FEGLI Life Insurance Payout

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As a federal employee, you have access to the Federal Employees’ Group Life Insurance (FEGLI) program, which provides life insurance coverage and peace of mind to you and your loved ones. In the unfortunate event of your passing, your designated beneficiaries will receive a payout to help them with the financial burden of losing you.

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Understanding FEGLI Life Insurance Payout

The FEGLI program offers several different types of life insurance coverage, including Basic, Option A, Option B, and Option C. Each type of coverage has its own payout structure and benefit amounts, which are determined by your salary and the number of coverage units you have elected to enroll in.

The Basic Coverage is equal to your annual salary, rounded up to the nearest thousand and adding $2,000. This amount is paid out as a lump sum to your designated beneficiaries in the event of your death. Option A coverage provides an additional $10,000 payout, while Option B coverage provides a payout based on your salary and the number of coverage units you enroll in. Option C coverage provides a payout for your spouse and/or children.

When you enroll in the FEGLI program, you will be asked to designate one or more primary and contingent beneficiaries who will receive your life insurance payout. It’s important to keep your beneficiary designations up-to-date to ensure that your desired beneficiaries receive the payout.

Calculating FEGLI Life Insurance Payout

The amount of your FEGLI life insurance payout is determined by your salary and the type of coverage you have elected to enroll in. The payout amount is based on the number of coverage units you have selected for Option B and/or Option C coverage.

For example, if you are enrolled in Basic, Option A, and Option B coverage with 3 units, your total coverage amount would be calculated as:

Type of coverage
Coverage amount
Basic
$100,000
Option A
$10,000
Option B
$300,000
Total coverage amount
$410,000

If you were to pass away, your designated beneficiaries would receive the total coverage amount of $410,000 as a lump sum payout.

FEGLI Life Insurance Payout FAQ

Q: Who can be my FEGLI beneficiaries?

A: You can designate one or more primary and contingent beneficiaries, who must have an insurable interest in your life. This includes your spouse, children, parents, siblings, or anyone else who would experience a financial loss if you were to pass away.

Q: Can I change my FEGLI beneficiary?

A: Yes, you can change your beneficiary at any time by completing a new Designation of Beneficiary form (SF 2823) and submitting it to your agency’s human resources office.

Q: What happens if I don’t have a designated beneficiary?

A: If you do not have a designated beneficiary, the payout amount will be distributed according to a standard order of precedence determined by law, which typically starts with your surviving spouse, children, and then parents.

Q: Is my FEGLI payout taxable?

A: No, your FEGLI life insurance payout is not taxable.

Q: Can I purchase additional FEGLI coverage?

A: Yes, federal employees can purchase additional FEGLI coverage during open enrollment periods or qualifying life events.

Conclusion

The FEGLI program provides federal employees with valuable life insurance coverage and peace of mind, knowing that their loved ones will be taken care of in the event of their passing. By understanding the payout structure and calculating your coverage amounts, you can ensure that your designated beneficiaries receive the full benefit of your FEGLI life insurance payout. Remember to keep your beneficiary designations up-to-date, and consider purchasing additional coverage if needed.

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