How To Tell If You Are Overpaying for FEGLI
How to Tell If You Are Overpaying For FEGLI
Quick – how many emails are in your inbox? If you are like the majority, that inbox is quite the swamp, stacked with loads of subscription emails that could be unenrolled. Some federal employees may feel the same towards Federal Employees’ Group Life Insurance (FEGLI) enrollment. Is it really necessary? Are you overpaying? Federal Educators share FEGLI tips that you can’t miss below.
A foundational question that federal employees should ask themselves is do you need life insurance? In most cases, life insurance is reserved for those that need additional financial resources for their family that depend on their current and future earnings. This need could also include those that are on a fixed retirement income. Another question to consider is how long financial assistance will be needed. Using a FEGLI calculator can help you discern your retirement budget and coverage needs.
Every new Federal employee is covered with Basic life insurance automatically. This benefit is made through a paycheck deduction unless you waive the coverage. The cost of FEGLI insurance is shared between you and the Government as a ⅔ to ⅓ split. Age is not a factor in cost determination. If you are 35 years or younger, you receive 2x the basic coverage that reduces to 1x between 35 to 45 years old.
Federal employees can elect to add to their Basic FEGLI coverage with three additional forms of Optional insurance. Option A is a standard coverage that provides $10,000, no matter the salary level. Option B allows you to multiply coverage 1, 2, 3, 4, or 5 times your basic pay that has been rounded up to the next even $1,000. For example, if your basic pay is $49,300, it would be rounded up to $50,000 and multiplied by the coverage you chose. Say you chose 3x, it would amount to $150,000 worth of FEGLI coverage. Option C is for family coverage. With this option, you can purchase life insurance for your spouse and dependent children. There is also the option of multiplying 1, 2, 3, 4, or 5 of coverage with $5,000 for the spouse and $2,500 for each eligible child.
Rates will change over time so it’s best to work with a professional that will help determine the best financial option for you. Call the Tampa office at (813) 755-7037 or request a free benefits analysis today.