FEGLI
FEGLI or the Federal Employee Group Life Insurance is a group life insurance policy that covers most of the federal employees.
Financial Plan for the Federal and Postal Employee
Like all Federal and Postal Employees we must all consider the importance of our Financial Plan as we prepare to live in retirement – on our own terms. Whether you are part of the CSRS system or FERS you should know the importance of having an overall financial PLAN and how vital it is for a successful retirement future. Part of THE PLAN should include a financial piece – your financial plan.
What is a financial plan? It is a thought process of what is important to you and what is required for your life in order to make your dreams a reality. A financial plan assists us in identifying what we want, how to get it and how to keep it. Sometimes it is as simple as identifying the small changes that you can make today which will have large impacts in the future? Devising a financial plan means making choices, sometimes difficult ones, in order to reach your retirement goals.
The process of building your financial plan has much to do with your value system. Our value system is often shaped by our parents. As we mature our value system may change. The values we have today, we probably did not have them when we were younger. One reason being, our responsibilities and obligations have changed.
Often when we make one decision, it simply causes us to make another decision. Constructing a financial plan and making decisions also involve trade-offs.
For instance: Would you like to maintain a Life Insurance policy on yourself or your spouse so you can protect your family? The trade-off is the cost of the insurance for the benefit of that protection. Then if you make the decision to protect your family in this manner, what is the best way (most cost effective way) of managing this expense? Should you stay with FEGLI or find a different policy? Is there a ‘best and cheapest’ policy for your needs?
Another decision you will need to work through is with regard to your TSP Account. The decisions you will need to make consists of the amount and manner you take income from your savings. Additional TSP consideration include rolling your funds into an IRA or and whether or not you should hire a professional to help you with your investments
You may have to give up something today in order to gain something tomorrow that might ultimately be of far greater benefit in the future. We save now and we plan now so that our retirement years can be spent in comfort and security.
The most educated Federal and Postal employees and retirees will likely be working with a Financial Professional to help them with these decisions. That is to say – the federal employees who choose to enjoy more of their free time and worry less in retirement will likely want someone else to manage the day-to-day minutiea of their investments and retirement plan. We may know a lot about our own circumstances and may even know a lot about the economy or the markets – but I suggest that you find a financial expert in your benefits to ensure that you are looking at all of the possible savings and advantages that you have as a result of your employment.
P. S. Always Remember to Share What You Know.
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 – SUMMARY
FEGLI Summary
We have talked a lot about Federal Employees Group Life Insurance (FEGLI) and shared some information that will hopefully assist you in planning to retire well. Although, we have had a fairly lengthy discussion about FEGLI, there is yet so much more we could discuss.
However, irrespective of the discussions, what is most important is YOU. You have all the information about you and your family. You know what your desires are for you and your family. So with that, hopefully the information shared in the posts will serve as a tap on the shoulder, a reminder that it is far better to put your own plans in place long before you need to so that your family members won’t have to. Losing someone they love will be enough in itself.
We all want to take care of our families and loved ones. The best way we can do that is to leave as little guess work to them as possible by taking care of the business of the end of our lives as part of the planning process 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)
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)
FEGLI – Did You Know?
The Office of Personnel Management (OPM) is the only entity that has a record of your FEGLI file. They can tell you how much coverage you have and who your beneficiaries are. With proper identification of yourself for safety and security, OPM will gladly provide that information to you if you need to verify or confirm your coverage… But there are limitions.
Conversely, OPM has nothing to do with a claim being filed or answered in the event of the policy holder’s death. So don’t get upset if you call OPM concerning a claim and they due to privacy issues cannot respond to your questions. Not to mention OPM cannot make recommendations to you about the amount of coverage or whether or not FEGLI is the best solution for you. Remember – FEGLI is not insurance provided by the Federal Governement – but a contractor who still has a profit motive.
FEGLI Coverage
The administrative arm of the OFEGLI (Office of Federal Employees’ Group Life Insurance) represented by MetLife will handle your claims issues and concerns. MetLife pays death claims for Federal Employees covered under FEGLI.
If the claim is less than $5,000 it is paid to the beneficiary via check. If the claim is $5,000 or more, it is paid in two ways: By check or TCA (Total Control Account). Under TCA an interest bearing account is set-up in the name of the beneficiary with MetLife. If no decision is made as to how the claim payment should be distributed, then MetLife sets up a Total Control Account.
