Let’s Talk Federal Employee Life Insurance (FEGLI)
Federal Employees Life Insurance – FEGLI.
This is really great stuff. Ever so often I talk about being inspired by a conversation or a question I have been asked. I don’t know why I deserve so many flowers. Each time I am inspired by someone, I consider it a flower, a rare and precious gift because that what being gifted with knowledge is. Today I was coaching a Federal employee about her FEGLI coverage and received the most wonderful gift from her when she said, “Now I am a full grown woman and this is the first time in my life that life insurance has really been explained to me.”
I was happy she had gotten what she needed, but disappointed that my profession, Human Resource Management of which benefits fall, had not done its job. I am very sensitive about the role of Human Resources and its awesome responsibility to a workforce. It is the Office of Personnel Management (OPM) that is charged with human resources oversight for the entire Federal Government. It is not the State Department or Treasury. Those agencies have another mission. So when employees tell me that Human Resources has not filled in the knowledge gaps about their benefits, I get a little concerned.
The Federal employee who is one of the best strategists I have ever met, wanted to know the difference between term and whole life insurance. That’s a great question since the Federal Government offers term life insurance (FEGLI) as a part of the Federal benefits package. We had some light banter about what could be done to ensure employees had enough information about their benefits to make informed decisions. I suggested employees engage Human Resources offices more, inundate them with questions. She said what good will it do if they don’t know the answers to my questions. She further stated that the Federal Government lost a lot of institutional knowledge about 20 years back when a number of highly-trained HR specialists retired.
I am not going to agree or disagree with that premise. I will say that the employee’s premise is one of the strongest arguments I have heard to support the extreme importance of effective succession planning. Employees in organizations are supposed to be like perpetual revolving doors. As one leaves and another enters only the body is vacating the premise, it should not be the knowledge required to do a job and the guaranteed continuity of service provision that is vacating the premise. People are not indispensable, they just aren’t and it benefits no industry to act as if they are.
All employees should be respected in the workplace and treated with a great amount of dignity. Employees should be applauded for their skills and abilities and rewarded. However, no single employee should be in control of the conch (shell) as in the novel, Lord of the Flies. The conch represented order and structure. Having knowledge begets order and structure. When employees do not have the prerequisite knowledge, order and structure is at risk so evident when people leave organizations having not properly passed the torch of knowledge. The civilization is left in disarray and order and structure is sacrificed.
We look to the Federal Government for order and structure. Therefore, Federal employees must not accept the rationale that the people who knew the information are gone and all is lost, but must demand that information keeps flowing no matter who leaves the beach. I got the opportunity in the end to tell her very precisely the difference between term life insurance and whole life insurance. Very simply I told her that term life insurance tends to be less expensive than whole life and it does not have a cash value, Most importantly, its value decreases with age, except if you choose a no reduction option in your federal benefits. Whole life insurance has a cash value and can be more costly. It is better to get insurance when you are young because the older you are, the more premiums tend to cost because of risk associated with aging.
She also asked if she should purchase the Government’s long-term care (LTC) insurance. I told her that LTC becomes pretty pricey after age 50. I suggested she be a wise consumer and check costs on the open market, compare rates with what the Feds are offering and make a decision before age 50. I am most willing to share information because that is what my profession dictates. However, individual choices are just that. You should only make decisions based on whether it is a fit or not.
P. S. Always Remember to Share What You Know.
Dianna Tafazoli
Recommended Articles
For Postal Employees – LiteBlue and the TSP
Federal Retirement Benefit Analysis
Is The Pension Survivor Benefit Best For You? by Todd Carmack
A Little-Known Opportunity Can Increase Your Retirement Income. by Mark Sprague
