Federal Employees Group Life Insurance
The Federal Employees Group Life Insurance or FEGLI is a group life insurance program aimed at providing benefits of insurance to the federal employees.
When to Use the FEGLI Calculator
First published on CompareFEGLI.com
When to Use the FEGLI Calculator
You won’t often be called upon to calculate your coverage amount and premium for your Federal Employees’ Group Life Insurance (FEGLI) life insurance.
There are three reasons why you might need to use the FEGLI calculator. The first time will be when you are hired as a federal employee, and then on the rare occasion that you get to modify your FEGLI coverage amounts and options.
For the record, this is only possible when there is a FEGLI Open Season, or when you are able to submit evidence of a qualifying life event (QLE) that makes you eligible to modified FEGLI coverage and options.
The third time you will need the FEGLI calculator is when you retire. FEGLI rates and coverage change quite a lot post-federal retirement, so you will need to know the changed premiums and reducing coverage amounts.
How to Use the FEGLI Calculator…….. Read More
Other FEGLI Articles
What is FEGLI Option A, Option B and Option C?
Evaluating your life insurance policy by Todd Carmack
Converting FEGLI to Individual Life Insurance After Separation From Federal Service
FEGLI – Federal Life Insurance Living Benefits Guide
First Published on CompareFEGLI.com
FEGLI Life Insurance Living Benefits Guide
One of the things you need to know about the Federal Employees Group Life Insurance (FEGLI) program is the availability of living benefits.
FEGLI offers a living benefit to federal employees and retirees who are terminally ill with a medical prognosis of less than nine months in life expectancy.
If you happen to be in this unfortunate situation, you should know that there are different rules on how you can claim FEGLI living benefits, depending on whether you are still a federal employee or annuitant already in retirement.
For starters, you should know that the Living Benefit is equal to your FEGLI Basic insurance coverage. Current federal employees can choose between READ More….
USPS Life Insurance For Postal Employees Through FEGLI
Initially published on CompareFEGLI.com
USPS Life Insurance For Postal Employees Through FEGLI
USPS life insurance for Service employees is provided through the Federal Employees Group Life Insurance (FEGLI) Program.
The USPS will pay 100 percent of the cost of your Basic life insurance cover, and you pay 100 percent of the cost of optional insurance components.
Basic life insurance through FEGLI is equal to your salary rounded up to the next even thousand, plus two thousand dollars. Unless you explicitly waive it, new Postal Service employees automatically get signed up for Basic FEGLI life insurance cover without having to go through a physical or face any other eligibility issues.
FEGLI Options For USPS Employees & LiteBlue
FEGLI options include FEGLI Option A, Option B and Option C. FEGLI Option A – Standard provides additional coverage of $10,000. FEGLI Option B allows Postal Service employees to add coverage equaling up to five units or multiples of your annual rate of basic pay.
Why Wait For FEGLI Open Season?
First Published on CompareFEGLI.com
Why Wait For FEGLI Open Season?
Federal employees often realize after the fact that the 
Federal Employees Group Life Insurance (FEGLI) coverage they opted for as new federal employees was insufficient, and they now need to enhance coverage.
A popular misconception in this regard is that you either have to be a new federal employee or wait for the next FEGLI Open Season to make changes to the FEGLI options you signed up for.
In case you aren’t aware of what it is, the FEGLI Open Season is a rare bird that has only made itself available twice in recent years – in 1999 and 2004. All told, there have only been nine FEGLI Open Season events held since 1954.
During a FEGLI Open Season, federal and USPS employees are able to…. READ More….
More FEGLI Articles
What is FEGLI Option A, Option B and Option C?
Evaluating your life insurance policy by Todd Carmack
Converting FEGLI to Individual Life Insurance After Separation From Federal Service
What are FEGLI Option A, Option B and Option C?
Initially Published On CompareFEGLI.com
What is FEGLI Option A, Option B and Option C?
It’s not uncommon for young federal employees to simply follow defaults when it comes to the options for Federal Employees Group Life Insurance (
). After all, government retirement is not even on the horizon, and federal employees insurance is just one of those pesky payroll deductions the government collects from you.
But the fact of the matter is that it does make a big difference later on, and the best way to handle it is to understand all the FEGLI options right from the start. To be specific, you need to find out what is FEGLI Option A, Option B and Option C.
