Federal Employees Group Life Insurance (FEGLI) Options
Federal Employees Group Life Insurance (FEGLI) provides group term life
insurance. The term policies don't build cash or paid-up value. FEGLI coverage
consists of Basic life insurance with several options. In addition to the
Basic, there are three forms of Optional insurance available that can be elected. You must
carry Basic insurance to elect any of the three options. Unlike Basic,
enrollment the optional insurance is voluntary -- you must apply for and selct the options
you desire. Evaluate your insurance
needs to determine how much coverage to maintain when you retire.
Government sahres the cost of Basic insurance with you. The Government
pays 1/3 and You pay
2/3 of the total cost. Your Basic insurance isn't affected by your age. However,
you must pay the total cost of any Optional insurance that you elect and the
cost determined by your age.
The Office of Federal Employees' Group Life Insurance (OFEGLI), a
private entity under contract with the Federal Government, processes and pays
claims under the FEGLI Program. Beneficiaries must submit a claim to the
OFEGLI to collect on the policy. Survivors can call them at
1-800-633-4542 to follow-up on submitted claims. See the
Survivor's page for additional reporting procedures.
The annuitant costs for all options are listed on our
Annuitant's FEGLI Rate page.
rates are listed separately. You can
elect to keep full coverage, 50% reduction or 75% reduction. The reductions
don't start until you reach age 65 and with the 75% reduction you pay nothing
from age 65 on. The SF-2801 form also lists
everything you will need to know before making your selection.
I elected the 75% reduction when I retired. When I turn 65 I pay nothing and
my coverage decreases to 25% of my full coverage over a period of
approximately 2 years. I had additional private sector coverage and between
the FEGLI reduced amount and my private insurance there will be sufficient
coverage for my family's needs.
Dennis V. Damp, Retired FAA
Before you make an election I suggest that you review
your estate first. An excellent resource for this is
"Plan Your Estate." This book will help
you evaluate your personal situation and this evaluation will help you determine
how much insurance you will need in retirement.
CAUTION - Common-law & Same-sex Marriage Beneficiary Issues
FEGLI does not recognize
common-law marriages when distributing funds according to the
standard order of precedence in 5 U.S.C. 8705(a).
An employee who wants to leave FEGLI benefits to a
partner, common-law spouse, or other person may complete a Standard
Form 2823, Designation of Beneficiary. In block B the employee may name
that person as beneficiary.
We all hope we will never need to use this option but if you do you can
elect to receive a lump sum FEGLI insurance payout if you are diagnosed to
be terminally ill and have a documented medical prognosis showing a life
expectancy of no more than nine months. Employees, annuitants, or
compensationers enrolled in the FEGLI Program are eligible to elect a Living
Employees can choose a full or partial (a multiple of $1,000) Living
Benefit while annuitants and compensationers are limited to electing a full
Living Benefit. Living Benefits are equal to the
Basic Life insurance amount,
plus any extra benefit for persons under age 45, that would be in effect
nine months after the date of the Office of Federal Employees' Group Life
Insurance (OFEGLI) receives a completed claim for Living Benefits form. The
OFEGLI is a private entity that has a contract with the Federal Government
to process and pays claims under this program.
If you assigned your life insurance policy, you cannot elect a Living
Benefit. Living Benefit payments are reduced by 4.9% to make up for lost
earnings to the Life Insurance Fund because of the early payment of
benefits. The election of a Living Benefit has no effect on the amount of
any optional life insurance that you now carry and premiums for any optional
insurance must still be paid. You must contact OFEGLI at 1-800-633-4542 to
obtain the form to elect Living Benefits (Form FE-8). This form is not
available from your human resources office or the Office of Personnel
Management (OPM). The customer service representative will process your
claim over the phone and send you the FE-8 form to complete.
Federal retirees, unless they have
their life insurance, may cancel Basic or Optional life insurance coverage
at any time. Any cancellation or reduction of life insurance coverage must
be in writing and have an original signature by the insured retiree. Be sure
to include your retirement claim number (CSA number) or social security
number and specify what action you want taken.
Please note that you cannot increase your coverage after
retirement, or reinstate any coverage that you cancel.
Write to: U.S. Office of Personnel Management Retirement Operations
Center P.O. Box 45 Boyers, PA 16017-0045 The FEGLI election form is usually
for employees, but I would complete it and send it with your written request
for the reduction.
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