In honor of Memorial Day, The Motley Fool salutes current and former military personnel and their families with a series of articles addressing common financial issues they face. Check out all of the Fool's Memorial Day articles.
Most people resist thinking about their mortality. But if you're a military man or woman who is called to active duty in a combat zone, mortality is something you face every day -- like it or not.
In the rush of preparing to leave your home and family to fight, it's easy to neglect taking care of financial and personal matters. Yet just as the country relies on you to do your duty as a member of the armed forces, your family relies on you to do whatever it takes to protect them against the possibility of tragedy. Consider it part of your financial boot camp.
Prepare for anything
Considering the dangers that face our fighting men and women throughout the world, your family needs you to consider the worst that could happen. To that end, take a look at what financial resources you have in place to take care of your family if something happens to you.
The government automatically provides military personnel with life insurance through the Servicemembers' Group Life Insurance (SGLI) program. Unless you decide to decline or reduce your insurance coverage, SGLI pays a death benefit of $400,000 to your family. Currently, SGLI charges a $29 monthly premium for this coverage. In addition, spouses and children are eligible to participate in the Family Servicemembers' Group Life Insurance (FSGLI). It's essential that service members select the beneficiaries they want to receive their life insurance benefits to make sure they receive payments in a timely and orderly manner.
Families of active-duty members who are killed in action also receive a one-time tax-free payment of $12,420. This amount rises to $100,000 for deaths resulting from combat zone operations or certain types of hazardous duty. This payment is made quickly to help families meet immediate financial needs -- often within hours.
Support for your family
In addition, if you're married, your surviving spouse may qualify for ongoing monthly payments under the Dependency and Indemnity Compensation (DIC) program. Surviving spouses receive a flat monthly payment if a service member's death is related to service. The amount for 2007 is $1,067 and adjusts with costs of living from year to year. If you have minor children, then your spouse will receive an additional $265 per child. To receive benefits, surviving spouses must apply with the VA. This pamphlet from the Department of Defense explains more about the process, who is eligible, and how to get the benefits you need.
The Military OneSource website has excellent information on all sorts of financial issues that military families face, including casualty assistance in the face of tragedy.
Of course, everyone hopes all of our troops will return home safe and sound, and that any efforts you make to ensure your family's financial survival against a possible tragedy will prove to have been unnecessary. Yet being prepared for whatever may happen is a duty you owe to those you love. In remembering those who gave their lives for their country, you can honor them by thinking of the loved ones who will remember you if you make the ultimate sacrifice.