SGLI: Making sure it benefits loved ones

  • Published
  • By 1st Lt. Clayton Cox
  • Malmstrom Legal Office
MALMSTROM AIR FORCE BASE, Mont. --  Updating a Service member's Group Life Insurance is not just about paperwork, it's about providing for loved ones after Airmen are gone. The SGLI program exists to help military members provide financial security for their families in the event of their death. This money can go directly to whomever is chosen, and may be designated for specific uses, but Airmen must make their choice clear. The following are three tips to make sure an SGLI appropriately provides for loved ones:

First, be sure the named SGLI beneficiaries' information is current. SGLI payments go to whomever is designated, and the only way to update where those payments go is by updating the SGLI paperwork. Airmen should strongly consider updating their beneficiary information if they get married, divorced, have children or change their mind about who should benefit, how much they should get or when they should get it. If they don't, odds are the SGLI program won't do what they want it to.

Second, be specific about who gets what and how much they get. This may sound obvious, but there are some pitfalls members may not be aware of. For example, some members may have been advised to write "by law" or "by will" as the beneficiary for the SGLI. While technically allowed, these designations may create delays in payments and may even exclude loved ones from receiving payments under the SGLI program. It is better to specifically name the person, trust, corporation, charity, church or any other legal entity as the beneficiary.

Third, Airmen can control how SGLI payments are made to their loved ones by creating a trust. Through a trust, members can have specific control over who gets what, how much they get and what the money can be used for. For example, if they have children but don't want them to inherit too much too soon, the SGLI money could be held in trust until they turn 25 or 55. Airmen could also specify that the money must be used for college, or that it is provided for a loved one with special needs. Using a trust in conjunction with the SGLI program is a powerful way to plan for loved ones.

For more information about SGLI beneficiaries, contact the Malmstrom Legal Office at 731-2878.