There are literally hundreds of special benefits for our men and women in the armed forces. They range from reduced property tax benefits, special health services, long term health care, and thrift saving plans to medical benefits for the disabled. Military families face plenty of financial challenges. If you’re saving for college or retirement, buying a home, or wondering how to help secure your family’s financial future, don’’t overlook these 3 important benefits available to military members.
Service Member’s Group Life Insurance (SGLI)
This is an affordable term life coverage where eligible service members are automatically enrolled. This also applies to spouses and dependent children who can automatically be enrolled through a program called Family Servicemembers’ Group Life Insurance (FSGLI). There are many considerations to buying term insurance besides premium costs. The life insurance needs of a young service member with a family are potentially more significant and need careful evaluation.
SGLI coverage has a maximum benefit of $400,000 and is available in $50,000 increments. There is full or part time coverage available. If you are totally disabled at separation, the coverage can be extended for up to 2 years. In addition, covered members (active duty members of Army, Navy, Air Force, Marines and Coast Guard) can keep their coverage free for an additional 120 days from their date of separation.
VA Home Loan
Here military families can benefit from the no-down-payment requirement of a VA loan. Post the credit crisis of 2008, home loans have become more and more difficult, especially for first time home buyers. While you can only use the VA Home Loan to finance a primary residence, it still offers additional benefits. You are not required to pay mortgage insurance because the VA guarantees a portion of the loan (making it easier to obtain one) and you may qualify for lower closing costs and appraisal fees. Note that the VA loan isn’t handled by the government, like other mortgages, these are offered by banks, credit unions and mortgage companies. Before applying for a mortgage loan, you will need to ask the lending company if they are VA-approved.
Look into special benefits like cash out financing (refinancing existing loan while borrowing extra money) and be mindful of the required VA required funding fee. This is a funding fee that you pay at the closing and is based on a percentage of what you are borrowing.
Post 9/11 GI Bill
While there are several benefits for our military in this bill, the focus seems to be on the educational benefits. This post 9/11 GI bill will pay up to the full amount of in-state tuition and public college fees for up to four years. There is even an allotment for private or foreign colleges. The cap for the 2014-2015 school year was set at $20,235.
The entitlement is for the enlisted individual; however, if they do not use the benefit, (in some instances) then up to 36 months of the unused education benefits can be transferred to a spouse or children. For example, if you want to transfer your unused benefit to your child, you must have served at least 6 years and generally commit to serving 4 additional years from the date the benefit is approved. You even have 15 years after your separation from service to use the educational benefits.
After researching these benefits, it is clear that our military men and women would be best served if they sought out financial advisors who specialize in financial planning for veterans. Please accept our heart-felt thanks for all of our military hero’s and the sacrifices they make.
Roberta L. Nestor is a financial advisor practicing at 491 New Haven Avenue in Milford, CT offering retirement, long term care, investment and tax planning services. She also offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network – a member FINRA/SIPC and a Registered Investment Adviser. Fixed insurance products offered through Nestor Financial Network are separate and unrelated to Commonwealth. Commonwealth Financial Network or Nestor Financial Network does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation. Roberta can be reached at Nestor Financial Network, 203-876-8066 or firstname.lastname@example.org.