Coverage under Basic FEGLI is adjusted annually based on your salary and your age, and will provide…. READ More…
Other FEGLI Articles
Evaluating your life insurance policy by Todd Carmack
Converting FEGLI to Individual Life Insurance After Separation From Federal Service
Converting FEGLI to Individual Life Insurance
First Published on CompareFEGLI.com
Converting FEGLI to Individual Life Insurance After Separation From Federal Service
One of the outstanding perks of federal employment is the coverage you get under the Federal Employees Group Life Insurance (FEGLI) program. By the same token, it’s also really helpful to have FEGLI coverage when you separate from federal service and have to convert to an individual policy or policies (for family members).
It’s best to plan ahead for this event, so that you know what kind of options you have for converting to an individual policy, and whether you should make use of this facility.
FEGLI coverage terminates as you leave federal employment, but you get a 31-day extension as free coverage. On the day after this grace period… READ More…
Other FEGLI Articles
What is FEGLI Option A, Option B and Option C?
Evaluating your life insurance policy by Todd Carmack
Converting FEGLI to Individual Life Insurance After Separation From Federal Service
Who Gets Your FEGLI Life Insurance Benefits When You Die?
Initially published on CompareFEGLI.com
Who Gets Your FEGLI Life Benefits When You Die?
One of the most critical issues that you need to be clear about when it comes to your Federal Employees Group Life Insurance (FEGLI) coverage is your beneficiaries.
Specifically, the question here is about who gets your FEGLI life insurance benefits when you die? It’s quite simple, once you know the particular order in which the Office of Federal Employees’ Group Life Insurance (OFEGLI) will pay your life insurance benefits.
The first thing that will be considered is READ More…
FEGLI Turns 61
FEGLI Turns 61
The Federal Employee’s Group Life Insurance Program (FEGLI) turns 61 this August. With over 4 million participants, FEGLI is the largest group insurance program in the world. With this big birthday coming up, a few things bear reminding:
FEGLI is a group term policy, which means that the policy does not earn any cash value (like whole life policies.) According to the FEGLI handbook, most new federal employees automatically receive enrollment in FEGLI upon hiring. If you do not wish to pay the FEGLI premium required, you can speak with your human resources office to opt out of FEGLI coverage.
Federal Employees can opt to participate in the basic FEGLI coverage plan and choose optional life insurance programs. In order to choose an optional FEGLI program you must have at least basic FEGLI insurance coverage through the FEGLI program.
The basic FEGLI program face value is equal to your annual salary, rounded up to the nearest $1000 plus an additional two thousand dollars. (If you made $50,600 per year, the face value of your policy would be $53,000.) You are responsible for 2/3 the cost of the FEGLI premium, the government foots the other 1/3 of the bill.
FEGLI Extra Benefit
Federal Employees under the age of 35 qualify for an “Extra Benefit.” This benefit doubles your coverage at no cost to you. Once you turn 35, the additional FEGLI coverage drops 10 percent each year until you reach 45. Employees can also choose to add an additional $10,000 to their face value or add an addition 1 to 5 times their annual salary to the face value of your policy through FEGLI Option B.
Additionally, retired federal employees may continue to receive coverage under the policy if they maintained basic FEGLI coverage for at least five consecutive years prior to the retirement date. There are several different options for retired employees including a 75 percent, 50 percent and no reduction options. If you choose either the 75 percent of 50 percent reduction plan; your FEGLI premium will decline (or disappear) as well.
Federal Employees reaching retirement age can choose to assign their FEGLI insurance to another party. Essentially, you could transfer ownership of the policy to any individual as part of your estate planning. This is a permanent decision; once you assign your FEGLI policy, it is done. You will not be able to change the beneficiary or cancel your policy.
Cashing Out You FEGLI
Retiring federal employees may also cash out their basic FEGLI is a doctor has diagnosed them with a terminal illness. You cannot exercise both special options, only one. Additionally, there are a few options for receiving your living benefit. You can have all of your benefits cashed out or you can select a partial benefit.
The Federal Employees Group Insurance Plan is widely considered one of the most stable federal benefits programs. Since its inception, the government has amended it nearly 60 times! While extensive amendments have been made over its 61-year history, the revisions help adjust to changing working circumstances. The last amendment too place in October of 2008 and added a clause that allowed coverage from some civilian employees working on military operations.
