Irrevocable Trust For FEGLI Life Insurance Policy Benefits?
Federal 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….