If a policy holder passes away family members may contact OPM via phone or use the website to inform OPM of the death.
Discuss these provisions with your family members so that they will be informed and take the proper steps necessary to assist in taking care of the business of your life.
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 Extra Benefit
FEGLI – The Extra Benefit
We have talked a lot about FEGLI and yet there are many aspects of the Federal Employees Group Life Insurance we still need to touch upon. If we don’t hit upon every single aspect of FEGLI and FEGLI Rates and there are still things you need and want to know, just drop a comment so that we can address your concerns. Our goal is to hopefully answer your questions and discuss topics in a way that is clear and refreshing.
We certainly try to use an approach that is more like talking to your friend in the living room or for me; the hang-out is the kitchen. Wherever you decide to have the conversation, the important thing is to have it. End of life discussions can be difficult for families and friends. I like to refer to life, whether it is the beginning or the end of the journey as –Getting Prepared for the ME.
Who knows better about what you like and how you like it than you. Therefore, it is simply better to have the opportunity to make your own preparations just the way you like. We didn’t talk about the extra benefit provision of FEGLI in our past posts. I thought it needed its own space:
FEGLI offers an extra benefit to employees under age 45 at no extra charge. The benefit doubles the amount of life insurance payable when you are age 35 or younger. However, on your 36th birthday, the extra benefit decreases at the rate of 10% annually terminating the benefit at age 45. The extra benefit is one of those extra good-to-know items you don’t want to pass-up without evaluating it benefits to you.
Click HERE for information on Retirement Planning
Click HERE for information on FEGLI
Click HERE for information on TSP.gov login
Click HERE for information on FEGLI Calculator
In the following posts we are going to discuss a few other important aspects of FEGLI.
P. S. Always Remember to Share What You Know.
FEGLI – Assignment
FEGLI Assignment
FEGLI Assignment of Benefits – Employees can, as of a law passed in 1994, assign their FEGLI Basic, FEGLI Standard Optional and FEGLI Additional Optional life insurance to an individual, individuals, a corporation or an irrevocable trust.
Although there are countless reasons why a FEGLI policy holder might consider an assignment of benefits, the most common cause is generally to comply with a court order. Premium deductions continue from your salary or annuity.
Once the assignment has been made, you cannot cancel your life insurance nor make any future beneficiary changes. Before we leave our FEGLI discussion, let’s discuss briefly the Living Benefit.
Although the Living Benefit is still a relatively new term for many, it has become increasingly popular as more and more individuals and families struggle with life threatening illnesses leaving them strapped for money.
The FEGLI Living Benefit allows the policy holder to cash in FEGLI Basic coverage if he or she is expected to pass away from an illness in 9 months or less. The Living Benefit is paid to the policy holder instead of survivors or beneficiaries. This option can only be exercised once. When the election is made it cannot be cancelled or retracted.
However, if the policy holder does not expire during the time expected and recovers, he or she is not obligated to pay the money back. When the full living benefit is enacted, the premium deductions stop and the policy is also terminated.
Life insurance is an important part of the financial planning process and FEGLI is a great product until you reach a certain age (speak to a financial professional to help determine when that is). Life insurance is highly personal and individual. Key decisions about your life can only be made by you and your loved ones. No matter what information you share with a professional, the biggest part of the decision-making is emotional and only you get to own it. Make sure you are working with a knowledgeable financial professional to ensure that you have the right answers to these very difficult questions.
Click HERE for information on Retirement Planning
Click HERE for information on FEGLI
Click HERE for information on TSP.gov login
Click HERE for information on FEGLI Calculator
P. S. Always Remember to Share What You Know.
www.psretirement.com
FEGLI – Conversion
FEGLI Conversion
The term conversion is when a policy is converted (changed) into another type of policy, i.e. from a group life insurance policy to an individual policy without undergoing a physical examination to qualify. If you are a Federal or Postal Employee you will need to understand how the term ‘Conversion’ relates to FEGLI.
Your coverage as an employee ceases when you resign, complete 12 months in a non-pay status or when you retire. Regarding any of the above conditions, if you need life insurance, you can consider converting to a non-group individual policy and you will not have to be given a physical examination to qualify. With FEGLI (watch the video) this is challenging due to the typicaly costs associated with the new ‘converted’ policies available. If you are healthy, you would typically be better off Comparing your FEGLI on the internet or with a qualified FEGLI expert against the open market to determine the best option available for you and your family.
