Tag: Federal life insurance

federal life insurance

Federal life insurance is the life insurance offered to the employees by the federal government of the United States.

FEGLI Death Benefits Claim Guide

FEGLI Death Benefits Claim Guide

death benefits FIRST PUBLISHED ON COMPAREFEGLI.COM If you die while still covered by your FEGLI life insurance, your designated beneficiary or beneficiaries need to file a claim for FEGLI death benefits. The following links contain useful resources to aid beneficiaries in how to pursue these benefits.   READ MORE:

 

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FEGLI – Federal Life Insurance Living Benefits Guide

 

Reemployed Annuitants and FEGLI

FIRST PUBLISHED ON COMPAREFEGLI.COM

FEGLI For Reemployed Annuitants

annuitantsSo you decided to hang up your federal employment boots and enjoy retirement benefits such as FEGLI for annuitants. But then you get lured back into the federal workforce, whether by want or need or the call of duty. Whatever the reason, one of the things you have to sort out here will be about your life insurance coverage. READ MORE:

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FEGLI – Federal Life Insurance Living Benefits Guide

 

Pending Retirement Claims and FEGLI

FIrst published on COMPAREFEGLI.COM

FEGLI and Pending Retirement Claims

pending retirement

So you’re eligible for FEGLI and your life insurance coverage will continue when you are an annuitant after federal separation. But there’s a twilight zone in between the two, when your reettirement claim is pending. What happens to your coverage if you die in this twilight zone or if your insurance gets terminated? The following links discuss your pending retirement in further detail. READ MORE…

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Converting FEGLI to Individual Life Insurance After Separation From Federal Service

Who Gets Your FEGLI Life Insurance Benefits When You Die?

FEGLI – Federal Life Insurance Living Benefits Guide

FEGLI Eligibility: How to Request Reconsideration

First Published on CompareFEGLI.com

How to Request FEGLI Eligibility Reconsideration

Most federal and Postal Service employees are automatically enrolled into the Federal Employees Group Life Insurance (FEGLI) program when they are first hired. However, in the rare case that there is some confusion over your FEGLI eligibility for federal life insurance and you are not enrolled, it may be incumbent on you to request reconsideration. The following links contain more information about FEGLI eligibility. Be sure to use every resource at your disposal. READ MORE…

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Converting FEGLI to Individual Life Insurance After Separation From Federal Service

Who Gets Your FEGLI Life Insurance Benefits When You Die?

FEGLI – Federal Life Insurance Living Benefits Guide

 

FEGLI Insurance Cancellation and Reversal of Cancellations

First published on CompareFegli.com

FEGLI Insurance Cancellation and Reversal of Cancellations

Insurance As a new federal employee, you are automatically enrolled into the Federal Employees Group Life Insurance (FEGLI) program. You can, of course, specifically provide a waiver that lets you cancel your enrollment.

But before you do so, it might be a good idea to understand the implications. READ MORE…

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FEGLI – How to Reduce the Costs of Your Life Insurance?

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How (FEGLI) Federal Employees’ Group Life Insurance Program Works

How to Change Your Benefits Under the Federal Employees’ Group Life Insurance (FEGLI) Program

Why Compare FEGLI at Age 45

 

Individual Responsibilities of FEGLI Enrollees

First published on CompareFEGLI.com

Individual Responsibilities of FEGLI Enrollees

When you join federal employment, you are automatically enrolled into the insurance (FEGLI) program. So you don’t really have anything much to do as far as shopping around to buy life insurance is concerned. READ MORE…

 

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How (FEGLI) Federal Employees’ Group Life Insurance Program Works

How to Change Your Benefits Under the Federal Employees’ Group Life Insurance (FEGLI) Program

Don’t Fall For FEGLI Discounts

First published on CompareFegli.com

Don’t Fall For FEGLI Discounts

Postal

and Postal Service workers enrolled in the Federal Employees’ Group Life Insurance (FEGLI) program to shop around for savings or look for other similar life insurance products that give them the same protection and cover at a lower price.

But while doing so, it’s important to know that you cannot get any FEGLI discounts from any other insurer, or buy any supplemental insurance products that will lower your FEGLI rates and premiums.

