Reg Jones Expert's View

When you came to work for the government, you were automatically covered under the Federal Employees’ Group Life Insurance program unless you declined that coverage in writing no later than the end of your first pay period.

That life insurance coverage comes in two types. The first is Basic, which provides group term life insurance without the need for a medical examination. Basic FEGLI features accidental death and dismemberment insurance (AD&D), which provided double indemnity protection.

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With one exception, the cost is shared between you and the federal government. Here’s the exception. Through union negotiations, the Postal Service pays the entire cost of Basic insurance for its employees; the government pays a third of the total cost of Basic for other federal employees.

FEGLI also offers three optional forms of insurance, two of which are insurance on the enrollee and the other is on the enrollee’s family. You must be enrolled in Basic to have any of those and again, no proof of insurability is needed. However, the enrollee pays the full cost.

There’s a chance that the elections you made when you first were hired are still in effect. Unlike the Federal Employees Health Benefits program, FEGLI does not hold regular open seasons. Its open seasons occur only when there has been a change in the program’s terms or in premium rates; the last one was in 2016 and there is not another on the horizon.

However, like FEHB, the FEGLI program does allow new enrollments or changes in existing enrollments due to certain life events such as marriage. It also allows those actions at other times, but only on submitting proof of insurability.

Basic life insurance
Your Basic life insurance amount is equal to your salary –the amount from which retirement deductions are taken, and may exclude some forms of income – rounded up to the next higher thousand dollars, plus $2,000. That amount changes every time your income changes, as do the premiums.

Your AD&D coverage is equal to your Basic coverage if you were to die or lose two or more parts of your body, such as a hand, foot or eye, or half that amount for the loss of one part. Of note is the fact that the amount payable under AD&D varies according to your age.

If you are age 35 or under, the AD&D amount is twice the amount of your Basic life insurance amount. After age 35, the multiplier drops by 10 percentage points until it is equal to your Basic insurance amount at age 45 or older.

Additional life insurance
In addition to Basic life insurance, there are three other life insurance benefits that are optional. If you choose any of them, you will be responsible for paying 100 percent of the cost.

Option A – Standard Insurance
If you are covered by Basic life insurance, you can buy an additional $10,000 worth of coverage at your own expense. While the premium rates are modest for younger employees, they increase over time.

Option B – Additional
Option B allows you to elect an amount equal to one, two, three, four or five times your annual basic pay, after rounding it up to the next $1,000.

Option C – Family
Option C allows you to provide coverage for your spouse and eligible dependent children under one policy at your own expense. Just as with Option B, you can elect up to five multiples of coverage, with each multiple equaling $5,000 for your spouse and $2,500 for each of your children. The premium cost per multiple is a function of your age.

Designation of beneficiary
When you joined the government you were asked to fill out a lot of forms. Among them was a designation of beneficiary form where you wrote down the names of those who you wanted to benefit from your life insurance if you died. Odds are that you haven’t checked what you put there in years. If that’s the case, you need to revisit that decision.

Often the name or name or names you put down aren’t the one(s) you would pick today. If that’s the case and you don’t change that designation. when you die, the proceeds of your life insurance won’t go to the right person or persons.

For example, if you were single at the time and designated your parent(s) or a brother or sister when you came to work for the government and later got married, that original designation still would prevail regardless of whether that still would be your intent.

To change a FEGLI designation, all you need to do is fill out a Standard Form 1823, available from you personnel office or online at www.opm.gov/forms.

If you didn’t fill out a designation of beneficiary form for your life insurance, it will be distributed according to the standard order of precedence:
• your spouse
• if you have no spouse, to your child or children in equal shares, with the share of any deceased child distributed among the descendents of that child
• if you have no children, to your parents in equal shares or the entire amount to the surviving parent
• if you have no parents, to the duly appointed executor or administrator of you estate
• and, finally, to your next of kin under the laws of the place you were living at the time of your death

Note: If you are divorced, what happens to your life insurance benefit may have been settled by a court order, which would override any beneficiary designation you make.

To find out who you’ve designated as a beneficiary or beneficiaries, go to your servicing personnel office and check your Official Personnel File. That way you can be sure that the ones on file are the ones you now want to receive the benefits in the event of your death.

FEGLI Can Change Along with Your Family Situation

What Changes with FEHB When you Retire?

Key Provisions of FEHB for Federal Employees

ask.FEDweek.com: FEGLI – Federal Employees’ Group Life Insurance

2020 Federal Employees Handbook