To learn more about specific FEGLI rules, regulations and amendments, check out the FEGLI handbook.
You may also wish to read more on FEGLI through these resources
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
Understanding Your FEGLI Coverage, by Todd Carmack
As a benefit counselor and retirement income specialist, I have come to realize that a lot of employees do not remember what they signed up for or understand their federal employee group life insurance (FEGLI) coverage.
Basic FEGLI Coverage
Basic FEGLI coverage, if elected, FEGLI Basic coverage provides a death benefit based on your gross salary, rounded up to the nearest thousand and then $2000 is added to that figure. Example, if you make $51,486, your death benefit would be $54,000. At age 65, Basic FEGLI coverage becomes free and the coverage will reduce down by 2% per month until it reaches an ultimate reduction to 25%.
Employees do have the option to elect NO FEGLI Reduction or a 50% FEGLI Reduction. If elected, there is a premium payment required to maintain your FEGLI coverage.
FEGLI Option A
FEGLI Option A is a flat $10,000 death benefit. At age 65, coverage is free and will reduce by 2% a month until it reaches $2500.
FEGLI Option B
FEGLI Option B is optional FEGLI coverage provides 1,2,3,4,or 5 times your annual salary as a death benefit. Example – if your salary was $51,486, and you chose 5 times your salary, your death benefit would be $260,000 ($52,000 x 5). This option can become very costly after the age of 50. The cost or ‘premium’ paid to maintain FEGLI almost doubles every 5 years. At age 65, you may elect to reduce coverage by 2% a month for 50 months until it reaches 0, or continue to pay premiums.
Because of the higher premium costs after age 50, it may be in the employee’s best interest to consider looking for a level term insurance plan in order to reduce the monthly premium over time. A great resource I’ve found for reducing your FEGLI expense is www.CompareFEGLI.com.
FEGLI Option C
FEGLI Option C is optional coverage provides a death benefit for your spouse and eligible dependent children (under age 22). There are multiples of 1-5 available. The FEGLI coverage amount is increments of $5000 for spouse and $2500 for each child. Example – if you chose a multiple of 3, there would be $15,000 of coverage on spouse and $7500 coverage on each child.
At age 65, you may choose to reduce coverage by 2% per month until it reaches 0, or continue to pay premiums.
About the Author
Todd Carmack
Arizona
Other Todd Carmack Articles
Understanding The Thrift Savings Plan, by Todd Carmack
Social Security for FERS Employees, by Todd Carmack
Is The Pension Survivor Benefit Best For You? by Todd Carmack
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FEGLI – Questions to Ponder
FEGLI Questions to Ponder
We have discussed life insurance provisions offered via FEGLI (Federal Employee Group Life Insurance). OPM is responsible overall for providing the life insurance benefit to federal employees. OPM contracts with MetLife to process FEGLI claims among other important responsibilities, but OPM has your records and is able to tell you about your FEGLI coverage, but they are not able to provide you advice about how much insurance you should have.
Throughout our posts on FEGLI, the resounding theme has been centered around the questions of how much life insurance is needed to protect your loved ones and what do you want the life insurance to do for you and your family. The sample questions below might assist you in taking care of the final business of your life as you plan to retire well.
Questions You Should Ask;
• Financial experts say for my family’s security, my death benefit should replace my current income. How does my current FEGLI death benefit compare to this statement? Is this an area I need to evaluate more closely?
• How early in my career should I find a financial expert who understands my federal retirement benefits, including my FEGLI coverage? (its never too early).
• Have I thought about trying to determine the kind and amount of FEGL coverage I need in order to meet the goals I have set? Is there a cheaper option than FEGLI, how can I compare FEGLI against other options?
• Financial experts say that life insurance coverage should be 10 to 20 times your annual salary. How often should I evaluate my own insurance coverage to see where I stand?
• Do I have enough coverage to pay for my funeral expenses without placing a burden on my family and will I have some left to provide a cushion for my family?
• What should my FEGLI cover to help take care of my funeral costs and other expenses?
• Have I considered the high costs of funeral and burial arrangements and how I might lower the costs by looking into pre-funeral plans as part of the process of planning to retire well?