FEGLI Discounts are unavailable because premiums are calculated based on government-wide rates and factor in your age, salary and individual enrollment in FEGLI options. Read More…

 

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Converting FEGLI to Individual Life Insurance After Separation From Federal Service

Who Gets Your FEGLI Life Insurance Benefits When You Die?

FEGLI – Federal Life Insurance Living Benefits Guide

FEGLI Handbook and Booklet For Federal Employees

 First Published On CompareFEGLI

FEGLI Handbook and Booklet For Federal Employees

The FEGLI Handbook is probably the best resource for both OPM and agency insurance officers looking for information about the Federal Employees Group Life Insurance (FEGLI) Program.

The 248-page handbook starts with an introduction about what is FEGLI and provides a brief overview of all the aspects and options of the program.

You are then taken through a series of chapters about the responsibilities of the OPM, OFEGLI, the employing federal agency, and the insured federal employee.

For the record, Read More…

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FEGLI – How to Reduce the Costs of Your Life Insurance?

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How to Change Your Benefits Under the Federal Employees’ Group Life Insurance (FEGLI) Program

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FEGLI Basic and Options Reductions After Federal Retirement

First Published on CompareFEGLI.com

 FEGLI BFederal Retirementasic and Options Reductions After Federal Retirement

One of the many things that kicks in with federal retirement is a reduction in your FEGLI life insurance coverage. It’s important that you understand how the Federal Employees’ Group Life Insurance (FEGLI) Program is designed to reduce the cover for retirees in a phased manner.

The reductions kick in at the start of the second month after your 65th birthday, or the beginning of the second month following the date of your retirement, whichever comes later.

You must choose what happens at this point. As far as FEGLI Basic life insurance is concerned, you have three options. The first option is a 75 percent reduction that reduces your cover amount by two percent each month until it hits 25 percent of your pre-retirement FEGLI Basic amount. At this point, your FEGLI Basic becomes free (no premiums) and will stay at this level until your death.

The second option is…..Read More

 

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DFAS Servicemember’s Group Life Insurance (SGLI)

DFAS Servicemember’s Group Life Insurance (SGLI)

Group Life InsuranceServicemember’s Group Life Insurance (SGLI) is the Defense Finance and Accounting Service (DFAS) version of the Federal Employees Group Life Insurance (FEGLI) program.

SGLI offers low cost group life insurance for service members on active duty, ready reservists and National Guard members, cadets and midshipmen of the four service academies, and certain other federal employees.

Eligible service members and federal employees can buy SGLI coverage in increments of $50,000, up to a maximum of $400,000. Note that you do not need to apply for coverage. Those eligible are automatically enrolled in SGLI, same as FEGLI.

All enrollees have to pay a monthly SGLI premium that is deducted from your base pay. The basic SGLI premium rate is 7 cents per $1,000 of insurance coverage, regardless of age and other factors. So for $400,000 in coverage, you pay a monthly premium of $28.00.

You can make changes to SGLI coverage, including declining it or opting for a lesser amount, designate a beneficiary, etc.

Service members leaving the military will get 120 days of free coverage, which can be extended for up to two years if the enrollee is totally disabled at separation. At that point, you have two options – either convert your SGLI to a VGLI policy for veterans, or into a commercial life insurance policy.

Converting SGLI to a commercial policy has to be done within 120 days from the date of separation. If converting to VGLI, you must submit their application within 240 days of discharge to avoid the need to provide evidence of good health. After that, veterans will need to answer questions about their health in order to be approved for a conversion from SGLI to VGLI.

 Family Servicemember’s Group Life Insurance (FSGLI) 

Family SGLI (FSGLI) coverage is available to the spouses and dependent children of Servicemembers insured under SGLI. The maximum coverage limit is $100,000 for spouses, and it must not exceed the Servicemember’s own SGLI coverage amount.

The maximum coverage for each dependent child is $10,000. Dependent children are insured at no cost, but the Servicemember must pay the premium for spousal coverage.

 

 

SGLI & FEGLI Related Articles

When to Use the FEGLI Calculator

First published on CompareFEGLI.com

When to Use the FEGLI Calculator

Federal EmployeeYou 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

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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?

