Why Compare FEGLI at Age 45
Your Federal Employees Group Life Insurance (FEGLI) benefits after age 45
There is no doubt that FEGLI provides a host of federal employee life insurance benefits under the age of 45, including various Optional FEGLI coverages which allow federal employees to extend the coverage to their family members. However, FEGLI may not be the most suitable option for people of a specific age group, in particular those above 45. This is due to the following reasons.
Increasing FEGLI Rates
Thecosts for FEGLI, or FEGLI Rates increase every 5 years starting after the age of 45, when the employee turns 50, 55 and so on until retirement.
High FEGLI Rates
The main criticism for FEGLI arises in the fact that it charges quite a high premium for people over the age of 45. The average FEGLI premium can be about 3 times more expensive (sometimes even more expensive, still) than many A-rated carriers, and these costs increase as a person ages.
Fixed Premium with Alternatives
The alternatives to FEGLI have another advantage; the rates for the 20 year terms can be fixed. Though this may vary from insurance to insurance, a fixed rate offers numerous advantages. The total accumulated costs for the insurance over a 20 year period would be relatively much lower as compared to the FEGLI plan.
At age 50, the annual premium can go up to $2,000, increasing to around $3,000 at age 55 and an astounding $6,000 amount at 60. Compared to the fixed $740 insurance plan, FEGLI gets up to 8 times more expensive for federal employees approaching retirement age!
Let’s take an example of a person with an annual salary of $100,000 applying for FEGLI at the age of 45. The insurance premium can be fixed at about $1200 until retirement. The total cost for the 20 year plan would be $24,000 (not including the fact that the FEGLI premium increases every 5 years).
As compared to a fixed price alternative of $740, the 20 year term would cost a total of $14800. That amounts up to a saving of more than $9000! This is why comparing FEGLI is a must for people above the age of 45.
For more information, visit www.comparefegli.com