• Have I looked at my debt to FEGLI death benefit ratio? Even if I have good coverage is my debt so high that it will eat up the benefit and leave my family strapped?
These are simply sample questions about FEGLI that you should ponder and some food for thought to assist you in planning your federal retirement.
P. S. Always Remember to Share What You Know.
RELATED TOPICS – More Federal and Postal Insurance Information
Federal Employees Health Benefits (FEHB)
Federal Flexible Spending Account (FSAFEDS)
Federal Long Term Care Insurance Program (FLTCIP)
Federal Employees and Medicare
Federal Employee Dental and Vision Insurance Program (FEDVIP)
An Economically Changing World
The world is changing. As Federal and Postal employees we face more economic challenges today than the majority of the current workforce has ever witnessed. The hardships of the Great Depression, we either read about in textbooks or heard stories from parents and grandparents, but hardly a reality for baby boomers and beyond.
Over the past several years, the reality of our finances and the turbulence of a global economy is a constant conversation at the average Federal and Postal employee’s families dinner tables. Yet, our responsibility, regardless if we are CSRS or FERS, to do what is necessary to face a retirement future with readiness, still remains. I remember parents saying, “Save for a rainy day.” The economic uncertainty of our times requires that we save for a tsunami. The cost of maintaining our standard of living is much higher today than it was for our parents.
In addition, economically, conditions have created differing and varying levels of responsibility for Federal and Postal retirees. Retirement incomes are increasingly being shared to support other family members, including adult children who are either unemployed or under-employed. Providing support to family members is what we do as Americans until they can get on their feet.
Because our plates are fuller than ever before in recent times, planning for a long life after retirement must be approached with care and a deliberate commitment to live well below our means. We can no longer economically live at our means and certainly not above our means, but below them in order to have a cushion of economic longevity. Remember, economically, the goal is to have your resources outlast you.
The technical aspects of the federal and postal employees’ retirement system from FEHB, Medicare, to FEGLI and your TSP are difficult to understand and much more difficult to master. There are such a vast number of technical pieces of the federal retirement system it seems to justify the use and consultation of both your HR office or a qualified retirement benefit expert.
Use PSRetirement.com’s easy access for more information on your TSP Account and Login information.
P. S. Always Remember to Share What You Know.
FEGLI – Option C
~~FEGLI – OPTION C
We are just about done. We have discussed the terms of Basic Life Insurance, Option A-Standard Insurance and Option B- Additional Insurance. Let’s continue with the discussion – FEGLI Option C –Family Insurance.
Many of the same provisions in Option B are also applicable in FEGLI Option C. For example, individuals 65 years of age or older at retirement will be contacted by OPM very soon after retirement. Individuals who retired before reaching age 65 will be contacted by OPM a short time before they reach age 65 to discuss elections.
Individuals with Option C – Family coverage can choose either Full Reduction or No Reduction for each separate multiple. The decision might be to choose No Reduction for some multiples and choose Full Reduction for the remaining multiples.
If you choose Full Reduction and you retired before April 24, 1999, two months after you reach age 65 or your retirement date which ever comes later, on the first day of the second month; Option C will decrease by 2 percent of the original face value every month for 50 months. After that time, coverage will cease. Premiums will be withheld from your annuity until the month in which you reach age 65.
If you elect to keep some or all multiples under No Reduction, adjustments to your premium will be made to reflect the election made.
It is always a good idea to check and double check your choices to make certain you are satisfied with the options you have chosen.
P. S. Always Remember to Share What You Know.
RELATED TOPICS – More Federal and Postal Insurance Information
Federal Employees Health Benefits (FEHB)
Federal Flexible Spending Account (FSAFEDS)
Federal Long Term Care Insurance Program (FLTCIP)
Federal Employees and Medicare
Federal Employee Dental and Vision Insurance Program (FEDVIP)
FEGLI OPTION B – Additional Insurance
FEGLI: Option B – Additional Insurance
Let’s take our time in walking through the provisions of FEGLI Option B, which can be a bit more involved than Option A- Standard Insurance and Basic Life Insurance. If you are considering maintaining life insurance coverage into your later working years and certainly into retirement, you NEED To know about your FEGLI Option B and what other comparisons might be available for you.
