Ingenuity Financial Partners

Federal Employees

FEGLI,FEGLI Alternatives

Federal Employees Benefits

Each individual has unique situations and life goals. That is why we take the time to listen to each federal employee, to make certain we understand their goals in the short term and long term.

In some situations it makes sense to reduce costs for the FEGLI life insurance program.  This is especially true for federal employees above the age of 50.  There are however, many factors to consider when making a change from the FEGLI program to private life insurance, so always consult with a qualified advisor.

Federal Employee Group Life Insurance (“FEGLI”)

The FEGLI program consists of Basic Coverage and Options A, B and C.  Optional coverage under A, B and C is group term insurance (that does not build any cash value) and goes up in price every 5 years.

Basic coverage is equal to a federal employees annual basic pay, rounded up to the next $1,000, plus $2,000.  The federal government pays for 1/3rd of this cost and the employee pays for 2/3rds of the cost.  Coverage is guaranteed and the cost is $.15 per $1000 each pay period.  There is currently no cost for Basic Coverage for postal employees.

If a federal employee has elected Basic Coverage they can also choose to obtain life insurance coverage under Options A, B and C.

Option A is a flat $10,000 of coverage.  Option B provides a death benefit equal to 1 – 5 times the annual basic rate of pay. Option C is coverage for a spouse and/or children.

Option A, B and C coverage goes up in price every 5 years.  Federal employees are often surprised to learn that cost increases for Option B are as follows:

Federal Employees Benefits

From ages 44 to 45:    Increase of 60%

From ages 40 to 50     Increase of 62%

From ages 54 to 55     Increase of 76%

From ages 59 to 60     Increase of 126% !!!

It doesn’t get any better after age 60 either.

Always consult with a qualified advisor prior to making any changes.