
The service flag or service banner is an official banner that family members of service members can display. The flag or banner is defined as a white field with a red border, with a blue star for each family member serving in the Armed Forces of the United States during any period of war or hostilities in which the Armed Forces of the United States are engaged. A gold star (with a blue edge) represents a family member that died during service, without specifying cause of death. The deceased might have been killed in action, or died due to unrelated causes.
The Institute Of Heraldry has published a "fact sheet" concerning service flags and service lapel buttons which are for use by family members of persons serving in the Armed Forces. http://www.tioh.hqda.pentagon.mil/FAQs/Factsheet.aspx
"Members of the immediate family" include wife, husband, mother, father, stepmother, stepfather, parent through adoption, foster parents who stand or stood in loco parentis, children, stepchildren, children through adoption, brothers, sisters, half brothers, and half sisters of a member of the Armed Forces of the United States. (Although not specifically designated this definition has been "expanded" to include Grandparents).
The Institute Of Heraldry has published a "fact sheet" concerning service flags and service lapel buttons which are for use by family members of persons serving in the Armed Forces. http://www.tioh.hqda.pentagon.mil/FAQs/Factsheet.aspx
"Members of the immediate family" include wife, husband, mother, father, stepmother, stepfather, parent through adoption, foster parents who stand or stood in loco parentis, children, stepchildren, children through adoption, brothers, sisters, half brothers, and half sisters of a member of the Armed Forces of the United States. (Although not specifically designated this definition has been "expanded" to include Grandparents).
History...

The history of the Service Flag is as patriotic and touching as the symbolism each star represents to the families that display them.
The service flag (also known as "blue star banners" or "son in service flags") was designed and patented by World War I Army Captain Robert L. Queissner of the 5th Ohio Infantry who had two sons serving on the front line. The flag quickly became the unofficial symbol of a child in service. President Wilson became part of its history when in 1918 he approved a suggestion made by the Women's Committee of the Council of National Defenses that mothers who had lost a child serving in the war to wear a gold gilt star on the traditional black mourning arm band.

This led to the tradition to cover the blue star with a gold star on the Service flag to indicate that the service member has died or been killed.
The color of the stars is also symbolic in that the blue star represents hope and pride and the gold star represents sacrifice to the cause of liberty and freedom.
Alongside the picture on the left is the following:
" My star in my flag, put there for my boy. Love him? Yes, more than I love my own life! Miss him? Why, my heart seems empty save for the ache in it. He finished his great fight-his fight to make his mother safe, and to make other mothers of the world safe for all time.
Yes, my star in my flag, my boy who fought for me, He rests now under the poppies of Flanders' fields, but God give me strength to look at this gold star and say, Not my will, but thine, O God, be done."
The color of the stars is also symbolic in that the blue star represents hope and pride and the gold star represents sacrifice to the cause of liberty and freedom.
Alongside the picture on the left is the following:
" My star in my flag, put there for my boy. Love him? Yes, more than I love my own life! Miss him? Why, my heart seems empty save for the ache in it. He finished his great fight-his fight to make his mother safe, and to make other mothers of the world safe for all time.
Yes, my star in my flag, my boy who fought for me, He rests now under the poppies of Flanders' fields, but God give me strength to look at this gold star and say, Not my will, but thine, O God, be done."