Soldiers’ Death Benefits Could Exceed $800,000

The families of U.S. soldiers killed in action or in accidents during the Iraq war are eligible for death benefits that could range from $250,000 to more than $800,000.

The benefits are generally extended to the people who would have relied on the service member’s income for economic security, and some can endure for the lifetime of the survivor.

Dependent children are eligible for additional compensation, although many of those benefits are terminated if a surviving spouse remarries.

The benefits, provided by the Department of Defense, Veterans Affairs and the Social Security Administration, include up to 45 months of help with education costs for both spouse and children, as well as an income tax break lasting a year.

The overall value of the package depends on the length of military service and the age of the service member at the time of death.

The Navy Mutual Aid Assn. has estimated, for example, that a wife and two young children surviving a petty officer who had served 10 years and was killed in action can expect a monthly benefit of $3,327. That climbs to $4,795 a month for the family of a lieutenant killed in combat.

Legislation now working its way through Congress would exclude all military death benefits from taxes.

Under the Servicemen’s Group Life Insurance program, all members of the armed forces are automatically insured for $250,000 as soon as they enter into active duty, unless they voluntarily reduce or decline coverage.

Service members pay the premiums for the life insurance benefits through automatic deductions from their wages.

The service member can purchase an additional $100,000 in life insurance for his or her spouse for $108 a year until age 34, the premium rising in stages to $660 a year for those 55 and older.

The benefit is paid regardless of whether death occurs in combat, in an accident in the war zone, or even at home on leave, military officials said.

According to a summary of compensation for survivors of U.S. military personnel provided this week by the Pentagon, these are the main categories of death benefits for survivors, regardless of the rank of the person who dies:

* Death gratuity. This amounts to $6,000 of immediate cash to meet the pressing needs of survivors. Under pending legislation, this amount would not be taxed.

* Housing. Either rent-free government housing for 180 days or the military’s tax-free allowance for outside housing -- the value of which depends on the service member’s rank and the location -- is provided, plus travel and shipment of household goods.

* Burial costs. The government will reimburse up to $6,900 of expenses for a service member’s burial. Those who die while on active duty are eligible for burial at Arlington National Cemetery or other national cemeteries.

Under some circumstances, a military spokeswoman said, travel for next-of-kin in conjunction with the burial will be paid. In contrast with World War II, when many U.S. soldiers were buried overseas, she said that now every attempt is made to send the body to a burial site chosen by the family in the United States.

* Unused leave. Wages equivalent to all accrued leave are paid to the survivor.

* Dependency and indemnity compensation. The Department of Veterans Affairs pays a tax-free monthly amount to an unremarried surviving spouse of a service member who dies on active duty or from a service-connected disability. This is a flat-rate annuity of $948 per month, and an additional $237 is paid per dependent child. This is in addition to the life insurance.

The Defense Department estimated that under this program, a surviving 30-year-old spouse with a life expectancy of 50 more years may ultimately receive benefits of nearly $500,000, based on current rates, unless the spouse remarries.

* Uniformed services survivor benefit plan. Spouses and children of service members who are eligible for retirement at the time of their death may also be entitled to monthly payments based on a percentage of retired pay.

* Education benefits. The surviving spouse and dependents may also qualify for full-time education benefits from Veterans Affairs for as long as 45 months, although entitlement is dependent on various qualifying criteria.

In addition, families may be able to use tax-free education savings accounts to pay tuition at the military academies under pending legislation.

* Health care. Surviving spouses and dependents under 18 are eligible for full military active duty health care for three years after the member’s death, and dental insurance coverage, as well as health care available to military retirees after the three years pass.

* Commissary and exchange privileges. The surviving spouse and qualified dependents are eligible to shop at military commissaries and exchanges.

* Tax benefits. The next-of-kin of a service member whose death occurs overseas in a terrorist or military action is exempt from paying the decedent’s income tax on a joint return for at least the year in which the death occurred.