Fegli Life Insurance: Is It Worth The Cost?

Federal Employees' Group Life Insurance (FEGLI) is a program that provides standard term life insurance benefits to federal employees at a discounted group rate. It is the largest group life insurance program in the world, covering over 4 million federal employees and retirees, as well as their families. While FEGLI is affordable and convenient, with automatic enrolment for federal employees, it offers minimal protection and may not provide the best coverage for individuals and their families. This article will explore the pros and cons of FEGLI to help you decide if it is a good deal for your needs.

FEGLI is a good deal for federal employees who are uninsurable

Federal Employees' Group Life Insurance (FEGLI) is a good deal for federal employees who are uninsurable because it is available to them even if they have major health issues. FEGLI covers more than 4 million federal employees and is one of the largest group life insurance programs in the world. The United States government started the program in 1954 to provide life insurance for federal employees and their families.

FEGLI is Group Term Life Insurance available to all federal employees as part of their federal benefits package. New employees are automatically enrolled in the Basic Insurance, which is equal to 1x their annual rate of basic pay, rounded up to the next $1,000, plus $2,000. Employees pay two-thirds of the premium, while their agency pays one-third. The US Postal Service pays the full cost of Basic Insurance for postal employees. Every employee pays the same rate for Basic Insurance, regardless of age.

FEGLI is a good option for federal employees who are uninsurable because it does not require a medical exam for enrollment. This means that employees with health issues can still obtain life insurance coverage. Additionally, FEGLI provides coverage immediately upon hiring, with no underwriting. This is especially beneficial for employees who need coverage right away and cannot wait for the underwriting process of a private insurance policy.

While FEGLI has its advantages, it is important to consider its limitations as well. The coverage amount may be lower than what is needed for comprehensive financial protection, especially for those with dependents. FEGLI also has rising premiums as employees get older, and the coverage may decrease after retirement. Additionally, FEGLI does not accumulate cash value, and there are no conversion options or riders available.

In conclusion, FEGLI is a good deal for federal employees who are uninsurable because it offers them life insurance coverage that they may not be able to obtain elsewhere. However, it is important to weigh the benefits and limitations of FEGLI to determine if it is the best option for their individual needs.

FEGLI is a good deal for new hires

The Federal Employees' Group Life Insurance (FEGLI) Program is a good deal for new hires for several reasons. Firstly, it provides group term life insurance coverage to federal employees, which is one of the benefits of working for the federal government. Secondly, new employees are automatically enrolled in the Basic Insurance coverage, which provides a death benefit close to their annual rate of basic pay, rounded up to the next $1000, plus $2000. This means that new hires have coverage right away without having to undergo any underwriting process.

Another advantage of FEGLI for new hires is that the cost of Basic Insurance is shared between the employee and the government. The employee pays two-thirds of the total cost, while the government pays one-third. This makes FEGLI relatively competitive with the cost of private term insurance. Additionally, the premium cost for Basic Insurance is not tied to age or health factors, so a 25-year-old new hire pays the same premium as a 60-year-old approaching retirement. This can be beneficial for younger employees who may find it cheaper than private insurance.

Furthermore, FEGLI offers optional insurance options that new hires can add to their Basic coverage. These include Option A, which provides an additional $10,000 death benefit; Option B, which allows employees to add 1x, 2x, 3x, 4x, or 5x their annual rate of basic pay as additional insurance; and Option C, which provides family coverage for a spouse and eligible dependent children. While these options come at an additional cost paid by the employee, they offer flexibility and the opportunity to increase coverage as needed.

In conclusion, FEGLI is a good deal for new hires as it provides immediate coverage, shared costs with the government, and the option to add additional coverage. However, it is important for new employees to carefully evaluate their needs and consider other alternatives in the market to make an informed decision about their life insurance choices.

FEGLI is a good deal for those who want to continue coverage into retirement

Federal Employees' Group Life Insurance (FEGLI) is a good deal for those who want to continue coverage into retirement. FEGLI is a group term life insurance program that covers over 4 million federal employees and retirees, as well as their family members. It is the largest group life insurance program in the world and was established by the Federal Government in 1954.