You may also want to convert to avoid the Mandatory Reduction in FEGLI Option A that commences upon reaching age 65 and you are retired. You can also choose to continue your Basic insurance into retirement and convert some or all of your optional insurance.
It should be noted that if you assign your insurance, you forfeit the right to convert your coverage leaving that privilege open only to the assignee. We will talk more in upcoming posts about Assigning your insurance.
Having a good understanding of FEGLI will assist you and your family in planning for and taking care of the final business of your life.
P. S. Always Remember to Share What You Know.
FEDERAL RETIREMENT INFORMATION
For more information federal and postal Retirement Planning
Additional FEGLI information HERE
For access to your TSP.gov login
Postal employees can access their LiteBlue.usps.gov account from here
More About FEGLI – FEGLI Option C
FEGLI Option C
In previous articles we discussed Basic insurance and Options A and B and various FEGLI rates. Now let’s talk about the third option under the Federal Employees Group Life Insurance – Option C. Option C is Family Insurance. As with Options A and B, Option C’s premiums are also based on age. Coverage continues into retirement and you pay the full cost of premiums.
Option C provides life insurance for your spouse and unmarried, dependent children, excluding foster children. Option C covers your spouse between 1 and 5 multiples of $5,000 and the children between the same multiples of $2,500.
With Option C you have two opportunities to make an election — first at retirement and shortly before your 65th birthday. Even if you are already 65, you still have two opportunities to make an election at retirement and shortly after retirement.
With Option C, you may choose two levels of coverage at first election: Full or No Reduction for all multiples. With Full Reductionq, at age 65 the amount of your Option C will start to reduce at 2% a month until it reaches zero.
However, if you chose No Reduction, at the first election, the full amount of your Option C will continue until your death unless you change to Full Reduction. At the second election, you can also choose Full or no Reduction for any or all multiples under Option C.
A Special Note: If you choose not to stop the future reduction of coverage when you reach age 65, your premiums will cease and your coverage will drop 2% per month for approximately 50 months, after this period your coverage will cease. If you choose not to end coverage, your premiums will continue.
Take your time in examining and understanding your options so that you will be pleased with the decisions you make to protect you and your loved ones.
Click HERE for information on Retirement Planning
Click HERE for information on FEGLI
Click HERE for information on TSP.gov login
Click HERE for information on FEGLI Calculator
FEGLI – Option B
FEGLI – Option B
Let’s talk about Option B under the Federal Employees Group Life Insurance (FEGLI). Option B represents additional insurance of which you have the right to carry into retirement. The value of your FEGLI Option B insurance depends on your coverage election.
You have the option of choosing one, two, three, four or five times your annual basic pay rounded to the next $1,000. As with Option A, you are responsible for paying the full cost of the premium. The premiums are age weighted as with Option A.
With Option B, you have two opportunities to make an election — first, at retirement and shortly before your 65th birthday. If you have already reached age 65, at retirement you have the opportunity to elect when you retire and shortly after retirement.
At first election you can choose two levels of coverage: Full Reduction or No Reduction for all multiples. If you choose Full Reduction, at age 65 Option B will reduce at the rate of 2% a month until it reaches zero.
If you choose No Reduction, then the full amount of your coverage will continue until your death unless you change to Full Reduction. At the second election you can choose Full Reduction or No Reduction for any or all multiples of coverage.
If you choose not to stop the future reduction of your coverage when you reach age 65, premiums will cease and the value of your insurance will drop by 2% per month until it reaches zero.
However, if you choose to elect unreduced Option B, its value will not be reduced unless you later cancel the election or change the amount of coverage. In that respect, premiums will continue beyond your 65th birthday. The government will also contact you before you reach age 65 to request your election. You have the option to reduce part or all of your coverage.
Understanding all of the provisions of your life insurance is important and can be a challenge. You don’t have to travel this path alone; there are life insurance specialists that are available for you. These would be licensed and trained financial professionals who are experts in this field. In addition to the work that your HR department can do for you, these experts can probably help you find cheaper options, especially as you age.
Take the initiative and work with your human resources office to have a representative visit your office for a brown-bag round table where you can have the opportunity to get answers to your questions. Hint: Develop your questions before the round table so that you are sure not to miss anything.
