Federal Employee Life Insurance: Everything You Need to Know

For federal employees, having the right insurance coverage is crucial for ensuring financial stability and peace of mind. One important aspect of this coverage is life insurance, which offers financial support to your family in the event of your unexpected death. In this article, we will discuss everything you need to know about federal employee life insurance, including what it is, how it works, and the different options available to you.

What is Federal Employee Life Insurance?

Federal Employee Life Insurance (FEGLI) is a group life insurance program that is available to all federal employees, including those in the U.S. Postal Service, the executive branch, and the legislative and judicial branches of government. The program offers basic life insurance coverage, as well as several different options for additional coverage.

The FEGLI program is administered by the Office of Personnel Management (OPM), which is responsible for setting the rates and coverage levels for the program. The premiums for FEGLI coverage are automatically deducted from the employee’s paycheck, making it a convenient and easy way to ensure that you have the coverage you need.

How Does FEGLI Work?

The basic FEGLI coverage is equal to an employee’s annual basic pay (rounded up to the nearest $1,000) plus $2,000. For example, if your annual basic pay is $55,000, your basic FEGLI coverage would be $57,000 ($55,000 plus $2,000).

You are automatically enrolled in basic FEGLI coverage when you become a federal employee, unless you opt out. You can also enroll in several different options for additional coverage, including:

FEGLI Options

The premiums for these additional options are calculated based on your age and the amount of coverage you choose. The premiums for the basic and optional coverage are automatically deducted from your paycheck.

FAQ

Is FEGLI Coverage Enough?

For some federal employees, the basic FEGLI coverage may be enough to provide adequate financial support to their loved ones in the event of their death. However, for others, the basic coverage may not be enough to cover their financial obligations, such as mortgages, car loans, and other debts.

That is why it is important to carefully consider your options for additional coverage, such as Option B or Option C. These options can provide additional financial support to your loved ones, ensuring that they are able to maintain their standard of living after your death.

How Do I Enroll in FEGLI?

You are automatically enrolled in basic FEGLI coverage when you become a federal employee, unless you opt out. To enroll in the additional options, you must complete the appropriate forms and submit them to your human resources representative.

You can also make changes to your coverage at any time, such as increasing or decreasing your coverage levels, by completing the appropriate forms and submitting them to your human resources representative.

How Are FEGLI Premiums Calculated?

The premiums for FEGLI coverage are calculated based on your age and the amount of coverage you choose. The premiums for the basic coverage are based on a flat rate, while the premiums for the additional options are based on a percentage of the coverage amount.

The premiums for FEGLI coverage are also subject to periodic adjustments, which are determined by OPM. These adjustments are based on the projected costs of providing the coverage, as well as the amount of claims that are paid out.

What Happens When I Retire?

When you retire, you can choose to continue your FEGLI coverage by paying the premiums yourself, or you can opt to cancel your coverage. If you choose to continue your coverage, your premiums will be based on the rates for retirees, which are higher than the rates for active employees.

You can also choose to convert your FEGLI coverage to an individual policy with the same amount of coverage. This can be a good option if you are in good health and can qualify for an individual policy at a lower rate.

Can I Cancel My FEGLI Coverage?

Yes, you can cancel your FEGLI coverage at any time by completing the appropriate forms and submitting them to your human resources representative. However, it is important to carefully consider the financial implications of canceling your coverage, as it can leave your loved ones without the financial support they need in the event of your unexpected death.

Conclusion

Federal Employee Life Insurance (FEGLI) is an important aspect of insurance coverage for federal employees, providing financial support to your loved ones in the event of your unexpected death. Understanding the different coverage options available to you, as well as the premiums, is crucial for making informed decisions about the coverage that best meets your needs. If you have any questions about FEGLI coverage, be sure to talk to your human resources representative for guidance.