If you’re a federal employee, you probably know about the Federal Employees Group Life Insurance (FEGLI) program. It’s a life insurance option designed to provide coverage for federal employees, retirees, and their families. But, understanding the details of FEGLI can be a bit confusing. In this blog, we’ll break down everything you need to know, from basic coverage to FEGLI survivor benefits, to help you make informed choices.
FEGLI Survivor Benefits: What Are They?
One of the most important aspects of FEGLI is the survivor benefits. These are payments made to your beneficiaries after your death. If you are enrolled in FEGLI, your survivors are generally entitled to a death benefit. This can help your family manage expenses and maintain financial stability after you’re gone.
The survivor benefit amount depends on the coverage you have and the options you’ve chosen. For example, if you have Basic Insurance, your survivors will receive the basic death benefit, which is usually the value of your salary at the time of death. If you have additional coverage, such as Option A, B, or C, those benefits will be added to the survivor payout.
It’s important to keep your beneficiary information up to date so that your loved ones will receive the proper payout. You can change your beneficiary at any time through your agency’s human resources office or via the OPM website.
Types of FEGLI Coverage
FEGLI offers several types of coverage, and you can choose the options that fit your needs. Here’s a quick overview:
- Basic Life Insurance: This is the standard coverage that every federal employee gets unless they opt out. The basic coverage equals your salary at the time of death, rounded up to the nearest $1,000.
- Option A – Additional Life Insurance: This adds extra coverage on top of your Basic Life Insurance. It’s a flat $10,000 of coverage.
- Option B – Family Life Insurance: This is coverage based on multiples of your salary. You can choose 1, 2, 3, 4, or 5 times your salary to be covered. This option is great if you want to ensure your family has extra financial support.
- Option C – Dependent Life Insurance: This option provides coverage for your spouse and children. The coverage amounts vary based on the number of dependents you have.
Each of these options comes with its own cost, so it’s important to understand what works best for you and your family.
The Cost of FEGLI
Now, let’s talk about how much FEGLI costs. The cost of the program depends on several factors, such as your age, the coverage you choose, and whether you’re a smoker or non-smoker. The cost for Basic Life Insurance is calculated based on your salary. If you choose additional options, those come with their own fees.
The FEGLI basic life insurance cost is usually deducted from your paycheck, and it is relatively affordable compared to private life insurance policies. The good news is that the cost is set by the government, so you don’t have to shop around for a policy or worry about fluctuating rates. However, as you age, your premiums may increase, especially if you opt for additional coverage.
Important Things to Remember
When you’re considering FEGLI, keep in mind that it’s not always the best option for everyone. If you’re young and healthy, you may want to compare the costs of FEGLI to private life insurance policies. Sometimes, private insurance can provide more flexibility and lower premiums, especially if you’re looking for long-term coverage. However, FEGLI is convenient and guarantees coverage, which makes it a solid option for many federal employees.
In Conclusion
FEGLI is a valuable benefit for federal employees and their families, offering reliable life insurance coverage with various options to choose from. Understanding the FEGLI survivor benefits and how they can help your loved ones is important, as is knowing the FEGLI basic life insurance cost. If you’re unsure about the best option for you, talk to a financial advisor to see how FEGLI fits into your overall plan.
By understanding your options, you can make a smart decision that protects you and your family for years to come.