SGLI is a great, low-cost benefit that should be a part of every service member's financial plan. However, it may not be enough for your long-term financial goals.
Article: 5 minutes
Updated: January 23, 2026 Published: December 22, 2021
By: Josh Andrews, CFP® Reviewed by: Editorial contributors
Information courtesy of USAA Life Insurance Company and USAA Life Insurance Company of New York.
That's an abrupt way to start the life insurance conversation, but it's an important question as you plan to meet your loved ones' needs. From paying off a mortgage to keeping food on the table, life insurance is a crucial element of a strong financial plan. While it can't alleviate grief, it can help ease the financial burden when a family member dies.
There are two main points I want to address up front.
Considering these points, we define adequate life insurance as coverage that pays off 100% of debts and replaces five years of income.
Video Duration: 2 minutes 0 seconds
Servicemembers' Group Life Insurance, or SGLI, is a low-cost benefit that should be part of every service member's financial plan. From reducing debt to paying for college expenses, life insurance can help ease your financial burden when a family member dies. But you may need more than just SGLI to protect your loved ones.
Additional private life insurance can help you:
Pay off debt.
When people think about life insurance, paying off debt is usually their main priority. When you don't have debt, your savings can last much longer.
Replace your income.
If your loved one dies and they were the sole earner, having life insurance to replace their income can help until you find a job. Even in households with two incomes, the loss of one income can be hard.
No matter how much you make, life insurance can help you bridge the gap and continue to take care of your family.
Pay for child care.
Child care can be a large budget item. If you can cover child care with your life insurance payout, your income can go toward other important things.
Secure health insurance.
Health insurance could be an important consideration, especially if you're a one-income family.
Fund education costs or college savings.
Many people plan to use life insurance proceeds to help pay for their children's education costs.
Cover other individual goals.
Some people want to use life insurance to leave a legacy, pay off a small business loan, hire someone to run their business, or provide care for someone with special needs.
Because every situation is different, you should discuss your life insurance plan with your loved ones. To know if SGLI is enough, think about what's needed to live day to day, and what your family goals look like. If SGLI isn't enough, consider adding private life insurance to your financial plan and helping to protect what's important.
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USAA means United Services Automobile Association and its affiliates.
No Department of Defense or government agency endorsement.
8510272] End of description.
Simply put, SGLI is group term life insurance offered for military service members. Its objective is to give you and your family a respectable amount of protection while on active duty. You can learn more about the specifics through the U.S. Department of Veterans Affairs.
Let's look at how SGLI and private life insurance can help provide peace of mind for your family's future.
When people think about life insurance, paying off debt is usually their main priority. After all, with no debt, savings can last much longer.
A family's biggest debt is usually their mortgage, with the U.S. average balance at approximately $267,000 in 2025 See note 1.
In addition to mortgages, some people also carry:
Let's say your family receives $500,000 of SGLI. If you subtract these average consumer debt balances, you're left with just over $191,000. Considering adequate coverage amounts, you must ask yourself if this remainder covers five years of income.
If the person who dies is the sole wage earner, replacement income can help bridge the gap until the remaining spouse can find a job. It also gives them time to grieve, so they don't have the added stress of finding a job immediately.
When I was serving active duty, I knew that if I died, it would take some time before my wife would earn as much as I was earning at that time.
There were several reasons for that. She had been out of the workforce for almost 10 years raising our children. And even before we had children, she didn't have many opportunities for continual employment because as a military spouse, she moved every two to three years. It would take some time for her to re-climb the corporate ladder to earn the same salary I was making mid-career.
That's not to say that the loss of one income doesn't equally affect dual-income households, especially if they're spending all they earn. No matter how much you make, if you'll be financially burdened by the loss of income, strongly consider how life insurance can be used to ease your burden.
To help illustrate the cost of replacing income, let's look at two separate examples. One of an E-5 and the other an O-3, both with 10 years of service and assume that each files taxes married-jointly in a family of three.
We will assume the E-5 has an approximately yearly income of $79,600 while our O-3 is at $128,660.
Adding up Basic Pay, BAS and BAH, our E-5 has an approximate income of $79,600 annually, while our O-3 is at $128,660.
To replace five years of income, the E-5 would need $398,000 of SGLI and an O-3 would need $643,300.
Considering the previous example, you're only left with $191,000 after paying off your debts. So regardless of the level you're at in your career, you'd likely fall short of being adequately covered.
In my case, I didn't want my family to just get by; I wanted them to be able to fully accomplish our family's financial goals. That's where extra life insurance — above adequate coverage — came into play.
When life insurance proceeds are used to pay for daily living expenses, they'll eventually run out. If you need child care to return to work, it can be a significant line item in your budget.
If you can cover child care with your life insurance payout, you can help the new income go further.
Many people plan to use life insurance proceeds to pay for their children's education costs. Qualified dependents may be able to use unused GI Bill awards for higher education, which could reduce the need for life insurance to cover this goal.
Every person and family have a unique set of goals and priorities. In addition to funding the basics like debt repayment and income replacement, some people want to use life insurance to leave a legacy, to pay off a small business loan, to hire someone to run their business, or to provide for the care of a special needs individual.
Because every situation is different, every family needs to have the life insurance conversation. To determine whether SGLI is enough, you can start with building a good understanding of your family finances and goals. From there, speak to a professional or use an online life insurance calculator to help determine if SGLI is enough. If it's not, consider supplementing SGLI with a private life insurance policy to make sure your desired goals are met.