By: Nick Black
The Federal Employees’ Group Life Insurance (FEGLI) program is a comprehensive life insurance program that offers various coverage options to federal employees and their families. Let’s delve into the different parts of FEGLI in more detail:
Basic Life Insurance: The Basic Life Insurance coverage is the foundation of FEGLI. It provides a death benefit equal to the employee’s salary, rounded up to the nearest thousand, plus an additional $2,000. This coverage is automatically included for all eligible federal employees. The cost of Basic Life Insurance is shared between the employee and the government. It is important to note that the Basic Life Insurance coverage amount is not adjustable by the employee.
Option A – Standard: Option A offers federal employees the opportunity to increase their life insurance coverage by an additional $10,000. This coverage is in addition to the Basic Life Insurance and provides added financial protection. Federal employees can elect Option A coverage to supplement their basic coverage. The cost of Option A coverage is solely borne by the employee.
Option B – Additional: Option B allows federal employees to purchase additional life insurance coverage based on multiples of their salary. Employees can choose coverage in increments of one, two, three, four, or five times their salary. Option B coverage provides a significant increase in the death benefit amount, offering employees the opportunity to secure additional financial protection for their loved ones. The cost of Option B coverage is solely borne by the employee. It’s important to note that the cost of Option B coverage increases with age and is recalculated every five years.
Option C – Family: Option C is designed to provide life insurance coverage for the family members of federal employees. It includes coverage for the employee’s spouse and eligible dependent children. Employees can select a coverage level for their spouse in $5,000 increments, ranging from $5,000 to $25,000. Additionally, $2,500 of coverage is available for each eligible dependent child. Option C coverage allows federal employees to extend financial protection to their loved ones, ensuring their well-being in the event of an unfortunate loss. The cost of Option C coverage is solely borne by the employee.
It is important to carefully consider the coverage options available under FEGLI and assess personal circumstances and needs when making decisions. While Basic Life Insurance is automatic, federal employees have the choice to elect Option A, Option B, and Option C coverage based on their individual requirements.
It’s worth noting that FEGLI provides group term life insurance, which means coverage is in effect as long as the employee remains eligible and continues to pay the premiums. The program does not accumulate cash value and does not offer permanent life insurance options. However, the FEGLI program is known for its affordability and the ability to provide a substantial level of life insurance protection.
In summary, the FEGLI program comprises Basic Life Insurance, Option A – Standard, Option B – Additional, and Option C – Family. Each part offers federal employees the opportunity to customize their life insurance coverage based on their needs and the financial well-being of their loved ones. By understanding the options available and their associated costs, federal employees can make informed decisions to provide valuable protection for their families.
Tags: Nick Black, Federal Life Insurance, FEGLI, Federal Employee Group Life Insurance, FEGLI Savings, Federal Insurance Consultant, FERS, CSRS, Federal Employee Retirement Planner, Federal Retirement
