Haris Ashley
The United States Postal Service offers life insurance to its employees through the Federal Employees' Group Life Insurance (FEGLI) Program. The basic coverage cost is fully paid by the Postal Service, with the option to purchase additional coverage through payroll deductions. This insurance is available to full-time employees, and the cost depends on the employee's age and annual pay upon retirement. Employees are also offered Group Term Life Insurance by WAEPA (Worldwide Assurance for Employees of Public Agencies, Inc.), a nonprofit organization that has provided insurance to federal civilian employees since 1943.
| Characteristics | Values |
|---|---|
| Life insurance provider | Federal Employees' Group Life Insurance (FEGLI) Program |
| Who is eligible? | Full-time employees of the United States Postal Service under the age of 70 |
| Cost of basic coverage | Paid for by the Postal Service |
| Cost of additional coverage | Paid through payroll deductions |
| Maximum coverage | Up to $1.5 million in coverage for eligible members |
| Coverage for family members | Eligible member's coverage extends to spouse and children |
| Coverage after retirement | Coverage can be continued into retirement but must be paid for by the retiree |
| Coverage after age 65 | Premium goes to zero, but the value of the policy declines by 2% per month until it reaches 25% of the original value |
What You'll Learn
- Full-time USPS employees have access to Federal Employee Group Life Insurance (FEGLI)
- FEGLI coverage can be continued into retirement
- The cost of FEGLI's Basic coverage is paid by the USPS
- Employees can purchase additional FEGLI coverage through payroll deductions
- WAEPA is a non-profit organisation that offers Group Term Life Insurance to USPS employees
Full-time USPS employees have access to Federal Employee Group Life Insurance (FEGLI)
The FEGLI program offers flexibility, with the option to choose from a range of plans, including Fee-For-Service, Health Maintenance Organizations (HMOs), and High Deductible & Consumer-Driven Health Plans. The cost of the plan is made more affordable as employee premium contributions are not subject to most taxes.
It is important to note that FEGLI coverage does not automatically continue into retirement. Employees must meet certain criteria to continue coverage into retirement, including having the coverage for five years of service immediately before retiring or being a FERS retiree who postponed receiving an annuity in the FEGLI program for five years before separation.
USPS employees can also explore alternative life insurance options, such as the Worldwide Assurance for Employees of Public Agencies, Inc. (WAEPA). WAEPA is a nonprofit organization that provides Group Term Life Insurance and other services to federal civilian employees. Their premiums are often lower than FEGLI, and their coverage extends to spouses and children.
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FEGLI coverage can be continued into retirement
As a working postal employee, your basic Federal Employee Group Life Insurance (FEGLI) coverage will not automatically continue into your retirement. However, you can choose to continue your FEGLI coverage into retirement if you meet certain requirements.
Firstly, you must have been enrolled in FEGLI for the five years before your retirement, or from your earliest opportunity to enrol. If you meet this requirement, you must then choose from the following options for your basic coverage when you turn 65 or retire, whichever is later:
- 75% reduction: Your basic coverage reduces by 2% each month until it reaches 25% of its pre-reduction amount. This option is free of charge once the reductions begin and remains free until death.
- 50% reduction: Your basic coverage reduces by 1% each month until it reaches 50% of its pre-reduction amount. There is an extra premium for this option that you will continue to pay until death, or until you switch to the 75% reduction or cancel your basic coverage.
- No reduction: You maintain the same amount of basic coverage you had when you were employed. There is a larger extra premium for this option that you will continue to pay until death, or until you switch to the 75% reduction or cancel your basic coverage.
If you do not submit the relevant form (SF 2818) to your human resources office before retiring, you will be defaulted to the 75% reduction option.
In addition to the basic coverage, you may also continue your FEGLI Option A-Standard, Option B-Additional, and Option C-Family insurance coverages into retirement. The cost of these options varies depending on your age group.
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The cost of FEGLI's Basic coverage is paid by the USPS
If you are a USPS employee, you may be eligible for life insurance through the Federal Employees' Group Life Insurance (FEGLI) program. This program covers more than 4 million postal and federal employees, as well as retirees and their family members.
Under FEGLI, most federal employees are eligible for a Group Term Life insurance policy. This includes a Basic Insurance policy and three types of optional insurance: Option A (Standard Optional Insurance), Option B (Additional Optional Insurance), and Option C (Family Optional Insurance).
