Backbone of Military Families
Military spouses play a vital, yet often overlooked, role in supporting their families. They manage childcare, oversee household operations, and provide emotional stability while their partners serve the nation. Despite this, many military families are underinsured when it comes to life insurance for spouses. The default coverage of $100,000 through the Service Members’ Group Life Insurance (SGLI) program barely scratches the surface of what is needed to secure a family’s future.
In this blog, we will explore why $100,000 is not enough, break down the costs of replacing the tasks a military spouse handles, and offer a real-world example of proper life insurance planning for a military family. Our goal is to empower military families to make informed decisions about their financial security.
The True Value of a Military Spouse
Military spouses contribute significantly to their households, performing tasks that would otherwise require paid services. The SGLI’s $100,000 coverage may seem like a substantial amount, but it falls short of covering the true economic value of a military spouse’s contributions. Let’s examine the costs of some key responsibilities:
Childcare
- Full-time childcare for two children can cost between $20,000 and $30,000 annually, depending on the region.
- After-school care, babysitting, and summer programs can add another $5,000 to $10,000 per year.
Household Management
- Housekeeping services average $120 per week or approximately $6,240 annually.
- Meal preparation services can range from $200 to $400 weekly, equating to $10,000 to $20,000 annually.
Transportation and Errands
- Hiring someone for transportation and errands, such as grocery shopping or school pickups, could cost around $5,000 per year.
Emotional and Family Support
While impossible to quantify, the emotional labor and stability provided by a military spouse are irreplaceable. The absence of this support can have long-term emotional and financial impacts on the family.
Combined, these costs demonstrate that the economic value of a stay-at-home military spouse can easily exceed $50,000 to $75,000 annually. Over a span of 10 years, this equates to $500,000 to $750,000—far beyond the $100,000 coverage offered by SGLI.
What Proper Coverage Looks Like
Understanding the financial gap is the first step toward securing adequate life insurance. Here is a breakdown of what proper coverage might look like for a military spouse who stays at home with two children:
Coverage Amount
- Childcare: $25,000 per year for 10 years = $250,000.
- Household Management: $15,000 per year for 10 years = $150,000.
- Education and Extracurriculars: $10,000 per year for 10 years = $100,000.
- Emergency Fund: An additional $100,000 to cover unexpected expenses.
Total Recommended Coverage: At least $600,000. This ensures that the surviving spouse can maintain the family’s lifestyle and cover essential expenses without significant financial strain.
Policy Options
- Term Life Insurance: Offers coverage for a specific period (e.g., 20 years) at an affordable premium. Ideal for families focused on securing their children’s future until adulthood.
- Permanent Life Insurance: Provides lifelong coverage and includes a cash value component that can be used for emergencies or retirement planning.
Real-Life Example
Consider a military family living on base with two young children. The service member is on active duty, and the spouse stays at home to manage the household. They rely solely on the SGLI’s spousal coverage of $100,000. Here’s what happens if the unthinkable occurs:
Scenario Without Adequate Coverage
- The $100,000 payout covers funeral expenses and some short-term costs, but it runs out within 1-2 years.
- The service member must pay for childcare, housekeeping, and additional support, adding stress to an already difficult situation.
- The family’s long-term financial stability is compromised, forcing lifestyle changes and potentially impacting the children’s education.
Scenario With Proper Coverage
- A $600,000 policy provides sufficient funds to cover childcare, household management, and emergency expenses for 10 years.
- The service member can focus on their duties and children’s emotional well-being without financial worries.
- The family’s lifestyle and future plans remain intact, honoring the legacy of the lost spouse.
This comparison highlights how adequate life insurance transforms a family’s ability to weather unforeseen circumstances.
Protecting What Matters Most
Military families face unique challenges, and life insurance is an essential tool for mitigating financial risks. The $100,000 provided by SGLI is a good starting point, but it’s far from sufficient to cover the true economic value of a military spouse’s contributions. By understanding the costs of childcare, household management, and other critical responsibilities, families can make informed decisions about their life insurance needs. Life insurance will not stop the pain of losing a spouse or parent, but it will allow the family time to grieve and help mitigate the financial burden.
Take the First Step Today
Securing the right life insurance coverage doesn’t have to be complicated. At the Barge Group, we specialize in helping military families navigate their insurance options. Schedule a consultation with one of our experts to discuss your needs and find the policy that fits your family’s future. Don’t wait—take action today to protect what matters most!