Are you curious about FEGLI?
Only about 54% of Americans have life insurance coverage. If you’re in the uninsured minority, Federal Employee Life Insurance could help. However, you might have doubts if you lack the knowledge.
If you want a good starting point, read on. We will discuss what FEGLI can do for you:
What Is FEGLI?
FEGLI is a group term life insurance, meaning you gather no cash value, unlike a whole-life policy. For this reason, you can’t use it to take a loan.
Part of your federal benefits is the base coverage unless you waive it. It’s equivalent to your yearly basic pay with an additional $2,000. The insurance coverage rounds up your salary to the nearest $1,000.
For example, a $95,200 yearly salary means rounding it up to $96,000 before adding the $2,000. As a result, you’ll get a total of $98,000 of insurance coverage.
The government will only pay a part of the basic FEGLI coverage. It pays for a third of the premiums. It means you’ll have to cover for the other two-thirds.
Extra Benefits for Basic FEGLI Coverage
If you’re under 45, you get extra coverage alongside your base insurance coverage for free. When you’re 35 or younger, you get twice the coverage amount. The multiplication factor decreases as you age.
A $98,000 coverage becomes $196,000 if your age is 35 and below. The age multiplier will not apply to optional FEGLI coverage rates.
Optional FEGLI Coverage
If you need more security as a federal employee, you have three options for optional coverage. Option A is the standard coverage, providing about $10,000 regardless of your annual pay.
Option B allows you to get up to five times your basic pay, rounded to the next even $1,000. For example, if your annual salary is $59,100, it becomes $60,000. If you choose to multiply it by three, the total is $180,000.
Option C enables your family to get life insurance. It covers your spouse and dependent children. Like Option B, you can pick from one to five coverage multiples. Each is equivalent to $5,000 for your spouse and $2,500 for every eligible child.
Eligible dependent children are single and under 22 years of age. However, a child over 22 is still qualified if they sustained a mental or physical disability before then.
However, you can’t pick different multiple for your family members. After choosing a multiple, it applies to everyone.
If you picked five Option C multiples, your spouse has $25,000 coverage, while each child will get $12,500.
Do you need more insurance options for your family? Consider women and life insurance policies now.
Get Life Insurance Now
We hope you got a more concrete idea of FEGLI insurance with our guide. Use the knowledge to determine whether the optional coverage is worth your money.
However, you have other insurance options to secure your future. Think about your health insurance to prevent financial ruin when untoward incidents happen.
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