FEGLI Option B: There is no minimum coverage for Option B. The coverage is simply calculated on the stated salary of the employee with no minimum ($10,000) as it is in the case of Basic Insurance. If an employee’s salary is less than $10,000, the FEGLI basic insurance amount (BIA) of coverage would still be $10,000 under Basic Life Insurance.
The cost of Option B Additional insurance is the responsibility of the retiree. Retirees have the option as of April 24, 1999, to elect to make an Option B reduction. If you are age 65 or older at retirement you will be contacted by OPM about making your elections not long after you retire. Retirees who retire prior to reaching the age of 65 will be contacted by OPM concerning their elections shortly before they reach age 65.
If you are older than 50 it is incredibly important that you compare FEGLI rates against other life insurance options. FEGLI rates rise dramatically after a certain age and you will almost certainly be able to find a cheaper policy over the long run. If you plan to hold insurance into retirement (and many people do, especially those who want to protect their loved ones) then a great way to enhance your retirement is to compare your FEGLI rates and reduce your costs – “a penny saved…..” This holds true for both Federal and Postal employees. You should compare your FEGLI Rates online by searching for FEGLI comparisons and/or FEGLI Calculators to find out what other options are available for you. You may also want to find a local insurance professional that is knowledgeable in your benefits prior to making your final selection (almost always a good idea).
Whether you are 65 or older at retirement or have not yet reached age 65 the option to elect Full Reduction or No Reduction for each separate multiple is within your right. Let’s demonstrate what is meant by choosing Full Reduction or No Reduction for each multiple separately. Individuals choosing Additional Insurance – Option B can choose 1, 2, 3, 4 or 5 multiples of their annual rates of basic pay. If the basic pay is $68,595 rounded to the next $l, 000, then each multiple is valued at $69,000. You might decide to choose No Reduction on 3 and Full Reduction on the remaining 2 or visa-a-versa.
For those multiples you elect a Full Reduction, two months after you reach age 65, on the first day of the second month or on your retirement date which ever comes last, your Option B Full Reduction multiples will decrease by 2 percent of the original face value each month for a total of 50 months and then the coverage will end. Premiums will be withheld from your annuity until the end of the month in which you reach age 65.
If you choose No Reduction upon reaching age 65 or at retirement whichever comes last, then the premiums withheld from your annuity will be adjusted to reflect the number of multiples you have chosen. You have the option to choose No Reduction on some or all multiples. You have the same choices whether you choose Full Reduction or No Reduction on some or all of your multiples. If there are multiples that you do not choose or indicate No Reduction, then those multiples will begin to decrease by 2 percent of the original face value each month for a total of 50 months and then the coverage will end.
The best way to gain satisfaction from the choices you make as you prepare for retirement is to take it one step-at-a-time, making sure you understand all of your options completely. If you still have questions, you are at the right place to get them answered while you are still an active employee. The only questions about FEGLI that are not valuable are the ones you don’t ask.
P. S. Always Remember To Share What You Know.
Click HERE for information on FEGLI
Click HERE for information on Option B
Click HERE for information on Financial Planning
FEGLI – Option A – Standard Insurance
FEGLI – Option A
FEGLI Option A – Standard Insurance has a face value of $10,000 when you retire. However, if you retired before October 30, 1989, your Option A insurance might have been slightly higher. If you have FEGLI Option A- Standard Insurance, it will begin to decline or decrease in value at the rate of 2 percent each month starting approximately 2 months after you reach age 65 or at retirement, whichever comes later.
As such the value of your FEGLI Option A-Standard Insurance will continue to decrease until it reaches 25 percent of the original face value or $2500. The $2500 amount or 25 percent of the original face value $10,000 under Option A will be the value of your insurance upon your death.
Unless you cancel your FEGLI Option A-Standard Insurance, premiums will be deducted from your annuity through the end of the month in which you reach age 65. If your birthday comes on February 2, and you are turning 65 years of age, then the premiums will be deducted until the end of February, after which they will cease.
Take your time in reviewing your options and what they entail for you in retirement as you build your arsenal of facts and options to retire well.
