Your FEGLI Life Insurance for Federal Employees


Welcome to Your FEGLI Life Insurance for Federal
employees. I’m Dave Johnston with OPM. In this presentation you will learn the basics
about the Federal Employees’ Group Life Insurance Program, FEGLI. This information is current
as of May 2015. Life insurance is not for everyone, but it
can be a valuable resource to protect your family from unexpected financial devastation.
Your death could leave your family unable to pay for housing, monthly bills, or other
expenses because they won’t have your income to support them. On top of that, most funerals
today cost more than $7,000 and they can easily cost thousands more. Life insurance can help
your family cover your final expenses and make ends meet until they can get back on
their feet. In 1954 Congress established the Federal Employees’
Group Life Insurance Program, FEGLI, and over the past 60 years it’s become the world’s
largest group life insurance program. FEGLI covers the lives of over 4 million Federal
employees, annuitants, and family members. With FEGLI, you can get life insurance coverage
starting at one year’s salary to as much as six times your salary and many options in
between. You can even bring the coverage into retirement if you meet certain requirements.
There are two categories of FEGLI coverage: Basic and Optional. Basic covers the life
of the employee in an amount equal to your annual rate of pay, rounded up to the nearest
whole thousand dollars, plus two thousand dollars. So if you have an annual rate of
pay of 57,100 dollars, enrolling in Basic would cover your life for 60,000 dollars.
This is called your Basic Insurance Amount or BIA.
Eligible new employees are automatically enrolled in Basic unless they waive it.
The other kind of FEGLI coverage is Optional coverage. You must have Basic to be eligible
for any type of Optional coverage. There are three types of Optional coverage. You can
elect none, some, or all of them. The first type is Option A. Option A covers
the employee’s life for $10,000 on top of the coverage you have with Basic.
The second type of coverage is Option B. Option B also covers the life of the employee. Take
your annual rate of pay and round it up to the nearest whole thousand dollars. This is
the amount of coverage you would have with one multiple of Option B. Employees can elect
up to five multiples of this amount under Option B.
The third type of Optional coverage is Option C. Option C does NOT cover the life of the
employee; it covers the lives of your spouse and unmarried dependent children under age
22. One multiple of Option C covers the life of your spouse for 5,000 dollars and the lives
of each eligible child for 2,500 dollars. Employees can elect up to five multiples of
Option C. So if you have five multiples, you’ve covered the life of your spouse for 25,000
dollars and the lives of your eligible children for 12,500 dollars each.
Basic is an even better value for younger employees because they automatically get an
Extra Benefit without paying any additional premium. The Extra Benefit increases the amount
of Basic payable at your death using a multiplication factor based on your age. It doubles the Basic
benefits for employees who die at age 35 or younger, then gradually reduces after age
35 until there is no Extra Benefit at age 45 and older.
For example, suppose you have Basic and an annual salary of 47,500 dollars, so your Basic
insurance amount is 50,000 dollars. If you die at age 35, your beneficiaries would receive
100,000 dollars: 50,000 in regular Basic benefits multiplied by the Extra Benefit factor of
2. If you die at age 40, your beneficiaries would receive 75,000 dollars: 50,000 in regular
Basic benefits multiplied by the Extra Benefit factor of 1.5. If you die at age 45, there
is no Extra Benefit; only the 50,000 dollars of regular Basic benefits would be payable.
The Extra Benefit is not available with any Optional coverage.
FEGLI benefits are payable regardless of the cause or location of death. But in the case
of an accidental death, additional benefits may be payable.
For employees, Basic and Option A come with free accidental death and dismemberment coverage
known as AD&D. AD&D benefits are payable in addition to regular Basic and Option A benefits.
AD&D is paid when you sustain a bodily injury solely through violent, external, and accidental
means, then as a direct result of that injury, independent of all other causes, within one
year, you lose your life, a limb, or your eyesight in one or both eyes.
For Basic, AD&D pays a full basic insurance amount for an accidental death, a half basic
insurance amount for a single dismemberment, or a full basic insurance amount for the loss
of two or more limbs. So for example, if your basic insurance amount was 50,000 dollars
and your death qualified as accidental under AD&D, your beneficiaries would receive 100,000
dollars: that’s 50,000 in regular Basic benefits and an additional 50,000 in AD&D benefits.
AD&D benefits work under Option A similarly. The Extra Benefit and AD&D can both be payable
in some cases, but AD&D is based on the employee’s regular basic insurance amount; the multiplication
factor is not included in the AD&D calculation. New employees who are eligible for FEGLI life
insurance are automatically enrolled in Basic. Most new employees are eligible for Basic;
check with your human resources office if you’re unsure of your eligibility.
If you want to elect any of the Optional insurance we just covered, submit standard form SF 2817
to your human resources office within 60 days of your appointment date.
This is also a good opportunity for you to designate beneficiaries for the FEGLI coverage
on your life, if you wish to do so. More on designations in a moment.
