The Foreign Service Journal - September 2014 - page 54

A Good Time to Examine Your Life Insurance Coverage
If on your birthday this year,
your age ends in zero or five,
congratulations! I will soon hit
one of those milestones. How-
ever, if you have life insurance
with the Federal Employees’
Group Life Insurance, this
year could also bring a signifi-
cant rise in your premium.
When you turn 60, the rate
you pay for options A, B and
C could more than double. So
it is a good time to examine
your life insurance needs, and
consider whether or not to
continue with FEGLI coverage.
The FEGLI program is a
“group term” policy. Once
enrolled and as long as you
pay the premium, you are cov-
ered for the duration. There
is no medical exam or other
limitation on participation,
which is why it is an especially
attractive option for those
who have medical issues or
work dangerous jobs.
Moreover, the FEGLI retire-
ment benefit is prefunded by
premium costs so that some
coverage can be continued
after age 65 at no cost.
FEGLI Basic and Options.
FEGLI consists of “Basic”
insurance and options A, B
and C. FEGLI Basic is a level-
rate program. An enrollee’s
rate remains the same
whether he or she is a new
employee or retired. Unless
waived, new employees are
automatically enrolled in
FEGLI Basic.
An enrollee who carries
Basic into retirement can
elect a 75-percent reduction,
meaning that the Basic cover-
age reduces by 2 percent
each month until it reaches
25 percent of its pre-reduc-
tion amount. But there is no
premium once the reduc-
tions begin, and the policy
remains free for the rest of
the enrollee’s life.
Options A, B and C are
optional enrollment programs
with escalating premium rates
that adjust every five years.
Depending on the phase-out
or post-retirement cover-
age option chosen, options
A, B and C may be free after
the enrollee reaches age 65,
subject to a phase-out. If an
enrollee prefers to retain a
constant level of coverage, his
or her premiums will increase
every five years until age 80.
What Do You Need?
Do you still need life insurance
in retirement? How much do
you need? If the children are
grown, the house is paid off,
and you are healthy, it may be
time to dial down.
What are your actual
needs? Do you have a suf-
ficient emergency fund? Is
your spouse protected?
For some, continuation in
the FEGLI program is best,
especially if there are health
or lifestyle issues. For others,
private insurance offers a less
expensive alternative.
Consult a financial adviser.
If you do reduce or discon-
tinue life insurance, consider
placing the money saved into
retirement savings.
And, happy birthday!
On July 21, AFSA continued its popular series
on federal benefits, this time focusing on
federal long term care and survivor annuities.
Jeannie Singleton, senior account manager at
the Federal Long-Term Care Insurance Program,
and Jacqueline Long, chief policy adviser for
the Office of Retirement at the State Depart-
ment, were the panelists.
Singleton and Long explained the topics in
detail to a large number of AFSA members who
came prepared with numerous questions. You
can find a thorough write-up of the presenta-
Views and opinions expressed in this column are solely those of the AFSA Retiree VP.
or (703) 437-7881
You may cancel or change
your FEGLI election by sub-
mitting the completed SF
2818 to OPM’s Retirement
Office at:
U.S. Office of Personnel
Management Retirement
Operations Center
P.O. Box 45
Boyers, PA 16017-0045
For more information on
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