There are approximately 1.3 million active-duty military personnel in the United States, bravely putting their lives on the line for American civilians at a moment’s notice. Heroism runs deep in the American military, but these types of careers might come with a price. When your job carries a certain level of inherent danger, it’s even more essential to ensure that your family is taken care of in the event that something happens. Members of the United State Military can consider some of the following types of plans and/or accounts to provide peace of mind and to ensure they’re doing everything they can to take care of their family.
What it is: Life insurance comes in two forms — traditional or Whole Life policies. In the more common (and often more affordable) traditional plans, the policyholder pays a monthly fee for a certain number of years in exchange for the insurer promising to pay designated beneficiaries a specified amount of money in the case of the policy holder’s death or, in some cases, other events that may render the policyholder incapacitated. Whole life policies may be more expensive, but they also often offer an opportunity to borrow against the cash value of the policy for big-ticket items you may need, like home renovations or education costs.
Why it helps: These policies help the policyholder cement the fact that if something happened to them, their policy would pay out a set amount of money to cover their family for certain financial necessities, like funeral costs, a mortgage or car costs, and even potentially college, depending on the payout amount.
Short- or long-term disability insurance
What it is: Short-term disability insurance, as the name implies, financially covers the policyholder for a short period of time following an illness or injury that keeps them from working. Long-term disability is also an option, but short-term policies are designed for immediate payouts (on a shorter timeline), while long-term plans tend to have longer waiting periods but cover illness or injury for longer. It’s important to consider your potential needs before deciding which might be right for you.
Why it helps: Either short- or long-term disability insurance is a good way to make sure you’d continue to have money coming in in the case that you’re injured and cannot work for a certain period. For more resources that can help when dealing with a disability, read this.
529 college savings account
What it is: These accounts allow you to determine how much you might want to contribute to your child’s college education, and then contribute a certain amount to an account that will grow year after year for that goal.
Why it helps: Besides the fact that a college education is one of the best gifts you can give any young person, as an added bonus, in most states these types of plans have tax incentives, as well. You can learn more here.
Health Savings Account (HSA)
What it is: When offered by an employer, people can put money into these accounts to be used to pay for certain qualified medical expenses.
Why it helps: Funds contributed to an HSA aren’t subject to federal income tax, so they’re a nice way to pay for medical costs while also saving a little extra money. There is sometimes also an option to hold on to the money in an HSA and invest it. In this way, it can become an additional account to be used to cover medical expenses after retirement.
Flexible Spending Account
What it is: Similar to an HSA, the FSA allows you to contribute money into an account to pay for qualified medical expenses, but it can also cover certain additional costs, like childcare.
Why it helps: With childcare costs soaring, using a tax-free account to pay for extra help — particularly during deployment — can be very useful.
Our military members have enough on their plates without the added worry that if something happened to them, their families might suffer financially. The accounts listed above can help avoid some of that fear, for both the present and the future.