Should Supplemental Coverage in FEGLI B be Declined by Federal Employees?
Affordable group life insurance is offered by the federal government, just like many businesses in the private sector. The coverage that is well known as FEGLI or Federal Employees Group Life Insurance, has quite a number of limitations that are significant and as well as advantages that are quite distinct. Let’s see why it could be better to privately purchase a supplemental coverage and why basic coverage in FEGLI is a good option.
FEGLI’s basic life insurance coverage amounts to $2000 plus one year of base pay rounded off to the next thousand. This group life benefit, in particular, is 33% subsidized by the government and has no medical exam. Currently this basic benefit priced at .15 per thousand of coverage in every pay period is not connected to the insured’s health status or age. In addition, at the age of 35 the basic plan the basic plan is supplemented free of charge with a 10% increment in benefit each year until it is removed at the age of 45.
Federal employees have the option of increasing their coverage and as well that of their family members beyond the basic coverage. The first option will add $10,000 to the benefit amount which is then priced in 5-year brackets and goes up at age 55. The second option gives you room to add up to five times base salary to the insurance amount; this option is based on your current age and shifts in intervals every five years. The third option gives some coverage for dependents and spouses in multiples of $2,500 and $5,000 respectively. The costs also adjust in 5-year increments just like in the first and second options.
Seeing as the basic plan cost per thousand dollars of coverage is not expensive, and until retirement, it is not affected by age, the major decisions mainly circle around the second option, and the main reason to use this option is the ease of implementation when enhancing your coverage. The premium is simply deducted from the payroll if you choose additional coverage within the period of 60 days and that there are no health requirements.
If you miss the 60-day window period, you will either have to wait for the very rare open season that is usually declared by OPM, wait for a life event like a child, death of a spouse, or at your own expense provide evidence of good health.
Independent Agents & Health Concerns
You will need to take a para-medical exam where samples of urine and blood are taken if there’s a possibility that you have some health issues seeing as the no exam option is mostly singled out for applicants that are healthier. It is wise to weigh your options with an independent agent. This is because life insurance holders are different and thereby have different needs for specific health risks.
If your health rating brings you concern, it might be smart to elect FEGLI then look around in the marketplace and once you have a better policy set in place you can always cancel coverage. Your decision about the second option in FEGLI is completely a personal decision and should be largely determined by your health.
