Maintaining Your FEGLI Eligibility in Retirement by Robert YeszerskiFebruary 21, 2016 / by Robert Yeszerski
FEGLI information from Robert Yeszerski
Robert Yeszerski believes that if you are a federal employee and you’re considering retirement soon, you may be thinking about the type of life insurance protection that you should retain so that your loved ones will not be left with financial hardship upon your passing.
One way to ensure that you will have a certain amount of life insurance protection is to retain your FEGLI (Federal Employees Group Life Insurance) coverage – even after your employment ends.
In order to be eligible to keep these FEGLI benefits, you must have been enrolled in the plan for at least five years prior to your retiring. If you have not been in service for at least five years, then you should have been enrolled in the plan at least from your earliest opportunity to have enrolled.
Keeping FEGLI Coverage in Retirement
Provided that you do meet all of the required criteria and you opt to maintain your FEGLI coverage in retirement, you will have three options regarding what will happen with your coverage when you either turn 65 or you retire – whichever event occurs later. Your options will include the following:
- 75% Benefit Reduction – If you choose the 75% benefit reduction option, your basic FEGLI coverage will reduce by 2% each month until it reaches 25% of its initial amount. At that time, the coverage will remain level. There will then be no premiums due.
- 50% Benefit Reduction – By choosing the 50% benefit reduction option, your coverage will be reduced by 1% each month, until it reaches 50% of its original amount. There is an additional premium that will be due for this option, unless you opt to change over to the 75% option or cancel your basic coverage.
- No Benefit Reduction – With the no benefit reduction option, you are eligible to retain the full amount of your FEGLI coverage. This means that you will retain the same amount of basic coverage that you had when you ceased being enrolled as a covered employee in the plan. There is also a premium charged for this option, unless you switch over to the 75% reduction option or you cancel your basic coverage.
If you are not eligible to keep the FEGLI plan based on the five years of service requirement, but you would still like to retain your benefits, you may be able to convert your coverage into an individual plan. Otherwise, you will be required to drop the FEGLI coverage upon your retirement.
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