Typically, enrolling for FEGLI membership requires that you fill in s beneficiaries form and designate how benefits will be divided among any dependents you have. Nevertheless, after you get married, it is imperative that you change the terms of your policy. Doing so requires that you fill out Standard Form known as the Designation of Beneficiaries form. You can download a copy at www.opm.gov/forms.
Event # 2: Annulment, Divorce or Separation
Provisionally, you can appoint anyone as a recipient of your FEGLI proceeds immediately after your demise. For instance, you can change this designation to avoid a court assigning your proceeds arbitrarily. Use a Standard Form 2823 to do so. Whenever any of the above events happen, your lifestyle and insurance need change dramatically.
This is why you need to reevaluate your insurance status. Given that, you should change your coverage terms if you have any kids depending on you. If you are dependent on child support, stipulate that any life insurance policy you hold exclusively names as you as the dependent prevent your spouse changing its terms without your consent.
Event # 3: Death
If you are enrolled with FEGLI and possess a Standard Form 2823 all your FEGLI proceeds will be issued to one or more designated persons. However, if you don’t have this form, your proceeds will be distributed using the following precedence:
- Initially, to your surviving spouse
- If you don’t have a surviving spouse your children will receive these proceeds
- If none of the above is present, your deceased child’s share will be distributed to any of his dependents
- If all of the above are lacking, proceeds will be awarded to your estate’s administrator or executor and
- Finally, your next of kin is entitled to your proceeds if all of the above are absent
NB: in case your spouse dies, you automatically become the beneficiary covered under an Option C FEGLI policy.
Event # 4: Career Developments
As you grow older, you may have increased professional responsibilities accompanied by increased wages or a promotion. Besides that, you could quit employment or even start a business. Where this happens, it is accompanied by a change in your employer’s obligation towards your life insurance plan. Subsequently, be sure to evaluate your eligibility for life insurance with your new employer.
Additionally, you should consider converting your group insurance policy into an individual one. Despite this being expensive in the long term, it is the best decision for you. This is especially important where you have a terminal condition.
Retirement and Aging
Upon retirement, most federal employees often change their residential status. In case you own a house, you need to inform your insurer of where you will spend your time. Flood insurance policies typically cover residential use with changes in residence affecting the number of premiums you pay and coverage you’re entitled to. On the other hand, if you no longer commute to work on a daily basis, you will make significant savings on auto insurance premiums. Also, enrolling for a safe driving course can reduce your rates if you are 55 years of age and above.
There is no appropriate time to purchase life insurance. Instead, individuals should make assessments of their unique needs, financial status as well as any active policies they might have. Nonetheless, depending on your current life situation, it is important to consult with financial advisors who are specialists in analyzing complex insurance needs to help you identify a plan that meets your objectives.