P. S. Always Remember to Share What You Know.
RELATED TOPICS – More Federal and Postal Insurance Information
Federal Employees Health Benefits (FEHB)
Federal Flexible Spending Account (FSAFEDS)
Federal Long Term Care Insurance Program (FLTCIP)
Federal Employees and Medicare
Federal Employee Dental and Vision Insurance Program (FEDVIP)
Are You Clear On FEGLI
FEGLI Recap
~~We are going to continue our discussion on making certain the provisions of FEGLI are clearly and completely understood. We discussed FEGLI Basic Insurance for those persons who retired before December 9, 1980, and before January 1, 1990.
Now let’s look at some other important time frames impacting Federal and Postal employees who retired after December 31, 1989 and going forward. Employees falling within this time category must all either elect the 75 percent reduction, the 50 percent reduction or No Reduction. Whatever your choice, if you retire before reaching age 65, you will be obligated to pay the same premium for your BASIC FEGLI as you did as an active employee until you reach age 65.
As in our previous posts, we are going to discuss each election separately starting with Option A – Standard FEGLI. Option A- Standard Insurance was previously referred to as Optional Insurance. Discussing the elections separately will hopefully allow you to analyze each provision and eliminate the confusion often encountered when one is saddled with reviewing too many things at once.
Let’s begin with Option A- Standard Insurance in the post to follow.
For information on FEGLI Option A
For information on FEGLI Option B
For information on FEGLI Option C
P. S. Always Remember to Share What You Know.
FEGLI- 50% Reduction Election
50% FEGLI Reduction
Now that we have a better and clearer understanding of the 75 percent reduction election, let’s talk about the 50 percent reduction election under the same time periods.
If you elected the 50 percent reduction under your BASIC life insurance, the face value with begin to decrease at 1 percent every month also beginning with the second month after you reach age 65 or your retirement date or whichever is later.
Your FEGLI BASIC life insurance (watch the video) under the 50 percent election will continue at the rate of 1 percent each month until it reaches 50 percent of the original face value. This election’s coverage is not free, and the premiums must be paid for out of your annuity starting at retirement and continuing for as long as you live.
The only other FEGLI reduction election you can make outside of the 75 and 50 percent elections is NO REDUCTION. If you chose the NO REDUCTION election, the full face value or the original amount of your BASIC life insurance will remain the same even when you reach age 65. Premiums are withheld from your annuity starting at retirement until the end of your life to take care of the additional coverage.
I think we can exhale and get ready to discuss our reduction election choices for dates impacting the majority of federal and postal employees who retired after December 31, 1989, and going forward.
For more information on FEGLI read this
P. S. Always Remember to Share What You Know.
RELATED TOPICS – More Federal and Postal Insurance Information
Federal Employees Health Benefits (FEHB)
Federal Flexible Spending Account (FSAFEDS)
Federal Long Term Care Insurance Program (FLTCIP)
Federal Employees and Medicare
Federal Employee Dental and Vision Insurance Program (FEDVIP)
FEGLI – 75% Reduction Election
FEGLI: 75% Reduction
There are some dates or time periods that are important when discussing FEGLI. Although, we are clearly in the year 2014, I am still going to discuss dates prior in the event retirees or family members of retirees are a bit unclear about what is happening with the life insurance carried into retirement from the federal service.
If you retired prior to December 9, 1980, your BASIC FEGLI coverage (watch the video) begins to decrease by 2 percent of the face value every month starting with the second month after you reach the age of 65 or when you retire whichever comes later. The decrease in face value continues until it reaches 25 percent of the original face value. The coverage is free.
If you retired on after December 9, 1980, but prior to January 1, 1990, you would have elected a reduction of 75 percent, 50 percent or No Reduction. This is where we can be clearer so that there is a complete understanding of the elections with no confusion.
Let’s talk about what the 75 percent reduction election means. If you chose the 75 percent reduction during the periods outlined, your BASIC life insurance will begin to decrease in face value by 2 percent every month starting with the second month after you turn 65 or your retirement date, whichever is later. The decrease is ongoing until it reaches 25 percent of the original face value. This insurance coverage is free for you. You pay no premium.
I am a huge proponent of – it is easier by the inch than the mile. For that reason, I am going to discuss each percentage reduction election separately. I think we will have a better understanding if we do it that way. Agreed?
