there are a couple things to consider.
there are categories for killed in action (KIA), at the general level (KIA), conflict level (World War I, KIA) and conflict/country level (World War I, KIA, United States of America). select the most specific one.
you can add these categories directly, or if you use the template, it will add an icon to the profile that can include more specific info, killed during battle of the somme, died when ship was sunk, etc, and it will add the category as part of the processing of the template.
there is also a generic died in military service category, which also has a template that can be used. this is for people who died of disease, accident, wounds, etc. died of wounds is considered to be someone who was injured on the battlefield, was transported to a medical facilty, and died afterwards as a result of those injuries.