René Bruer remembers that when he was a 21-year-old Marine at Camp Pendleton in Southern California 17 years ago, he was sold a variable universal life insurance plan by an insurance agent.
“My wife and I needed life insurance, and we didn’t know any better,” says Bruer, currently a Tallahassee, Fla., financial advisor with Smith Bruer Advisors. The VUL product was sold for its cash value, but Bruer says it wouldn’t have helped him if he had been killed on the battlefield.
“What do you sell a 21-year-old Marine a VUL for? If I was to perish in battle … guess what! There is no death benefit.” It was only later on, after he became educated, that he realized he still had the policy and that it was a rip-off.
He says he was helped in that education by having the right people in his life. His father-in-law was financially knowledgeable, as were people in his chain of command. Not everyone was so lucky, he says.
“Especially with some of my enlisted colleagues on the younger side, most of them never had any financial education to speak of,” Bruer says. Predatory lenders (and other types of predators) were rampant in his world. “We always joke the most prominent things outside of a military base are pawn shops, strip clubs and payday loans.”
He says it’s important for members of the military to learn about finances when they are still on active duty, because their behavior can follow them into their lives as vets.
This month, the Finra Investor Education Foundation released a study that compared the financial situation of veterans with those of civilians. The study, called "The Financial Welfare of Military Veterans," says that veterans are overall in slightly better financial standing than civilians. They are 22 percent less likely to be jobless; they are 2 percent more likely to enjoy health insurance coverage. They are 5 percent more likely to be happy with their financial condition and 4 percent more likely to have emergency cash.
"Veterans who retired from the military are 14 percent less likely to report difficulty covering their expenses than those who did not retire from the military," said Finra in a summary.
But on the downside, the paper found, veterans were 40 percent more likely to be underwater on their houses and 28 percent more likely to have been late with a home payment in the last year. They were 9 percent more likely to have picked up bad credit card habits, garnering late payment charges, for instance.
The research released by Finra was authored independently by William Skimmyhorn, a lieutenant colonel in the U.S. Army and a professor in the Office of Economic and Manpower Analysis in the Department of Social Sciences at West Point. He pursued this research because he says there had been little of it conducted on the financial well-being of veterans.