FEGLI – Federal Life Insurance Living Benefits Guide

FEGLI – Making Plans Today If Tomorrow Never Comes

Federal Life InsuranceMaking preparations to care for your loved ones after you take your final breath is never an easy topic – but FEGLI or other Federal Life Insurance may be able to help make it a bit less frightening. But ensuring your family is able to sustain their standard of living after you’re gone is an essential conversation. However, choosing the correct life insurance can be an overwhelming task. Knowing the ins and outs of the Federal Employee Group Life Insurance (FEGLI) will help you chose the path best for you and your family.

Let’s start with the most obvious question, how much insurance do I need to protect my family for years to come? You many begin to think to of the life milestones that come with a hefty bill: paying for the funeral, college for your children, paying off the mortgage, miscellaneous debt and supplement income for your spouse to determine how much insurance you will need to protect your family.  If you have a young family, generally 10-12 times your salary will protect your family’s standard for living for many years to come.

While there are a number of different life insurance policies, the FEGLI utilizes the group term policy. A group term policy covers enrollees for a set amount, or a multiple of their salary, for as long as the employee is employed and pays the premium. FEGLI also does not require enrollees to take a medical examination or limit participation; making this an accessible option for individuals with existing health conditions, poor driving records or dangerous job positions.

Federal employees are automatically enrolled in the basic FEGLI plan, which will cover the federal employee’s salary with an additional $2,000; this is partially supplemented by the federal government. As for Postal workers, the United States Postal Service will supplement the coverage and also doubles the death benefit for employees under the age of 35 free of charge. On top of this, employee have the choice to pick “Option A,” which adds a lump sum of $10,000 to the policy, or “Option B,” which allows employees to a multiple of their salary to the policy, up to five times their annual income, and lastly “Option C,” which provides some protection for the employees spouse and dependents in multiple of $2,500 and $5,000. The FEGLI is also an attractive option for many employees due to its fixed rate; unless an employee has picked “Option B,” then the rate will gradually increase as each new age bracket is entered into.

While you and your family’s needs will change as time passes, there are only certain times that employees are allowed to increase or change their coverage. When an employee first in-processes into the system they can set up FEGLI, when an employee marries or has a child and during the employee open season. However, decreasing or eliminating your coverage can be done at any time.

FEGLI also offers options such as taking reduced amounts in retirement.  Employees that carry FEGLI coverage until retirement are eligible for the 75 percent reduction option. Meaning, employees will have a policy that has a face value of 25 percent of their ending Basic benefit plan. This will allow the employee to maintain coverage for the rest of their life, but not have to worry about the paying the premium after the age of 65. This can be useful in providing a benefit to cover final expenses at no cost to the federal employee retiree.  If you designated an assignee, the assignee has the right to change an employee’s election to the maximum 75 percent.

While FEGLI seems like a straight forward and accessible answer for many, there have been a few recent policy changes that enrollees need to be aware of. Federal employees who may be in unfortunate position to qualify for living benefits need to be aware that the new policies are not the same for active employees and retirees.

Both active and retired employee are deemed eligible to receive a lump-sum living benefit from FEGLI if they present a documented prognosis stating the employee is terminally ill and is not expected to live longer than nine months.

Active employees have the options to either receive a partial benefit in multiples of $1,000 or the total amount of their Basic policy in a lump-sum. If an employee retires, the amount of Basic Life insurance payable after the employee’s death is dependent on the Living Benefits an active employee received initially. Annuitants only have the option to receive a lump-sum benefit.

In contrast, retirees who elect to receive the Living Benefit will no longer be eligible for the Basic life insurance following their demise. Upon receiving the Living Benefit, the premium for the life insurance will no longer be charged to the retiree.

In all cases, active employees and retirees who receive living benefits will still have any optional life insurance available to them and their family.

Especially when a federal employee is just starting out FEGLI offers an affordable and accessible coverage for federal employees to obtain financial protection for themselves and their loved ones.  But it always a good idea, that as an employee ages, they begin to consider other Life Insurance options – outside the FEGLI system.   Compare your FEGLI coverage with outside companies – you might find a much less expensive plan.