If you do not want any FEGLI coverage, submit form SF 2817 to your human resources office
waiving Basic. You can reduce or cancel FEGLI coverage at any time, but if you submit the
form waiving Basic before the end of your first pay period, you won’t pay any premiums.
You may also be able to take some of these actions using your agency’s online human resources
system. Check with your human resources office to see if your agency does this.
For the FEGLI coverage on your life, you can name any beneficiary or beneficiaries you
want, including a trust. You can also change beneficiaries at any time. To change beneficiaries,
submit Standard Form 2823 to your human resources office. The form is available at opm.gov/forms
or you can do a web search for SF 2823. Remember to keep your designation current.
If your family experiences any major life event like marriage, divorce, birth, or death,
consider whether you need to update your FEGLI designation. If one of your beneficiaries
has a change of address, submitting an updated designation that shows the new address will
help FEGLI contact them after your death. Most employees never submit a designation.
If you die and your agency does not have a valid designation on file prior to death,
your FEGLI life insurance will be paid to the person or persons provided by law. This
is called the order of precedence. If you have a surviving spouse, your FEGLI benefits
would be paid to your spouse. If you don’t have a surviving spouse, then to your child
or children in equal shares, and to the descendants of any child that died before you. If you
have none of the above, then to your parents in equal shares, or all to your surviving
parent. If you still have none of the above, then to the executor of your estate. If no
executor, then to your next of kin according to the laws of the state where you lived.
Please note that this order of precedence, or even a designation, can be superseded if
you have assigned your FEGLI coverage or if your agency has a valid court order on file.
It’s important to note that FEGLI is term life insurance, which means it does not build
up a cash value. You cannot cash out your life insurance or borrow against it. If you
cancel FEGLI, you are not entitled to any money back.
However, you can transfer ownership of your FEGLI life insurance to another person, trust,
or corporation. This is called assignment. You continue to pay the premiums, but at your
death, instead of payment being made to your beneficiaries, payment would be made to your
assignee or your assignee’s beneficiaries. Common reasons for assignment include complying
with a divorce court order, tax advantages, or to obtain cash before you die. But be careful
with assignment because it’s irrevocable, which means once you assign, you can’t change
your mind or cancel the assignment. You also lose the ability to make most FEGLI changes,
including designating beneficiaries. For more information about assignment, contact
your human resources office, read our assignment frequently asked questions at opm.gov/FAQs,
and review form RI 76-10 available at opm.gov/forms or do a web search for RI 76-10.
By law, if a certified copy of a valid court order is on file with an employee’s human
resources office prior to death, FEGLI benefits must be paid under the terms of that court
order. The court order will supersede any designation and the order of precedence. Anyone
can submit a court order, including a former spouse or an attorney. To ensure enforceability,
court orders should unambiguously address the Federal Employees’ Group Life Insurance
Program, FEGLI. FEGLI has no annual open season; life insurance
open seasons are infrequent. However, as an employee there are many FEGLI actions you
can take at any time. You can enroll or increase coverage at any time by providing satisfactory
evidence of medical insurability, which basically means passing a physical exam. Using this
method you can add any FEGLI coverage except Option C. At least one year must have passed
since you last declined or waived FEGLI coverage. You can also cancel or reduce life insurance
at any time. You can change beneficiaries at any time.
To take any of these actions, contact your human resources office.
Employees can also enroll in any or all coverage that FEGLI offers, or increase coverage up
to the maximum that FEGLI offers, including Option C, within 60 days after a FEGLI life
event. Qualifying life events are marriage, divorce, death of your spouse, and acquisition
of an eligible child. Generally, eligible children are your unmarried dependent children
under age 22. FEGLI has competitive premiums. For Basic
coverage, the government pays one third of the premium and you pay the rest. Each pay
period, biweekly employees pay 15 cents for each thousand dollars of Basic coverage. For
Postal employees, the government pays the entire Basic premium.
For optional coverage, there is no government contribution; you pay the entire premium.
Optional premiums increase every five years starting at age 35. To see the current optional
premiums, visit opm.gov/life and click Employee on the right side of the screen.
To see how much FEGLI coverage you have, ask your human resources office for a copy of
your most recent election form. Then you can use the online FEGLI calculator at opm.gov/life
to see how much coverage you have based on your current salary. You may also be able
to find this information on your agency’s online human resources portal or in Box 27
on your most recent SF 50 Notification of Personnel Action.
For a copy of your most recent designation of beneficiaries, contact your human resources
office. FEGLI offers group life insurance, so it does
not issue individual policies or policy numbers. To file a claim, your beneficiaries should
report your death to your agency, or to OPM’s Retirement Office if you’ve retired or if
you’ve been on worker’s compensation for more than one year. Then your beneficiaries should
each submit claim form FE-6 to MetLife. The form is available at opm.gov/life or do a
web search for FE-6. For more information about FEGLI life insurance,
including current premiums, the benefit and premium calculator, forms, beneficiary instructions,
and answers to frequently asked questions, visit opm.gov/life.

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