P. S. Always Remember to Share What You Know.
RELATED TOPICS – More Federal and Postal Insurance Information
Federal Employees Health Benefits (FEHB)
Federal Flexible Spending Account (FSAFEDS)
Federal Long Term Care Insurance Program (FLTCIP)
Federal Employees and Medicare
Federal Employee Dental and Vision Insurance Program (FEDVIP)
More On FEGLI
Each time I think I have said enough about FEGLI, someone or something always reminds me that I have not, or at least I could be a bit clearer on certain aspects of FEGLI.
Over the weekend, a friend called for some advice on her pending retirement. We started to talk about FEGLI (watch the video) and her understanding of elections and goals for life insurance. Right off, she wasn’t sure about what she had and how it worked and if she elected reductions or named a beneficiary(s).
The point being she is about 4 months from deciding on an exact date to retire and one of the most important aspects of her planning process remains vague. There is no denying, there is no easy way of getting around understanding your benefits and what they mean in retirement. She is doing the right thing; she is talking NOW about what she does not understand about her benefits.
Many employees are missing out on a great opportunity to engage their human resources offices and gather as much information as possible about their benefits in retirement. Your agency human resources office has your folder and they can answer so many critical questions and help you via the wonderful online calculators and e-tools to estimate what your annuity from your years of service will look like in retirement.
Another important issue she unearthed was not having a full understanding of her TSP being separate from the pension (annuity) she would receive upon retirement. She also did not have a clear understanding of whether she had named a beneficiary on her TSP account.
Some of her issues were easy to resolve. First, if you are planning to retire, you should not bother yourself about whether you named a beneficiary or even who it was. So many changes take place in our lives over the course of our work careers that the easiest approach to the beneficiary question – is to do a completely new set of forms as part of your retirement check-up list.
Many of us enter into the federal service very young and we make our choices and designations, often not revisiting those forms for a very long time, if ever. This was certainly the case with my friend, even some of the designees she named had passed away.
Getting ready for retirement is a huge undertaking so wherever you can simplify the process, do it. Take the fuss out of what you did not do and what you thought you did and just complete a whole new set of forms for FEGLI. Also contact the Thrift Savings Plan (TSP) and complete a new set of forms with the TSP as well.
We are going to discuss and clarify a couple of things about FEGLI to follow.
P.S. Always Remember to Share What You Know.
RELATED TOPICS – More Federal and Postal Insurance Information
Federal Employees Health Benefits (FEHB)
Federal Flexible Spending Account (FSAFEDS)
Federal Long Term Care Insurance Program (FLTCIP)
Federal Employees and Medicare
Federal Employee Dental and Vision Insurance Program (FEDVIP)
FEGLI – The Order of Precendence
FEGLI: Order of Precedence
Now that we have discussed how a death claim will be paid. Let’s discuss to whom the death benefit will be paid. The Federal Government uses what is termed an Order of Precedence. The FEGLI Order of Precedence has no attachment to your Will. The Federal Government does not get involved in Wills and Probate. Instead, if there is no assignment of your FEGLI (Life Insurance) and no valid court order exists then the order is as follows ranging from first to sixth and in that order:
1. Designated FEGLI Beneficiary(s).
2. If no designation – widow or widower
3. If neither 1 nor 2 exists, your FEGLI will pass to the child or children. If any child or children is deceased, then equal shares will be paid to the descendants of the deceased child or children. If minors are involved, then the court will usually appoint a guardian to receive payment for the minor children.
4. If the above situation does not exist, then to the parents in equal shares or the whole to the surviving parent.
5. If none of the conditions above exists, then to the administrator or executor of the estate.
6. If all five of the conditions do not exist, then the next of kin as designated by the State in which the deceased lived – not the state in which the deceased died.
When planning your retirement future, it is important to gather and understand as much information as possible. Discuss the information with family and loved ones you trust. You can also check with your HR office about your current beneficiary designations and possibly with a qualified local FEGLI expert who can help you with your insurance selections and decisions.
P. S. Always Remember to Share What You Know.
RELATED TOPICS – More Federal and Postal Insurance Information
Federal Employees Health Benefits (FEHB)
Federal Flexible Spending Account (FSAFEDS)
Federal Long Term Care Insurance Program (FLTCIP)
Federal Employees and Medicare
Federal Employee Dental and Vision Insurance Program (FEDVIP)
