Everything You Need to Know About Different FEGLI Options
One of the most important things that you need to ensure as an employee is to make sure that you can provide a nice and secure future for your loved ones. If you are a federal employee, Federal Employee Group Life Insurance plan (FEGLI) gives you the chance to enrol in the largest life insurance program in the world. This plan alone covers over 4 million federal employees and their families. Given that this plan essentially impacts your life profoundly, it is important that you understand all the nuances of this plan. The unfortunate part is that most federal employees don’t necessarily understand different kinds of options that this plan has to offer.
Different employees based on their working years, status and the people relying on them are likely to have different expectations out of this plan. As you are most likely to be signed up for this plan, let us help you to understand different FEGLI options to make sure you get the best out of your plans.
The first thing that you need to understand is the basic plan of FEGLI. Your basic salary will be rounded up to nearest thousand marks so for example if you earn $25,200, it’ll be rounded up to $26,000. $2000 will be added on top of it so your basic coverage death benefit will round up to $28,000.
There is a 15 cent/1000 charge for coverage. The good thing is that this charge doesn’t increase with time. So if you are only enrolling for the basic plan you don’t need to think it will get too expensive.
There is some variance in the system on the basis of your age. If you are over 35 year’s age you get double your coverage with absolutely no additional costs. Although benefits won’t keep existing over your lifetime. The coverage will start declining by 10% after each year meaning there will be no added coverage once you become 45. From that point onwards, you will only receive your basic coverage.
If you want additional coverage on top of your basic coverage here is the first alternative for you. Option A gives you an additional coverage of flat $10,000. The cost of this coverage though varies depending on your age and keeps on going up every five years interval.
Although the premium keeps on increasing don’t be confused about the fact that the coverage still remains the same.
If you think the additional coverage of FEGLI Option A isn’t good enough and you want even more based on your income then FEGLI Option B might be the best suited plan for you.
This plan offers an additional coverage of 1 to 5 times of your basic pay. Just like Option A cost of this coverage though varies depending on your age and keeps on going up every five years interval.
In case of FEGLI vs private insurance, this cost comes out on top beating most private insurance plans that are on offer till you turn 50.
The increase of cost is generally pretty reasonable till you turn 50 as you have to pay a max of $0.09/$1000 for Bi-weekly holding but the numbers keep on increasing like 0.14, 0.28, 0.60, 0.72, 1.2, 1.4 & 2.8 for every 5 years interval. So it is very evident that you need to plan accordingly unless you might have to pay whole lot more than you would want to.
FEGLI Option C is best known as the family coverage plan. This is a plan where you have to elect coverage plans for your eligible children and your spouse. An increment of $5,000 when it comes to your spouse and $2,500 for children. There is a chance of electing five multiples for each family member. Like the other two FEGLI Options here too the cost varies with your age and increases every 5 years.