Click HERE for information on FEGLI
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Click HERE for information on FEGLI Calculator
Click HERE for information on Retirement Planning
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FEGLI – Option A Standard
FEGLI Option A – Standard Insurance
The Federal Government offers 3 other insurance options and we’ll discuss each in separate posts. Let’s begin with Option A- Standard Insurance.
You are entitled to continue your Option A into retirement. Option A is worth $10,000 and the cost of coverage will be your full responsibility. Premiums do increase with age. With the second month after you reach age 65, or the second month after your date of retirement, if you are already 65, your Option A will be reduced by 2% of the $10,000 or approximately $200.00 per month until it reaches $2500. $2500 will be the amount paid as a death benefit. At age 65 premiums will cease.
Many federal employee wrongly assess that $10,000 will be payable upon their death. So we want to emphasize that the amount payable under Option A is $2500 upon your death. It is a good measure to discuss insurance options with your family members or someone you trust so that they will understand what to expect from your coverage and the benefits your survivors are eligible to receive.
When preparing for retirement ask all the questions you can think of that might help you reach your retirement goals and retire well. After all, it is your life and you deserve to have the best information possible to take you into your next new adventure with confidence.
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Click HERE for information on FEGLI
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Click HERE for information on FEGLI Calculator
FEGLI Options
~~FEGLI OPTIONS
In a previous post we discussed the group life insurance, FEGLI, offered by the Federal Government to its employees. We talked about the Basic Life Insurance offered to federal employees. Let’s reiterate, at retirement your Basic insurance will be equal to your salary, rounded up to the next higher $1,000 plus $2,000. Under the Basic insuran
ce you may choose a 75% option whose cost remains the same as when you were an active employee until you reach age 65.
At age 65 your premiums cease and the value of your insurance declines by 2% per month until it reaches 25%. At your death, the benefit will be 25% of the original amount. If you choose the 50% reduction you will pay a higher premium until you reach age 65 or if you are already 65 at retirement. After which, your premiums will decrease monthly with the value declining by 1% per month until it reaches 50%. Therefore, the death benefit will be 50% of the original amount of the Basic life insurance.
If you choose the ‘no reduction’ option, which is slightly more expensive, your insurance will remain the same as it was when you retired. You’ll pay a slightly higher premium until age 65, and then your monthly premium will drop. This option allows your coverage to remain the same upon your death, paying the full amount as a death benefit.
Always talk to your human resources office or the plan administrator or a financial professional trained on your benefits to be certain you understand all the provisions of the life insurance you are choosing and the options.
P.S. Always Remember to Share What You Know.
Click HERE for information on Retirement Planning
Click HERE for information on FEGLI
Click HERE for information on TSP.gov login
Click HERE for information on FEGLI Calculator
FEGLI – Term vs. Whole Life Insurance
FEGLI: Term Life Insurance and Whole Life Insurance – What’s the Difference?
This is a good segue to draw a distinction between term and whole life insurance. There are a number of very important issues about FEGLI (watch the video here) and how it works in retirement so that you will have all the information needed to put a plan in place that works for you.
Term life insurance is the category of life insurance offered to federal employees. It typically has no cash value. Term life insurance’s value decreases with age except under certain conditions we will discuss as we lay out the options available to federal employees – FEGLI Basic Life, FEGLI Option A, FEGLI Option B, and FEGLI Option C. Term Life Insurance covers the policy holder for a specific period (term) of time.
Whole Life Insurance typically has a cash value and is in force for the whole (all) of the policy holder’s life as long as the premiums are paid. Whole Life Insurance can allow for the policy holder to either cash it out or borrow against the policy. However any outstanding loans and accrued interest reduce the benefit payable upon the policy holder’s death.
It is always a good idea to talk to a licensed and knowledgeable financial professional about any questions you may have concerning your life insurance. Our posts are meant to educate and disseminate information that might assist in evaluating options available to you at retirement in your benefits profile. You will almost certainly benefit from working with an expert in making sure you get the most from your insurance expense.
Educate yourself by collecting, analyzing and evaluating information that will put you on the road to a comfortable and secure future. Seek out a FEGLI calculator and compare your FEGLI costs against private life insurance carriers. Know the parameters of your FEGLI policy and when you are better off with a different policy, so that you can increase your net retirement cashflow and RETIRE WELL.
P. S. Always Remember to Share What You Know.
Click HERE for information on Retirement Planning