 

 

FEGLI Related Articles

FEGLI – Federal Life Insurance Living Benefits Guide

First Published on CompareFEGLI.com

FEGLI

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….

Irrevocable Trust For FEGLI Life Insurance Policy Benefits?

Initially Published on CompareFEGLI.com

 Irrevocable Trust For FEGLI Life Insurance Policy Benefits?

insuranceFederal employees automatically get enrolled into Federal Employees’ Group Life Insurance (FEGLI) and are provided life insurance coverage through their federal employment and then into retirement.

But the thing that most federal employees don’t plan for is what happens if and after they die while covered by a FEGLI policy, and how to maximize the benefits for the designated beneficiaries.

For starters, you should know that Federal Life insurance proceeds are not considered taxable income for the recipients for personal income tax purposes. However, the interest they will earn on FEGLI proceeds is reportable as income for Federal Income tax purposes.

Then there’s the issue of estate taxes (if applicable)  Read More….

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 (retirement). 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…

 

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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?

FEGLI – Federal Life Insurance Living Benefits Guide

History of FEGLI

Initially Published on CompareFEGLI.com

 History of FEGLI

Federal Employees

The Federal Employees Group Life Insurance (FEGLI) program is a life insurance program available to federal and USPS employees.

FEGLI was authorized into law through the Federal Employee’s Group Life Insurance Act (FEGLIA – S. 3681) passed by Congress and subsequently signed into law in August 1954 by President Dwight D. Eisenhower.

The law created FEGLI, which is now the largest group life insurance program in the world, and provides coverage for more than four million federal employees and family members. FEGLI was officially created on August 29, 1954.

Who Handles Your FEGLI Claims?

FEGLI is administered by the Office of Personnel Management (OPM), which has a contract with the Metropolitan Life Insurance Company (MetLife) for providing group life insurance cover to federal and postal employees.

To be specific, MetLife has created an office called the Office of Federal Employees’ Group Life Insurance (OFEGLI) that handles all the claims coming in through the FEGLI program.

READ More…..

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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?

FEGLI – Federal Life Insurance Living Benefits Guide

How Do You Know What Kind of Life Insurance To Buy

Life InsuranceThe life insurance (FEGLI) that comes as a part of the benefits from your job is generally the only life insurance most people have.  Is it enough or is it the right kind.  That is a big question and a very important one.  One of the gaps HR professionals need to fill, is explaining to federal workers the difference between term and whole life insurance.  Too many workers have life insurance and fail to understand how it works and if they really need it.

What is life insurance for?  Sounds a little off.  I don’t think so.  If we are going to have life insurance then we need to determine why do we need it.  We also need to determine if the cost of life insurance outweighs the benefit.  Do you want the life insurance to replace income?  Do you want to use life insurance for final expenses or will it be used as a way to create financial wealth for your family.

Once you determine your purpose for life insurance then you can begin determining how much life insurance you need and what you can afford.  When and if you do purchase an life insurance policy, always remember to revisit the policy as changes in your life take place, it might be necessary to review the policy to see if it still answers your intentions.

Federal employees have term life insurance (FEGLI).  Do federal employees need life insurance other than what is offered through employment?  That is a question to ponder.  The thinking should follow:  Do I need life insurance?  What do I need it for?  What do I want it to do for me?  How much do I need?  Is the life insurance for me or my family?

We highly recommend that you speak with a knowledgeable financial professional before making any financial or life insurance decisions

P. S.  Always Remember to Share What You Know.

Let’s Talk Federal Employee Life Insurance (FEGLI)

Federal Employees Life Insurance – FEGLI.

Federal Employee Life InsuranceThis 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

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Federal Retirement Benefit Analysis

The Thrift Savings Plan (TSP)

Is The Pension Survivor Benefit Best For You?  by Todd Carmack

A Little-Known Opportunity Can Increase Your Retirement Income.  by Mark Sprague

FEGLI …. If What You Thought To Be True.  by Marty Duggan

FEGLI – Option C

~~FEGLI – OPTION C

FEGLIWe 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)

Federal Employees Group Life Insurance (FEGLI)

FEGLI OPTION B – Additional Insurance

FEGLI: Option B – Additional Insurance

FEGLILet’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