Reg Jones Expert's View

Last week we looked at Basic insurance and spelled out the choices for continued coverage available to you when you retire. Now, let’s turn to the first of three kinds of optional life insurance that are available to you – Option A (Standard).

Note that to purchase this option and/or either of the other two, you must be covered by Basic. Also note that under all three, the cost is entirely at the enrollee’s expense, with no employer contribution.

Option A allows you to buy an additional $10,000 worth of coverage. While the premium rates are modest for younger employees, they increase over time as you’ll see in the following listing.
Under age 35 $0.20
Age 35 through 39 $0.30
Age 40 through 44 $0.40
Age 45 through 49 $0.70
Age 50 through 54 $1.10
Age 55 through 59 $2.00
Age 60 through 64 $6.00

The premiums are different if you are a retiree and they also increase over time, as you’ll see below.
Under age 35 $0.43
Age 35 through 39 $0.65
Age 40 through 44 $0.87
Age 45 through 49 $1.52
Age 50 through 54 $2.38
Age 55 through 59 $4.33
Age 60 through 64 $13.00

In both cases. premium deductions will stop at the end of the calendar month in which you reach your 65th birthday. At that point, Option A coverage will automatically decline by 2 percent per month until it reaches 25 percent of its face value—that is, $2,500.

When Option A was created decades ago, $10,000 was a lot of money. While the value of Option A has eroded over time, if you are just starting out as a government employee and have a young family, it may be just what you need. For others—unless you are someone who is retiring on disability and want an extra small measure of protection for your family—it may be financially unappealing. Again, this is solely a voluntary benefit.

Read more about FEGLI coverage after retirement at ask.FEDweek.com