No, the government does not insure employees under Federal Employee Group Life Insurance. The company which has the contract for FEGLI is MetLife.
What is my Basic Life Insurance and how is it priced?
Basic Life Insurance is the standard plan available to Federal employees. Coverage is calculated as your salary, rounded up to the nearest thousand, plus $2,000 and costs $0.325 per $1,000. For example, someone who makes $62,015 would have $65,000 in basic life insurance costing $21.13 per month. Please Note: USPS employees do not pay for Basic Life Insurance while working, but do pay for it once retired.
When a federal employee/retiree hits age 65 or retirement (whichever comes later), most elect standard deduction for their Basic Life insurance. This means the policy will become free, the employee/retiree will no longer pay monthly premiums, but the coverage level will decrease by 2% per month until the coverage amount reaches 25% of its original value. In the above scenario the employee had $65,000 in coverage and would retain a minimum $17,250 (25% of $65,000) in coverage for the remainder of their life
What is Option B and how does it work?
Option B is an optional, additional life insurance policy offered to Federal employees. It is based on a multiple of your salary, rounded up to the nearest thousand, from 0 - 5. For example, if an employee makes $64,050 per year, and has 5x their salary, they’d have $325,000 in coverage.
The cost of this coverage is calculated based on the employee’s age. Every five years (from age 35-85), Option B’s price goes up, usually between 90%-120% at each price interval. While Option B can be a great low cost option for younger employees, for those who are older Option B quickly becomes a very expensive, uncompetitive option for life insurance coverage. For this reason, we encourage Federal employees who do not have major health issues to look at options outside of FEGLI for life insurance. However, for those with health issues, Option B can be a key asset, as it requires no physical to get coverage.
Although licensed to sell life insurance, FEFA representatives rarely(if ever) do as the vast majority of our clients are older, whose life circumstances no longer require large life insurance policies.
I have recently become ill and would like to know how to get into FEGLI?
Unfortunately, FEGLI is not something that a federal employee can take advantage of at any time. Federal employees have the opportunity to pick up/increase their FEGLI coverage when they begin their career with the federal government and during FEGLI open seasons. These open seasons come around very infrequently, usually once a decade, with the last one in September of 2016 and the one before that in the early 2000’s.
How do I get out of FEGLI?
You can opt-out of FEGLI at any time. The government cannot force you to pay for private life insurance that you do not want. If you are still employed by the federal government and want to decrease or cancel your FEGLI coverage you simply fill out a FEGLI change form and send it to Shared Services or your HR Department (depending on your agency). If you are retired, you are simply required to write, sign and submit a Letter of Instruction to OPM indicating what FEGLI coverages you wish to cancel/retain.
Can I get my premiums back for the time I paid for coverage that I did not have?
Yes. Generally this applies to Option C insurance, the family coverage.
Option C covers your spouse and children under 22 years old. For example, if you you are paying for Option C, have no kids under 22, and no spouse, then you are likely paying for coverage you do not have. If this is the case, contact us and we will walk you through how to get your premiums back from MetLife for the period of time in which you had no coverage. Although MetLife does not have to inform you when no longer have coverage, they do have to give you the premiums back that you paid for said coverage.
A member of our team will contact you with an answer soon.
THE BRAND FEFA IS OWNED BY FEFA LLC AND IN NO WAY IS AFFILIATED WITH OR A PART OF THE FEDERAL GOVERNMENT OR ANY AGENCY OF THE FEDERAL GOVERNMENT. FEFA IS A PRIVATE COMPANY WHO ASSISTS FEDERAL EMPLOYEES IN UNDERSTANDING AND EXECUTING THEIR RETIREMENT OPTIONS.