How Does The FEGLI Work?
The FEGLI policy is what’s called a “Group Term” policy. You are covered for a set amount ( a multiple of your Salary) for as long as your work and in retirement as long as you pay the premium. To be eligible for the program all you have to do is work for the Federal Government. Health is not a issue at all if you sign up when you first start in the Government. This makes it very attractive those people with existing health issues.
When you begin working for the Federal Government you are automatically enrolled into the program. The plan that you get automatically is the “Basic” Plan which covers your salary plus 2 thousand dollars. The federal government partially pays for a portion of this. If you work for the Postal service your basic is completely free. The basic plan also offers double the coverage for employees under the age of 35 with no additional cost. “Option A” is an option to add $10,000 of insurance. “Option B” allows you to add a multiple of your salary to insurance amount, up to five times.
Option B has very different pricing than the other options. Pricing is based on your current age and adjust every 5 years. This 5 year adjustment is for the ages ending in 5 and 0. This can get very costly the older you become the premiums jump significantly doing your 50’s. A example of this is
Mary Age 50 making $100,000 a year
At 50 pays $55 a pay
At 55 pays $100 a pay
At age 60 pays $220 a pay
Option C is the part of the plan that provides protection for your spouse and children. The protection is in multiples of $5,000 and $2,500. The spouse multiples are for $5,000 and the children $2,500. You can get up to 5x for each multiple.
You can increase FEGLI options during certain life events (Marriage, Childbirth, Adoption,etc) as well as open enrollments. Open enrollments however are very rare and this should not be something that an employee waits for. In fact one just passed in 2016. So the next one is likely far off.
The way to be proactive in this regard is to consult with a professional to see what your options are outside the government. You can enroll in a private plan at anytime no matter the life circumstances.