Federal Employees Group Life Insurance: A Comprehensive Guide

As a federal employee, it’s important to understand the benefits you’re entitled to. One of these benefits is the Federal Employees Group Life Insurance (FEGLI) program. Initially established in 1954, the program provides group life insurance to federal employees and their family members. If you’re a federal employee, here’s everything you need to know about FEGLI.

What is FEGLI?

FEGLI is a group life insurance program that provides coverage to federal employees and their family members. The program is administered by the Office of Personnel Management (OPM) and is available to all federal employees – including those who work part-time or on a temporary basis. The program is optional but can provide peace of mind to employees and their loved ones in the event of an unexpected death.

Types of Coverage

FEGLI offers four types of coverage: Basic, Optional, Additional, and Family. Here’s how each type of coverage works:

Employees can enroll in FEGLI when they first become eligible or during open enrollment, which is held every September. They can also enroll during certain life events, such as marriage or the birth of a child.

Beneficiaries

Employees can name one or more beneficiaries to receive the proceeds of their FEGLI coverage in the event of their death. It’s important to keep beneficiary designations up to date, especially after significant life events such as a divorce or the birth of a child.

Costs

The cost of FEGLI coverage varies depending on the type and amount of coverage selected, as well as the employee’s age. Premiums are deducted from the employee’s paycheck on a biweekly basis.

Advantages and Disadvantages of FEGLI

Advantages

There are several advantages to enrolling in FEGLI:

• Guaranteed issue: Employees are automatically approved for Basic coverage without undergoing a medical exam or answering health questions.
• Portability: Employees can retain their coverage after leaving federal service, although premiums may be higher.
• Conversion: If an employee leaves federal service and loses FEGLI coverage, they can convert their coverage into an individual policy without undergoing a medical exam.
• No exclusions: Unlike some individual life insurance policies, FEGLI does not exclude coverage for certain causes of death or activities.

Disadvantages

However, there are also some potential downsides to FEGLI:

• Cost: FEGLI premiums can be higher than individual policies, especially for older employees or those with significant coverage amounts.
• No health evaluation: While guaranteed issue can be a benefit, it also means that employees with pre-existing health conditions may pay the same premium as those without any health issues.
• Minimal customization: FEGLI coverage options are limited and may not meet the needs of all employees and their families.

Alternatives to FEGLI

In addition to FEGLI, federal employees may also want to consider other life insurance options. Some alternatives to FEGLI include:

• Individual life insurance policies
• Group life insurance offered by professional organizations or unions
• Term life insurance policies
• Permanent life insurance policies

It’s important to compare the costs and benefits of each option before making a decision. Some alternatives may offer lower premiums or more customization options, but may require a medical exam or have exclusions for certain causes of death.

Final Thoughts

FEGLI can provide valuable life insurance coverage to federal employees and their families. However, it’s important to carefully consider the costs and benefits of enrolling in the program, as well as any alternatives that may be available. By understanding your options and making an informed decision, you can ensure that you and your loved ones are protected in the event of an unexpected death.

FAQ

How does FEGLI coverage work?

FEGLI coverage provides a lump-sum payment to beneficiaries in the event of the employee’s death. The amount of coverage and the beneficiaries can be selected by the employee.

Can I change my coverage amount?

Yes, federal employees can change their FEGLI coverage amount during open enrollment or during certain life events.

What happens to my FEGLI coverage if I leave federal service?

Employees can retain their FEGLI coverage after leaving federal service, but premiums may be higher. They can also convert their coverage into an individual policy without undergoing a medical exam.

Is FEGLI the only life insurance option for federal employees?

No, federal employees can also purchase individual or group life insurance policies outside of FEGLI. It’s important to compare the costs and benefits of each option before making a decision.

Can I name multiple beneficiaries?

Yes, federal employees can name one or more beneficiaries to receive the proceeds of their FEGLI coverage.