The cost of FEGLIs Basic coverage is shared between the employee and the government, with the employee paying two-thirds of the bi-weekly premiums. However, for USPS employees, the U.S. Postal Service pays the entire cost of the Basic Life Insurance. This means that USPS employees do not have to pay anything for their Basic coverage.
The Basic Insurance amount is equal to your annual basic salary, rounded up to the next higher $1,000, plus $2,000. For example, if your annual salary is $35,260, your Basic Insurance coverage would be $38,000 ($36,000 plus $2,000).
It is important to note that while USPS employees do not pay for their Basic coverage, they may still need to pay for any optional insurance they choose to enrol in. The cost of optional insurance depends on the employee's age.
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Employees can purchase additional FEGLI coverage through payroll deductions
Employees of the United States Postal Service (USPS) can get life insurance through the Federal Employees' Group Life Insurance (FEGLI) Program. The basic coverage cost is fully paid by the Postal Service, but employees can also choose to purchase additional coverage through payroll deductions.
The FEGLI program is a valuable benefit for USPS employees, as it provides life insurance coverage at reasonable rates without the need for medical exams. The coverage amount is based on the employee's annual basic pay, rounded to the nearest thousand, plus $2,000. Employees can choose to pay for multiples of their base pay to increase their coverage. For example, a 30-year-old employee might pay $8 per pay period for 5 times their base pay, but this amount will increase as the employee gets older. It is important for employees to review their coverage periodically, as the cost of FEGLI increases over time and can become unaffordable if not properly planned for.
When employees are first hired, they often elect to pay for additional coverage, assuming it is a great benefit. However, as the FEGLI program is subject to change, it is important for employees to understand all the details of their benefit plan to make informed decisions. Employees should also be aware that their FEGLI coverage may not automatically continue into their retirement. To continue coverage into retirement, employees must meet certain requirements, such as having the coverage for five years of service immediately before retiring or being a FERS retiree who postponed receiving an annuity in the FEGLI program for five years before separation.
In addition to FEGLI, USPS employees have other options for life insurance coverage. WAEPA (Worldwide Assurance for Employees of Public Agencies, Inc.), a nonprofit organization, offers Group Term Life Insurance and other benefits to federal civilian employees. WAEPA's Group Term Life Insurance provides up to $1.5 million in coverage for eligible members, which is not lost if they change jobs or retire, even after leaving federal government service. Members' premium rates are often lower than FEGLI, and the coverage extends to spouses and children.
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WAEPA is a non-profit organisation that offers Group Term Life Insurance to USPS employees
If you are a civilian employee of the United States Postal Service (USPS) under the age of 70, you may be eligible for Group Term Life Insurance from WAEPA (Worldwide Assurance for Employees of Public Agencies, Inc.), a non-profit organisation that has been providing insurance to federal civilian employees since 1973.
Group Term Life Insurance from WAEPA offers up to $1.5 million in coverage for eligible members, which will not be lost if you change jobs or retire – even after leaving the federal government. This coverage also extends to spouses and children.
Since 1943, WAEPA has been putting the needs of federal employees and their families first, offering exclusive Group Term Life Insurance coverage to current and former civilian federal employees. WAEPA's rates are calculated across the entire group rather than for individuals, resulting in exclusive pricing.
In addition to Group Term Life Insurance, WAEPA also offers a range of other valuable services, including Group Short-Term Disability Insurance, which can provide up to $6,500 per month to replace lost income if you are unable to work due to a covered illness or injury. WAEPA also provides Guaranteed Issue Life Insurance, which offers qualifying federal employees, including USPS employees, coverage of up to $100,000 within their first year of hire, without the need for medical documentation or complex paperwork.
On average, members who switch from FEGLI to WAEPA save over $300 per year. WAEPA's Group Term Life Insurance coverage is also more flexible, allowing members to keep their coverage even if they retire or leave the federal government, whereas FEGLI's coverage is capped at 5 times your federal salary.
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Frequently asked questions
The basic FEGLI coverage you had as a working postal employee did not automatically continue into your retirement. The coverage was paid for in full by the U.S. Postal Service and was equal to your annual basic pay, rounded to the nearest thousand, plus $2,000.
You can continue your FEGLI coverage into retirement if you meet one of the following two conditions: 1) you had the coverage for five years of service immediately before retiring, or 2) you were a FERS retiree who had postponed receiving an annuity in the FEGLI program for five years before your separation.
WAEPA (Worldwide Assurance for Employees of Public Agencies, Inc.) is a nonprofit organization that has provided Group Term Life Insurance to federal civilian employees since 1973. On average, members who switched from FEGLI to WAEPA save over $300 a year.
