Once you've researched Alien Alloys, you will be able to research Personal Armour, which is a huge improvement over the standard coveralls.
Without armor, nearly every hit will be fatal; with personal armour, there's at least a chance of the soldier remaining unscathed, or being hospitalized only for days, rather than weeks or months. It can be researched quickly, is inexpensive, fast to produce, and much better than nothing. It is worthwhile to hand these out even if you expect them to be obsolete within a month.
Sell Value: $54,000
Due to a bug when units are spawned, soldiers wearing Personal Armour are treated as though they are wearing Power Armor when damage modifiers are applied -- but a Power Suit or better is needed against stun damage from smoke.