One of the biggest advantages of FEGLI is that it can be continued into retirement, providing a safety net for retirees. While the coverage amounts may decrease in retirement, especially after reaching the age of 65, it still offers valuable protection. Additionally, retirees may be able to continue their FEGLI coverage at no additional cost, as the post-65 benefit is included in the FEGLI Basic level premium. This means that younger enrollees' premiums help fund the cost of coverage for retirees, keeping the overall costs competitive.

Another benefit of FEGLI is that it provides automatic coverage for new federal employees, with no medical exam or underwriting required. This can be especially advantageous for those with health issues who may struggle to obtain individual coverage. FEGLI also offers the convenience of having premiums deducted directly from paychecks.

While FEGLI has its advantages, it is important to consider its limitations as well. The coverage amounts may not be sufficient for those with extensive financial obligations or multiple dependents. Additionally, FEGLI premiums increase with age and can become cost-prohibitive for older individuals. Furthermore, FEGLI does not accumulate cash value, and there are limited options for customization or adding riders.

In summary, FEGLI is a good deal for those who prioritize continued coverage into retirement and value the convenience of automatic enrollment. However, it may not offer sufficient coverage for those with more complex financial needs. For those individuals, supplementing FEGLI with private term life insurance or exploring alternative options may be advisable.

FEGLI is a good deal for those who want to avoid a medical exam

The Federal Employees' Group Life Insurance (FEGLI) program is a low-cost group term life insurance option for federal employees. It is ideal for those who need basic coverage, such as those who want to avoid a medical exam. While FEGLI offers minimal protection, it is still a good deal for those who want a simple, affordable plan without undergoing a health assessment.

One of the biggest advantages of FEGLI is its automatic enrollment for federal employees, making it convenient and accessible. The coverage amount is calculated based on the employee's annual salary, rounded up to the nearest thousand, plus an additional $2,000. This basic coverage is free for postal employees, while other federal employees pay a low bi-weekly rate. Importantly, age is not a factor in the cost of basic FEGLI coverage, making it an attractive option for those wanting to avoid medical exams that typically come with traditional insurance plans.

However, it's important to note that FEGLI rates are not constant and will increase over time, especially after the age of 50. Additionally, the coverage amounts offered by FEGLI may be insufficient for those with more complex financial needs or dependents. In such cases, supplementing FEGLI with private term life insurance may be necessary.

For federal employees seeking basic life insurance coverage, FEGLI is a good deal. It provides a no-frills, affordable option without the need for medical exams. However, those with more specific requirements or seeking higher coverage amounts may need to explore additional insurance options.

FEGLI is a good deal for those who want to avoid age-banded pricing

Federal Employees' Group Life Insurance (FEGLI) is a good deal for those who want to avoid age-banded pricing. FEGLI is a group term life insurance program that covers over 4 million federal employees and retirees, as well as their family members. It is available to all federal employees as part of their federal benefits package, and new employees are automatically enrolled in the Basic Insurance plan.

The cost of FEGLI Basic Insurance is shared between the employee and the government, with employees paying two-thirds of the total cost and the government paying one-third. Importantly, age is not a factor in the cost of FEGLI Basic Insurance. This means that employees of all ages pay the same rate, which can be beneficial for older employees who would otherwise face higher rates due to increased health risks.

In contrast, the additional coverage options offered by FEGLI (Option A, Option B, and Option C) are based on age bands, with premiums increasing as employees enter new age groups. However, even with these additional coverage options, FEGLI can still be a good deal for those wanting to avoid age-banded pricing on their Basic Insurance.

While FEGLI may not provide adequate coverage for those with more comprehensive insurance needs, it can be a cost-effective option for those looking for basic coverage. For those who want to avoid age-banded pricing and have minimal insurance needs, FEGLI is a good deal.

Frequently asked questions