Some Of The Most Common Frequently Asked Questions

(please click the title or question box to reveal the answer)

Q1. What is FEGLI?

FEGLI stands for Federal Employees' Group Life Insurance.

Q2. Do I have to wait for "open season" to replace or cancel my FEGLI benefits?

You don't have to wait for "open season" to cancel! If you are an employee, you can cancel or reduce your FEGLI plan at any time by submitting this form to your human resources office. Before you cancel your FEGLI, please make sure you have a backup life insurance policy otherwise your family will not be covered.

I can gladly assist with helping you find either more affordable or additional life insurance coverage and walk you through on how to properly fill out your FEGLI cancellation form.

Q3. Is FEGLI expensive?

Depending on the plan, it may not be expensive.

The Basic plan is not expensive when you're working; it only is when you retire and decide to keep it. Also, currently, the Option B multiple is cost-prohibitive because the price substantially increases every five years.

The comptroller General of the United States reported on April 7, 1986 that private sector insurance programs typically provide greater coverage at much less cost to the employees than the FEGLI Option B program.

Q4. Is FEGLI inferior?

Again, depending on the type of FEGLI plan you have, it may not be inferior.

If you decide to keep your Basic after retirement, you may be required to pay a portion or 100 percent of the cost depending on which "reduction" option you choose (please see Q8 for more information). Also, currently, the FEGLI Option B plan is very inferior due to its rising cost every five years.

In fact, the Government Accounting Office reported in April of 1986 that the FEGLI Option B program is inferior to many private insurance plans. Typically, most private insurance plans offer the same or more coverage at least half the cost with a fixed premium compared to FEGLI.

Q5. Where do I go to lookup my future rate increases for my additional Option B?

The FEGLI Calculator can help you figure out your coverage and premiums. If you need further help using it, please contact me and I will be more than happy to assist.

Q6. Who pays for the FEGLI Optional B coverage?

Federal employees pay the full cost of the additional optional B insurance, which monumentally rises every five years.

Q7. Who pays for Basic FEGLI coverage?

If you are a non-postal federal employee, the cost of the basic insurance is shared by you as the employee and the Federal Government. The Federal Government will pay one-third of the premium so long as you're working.

Q8. Does FEGLI Basic Life Insurance decrease over time?

Yes; but only when you retire; not when you're currently working!

For Basic insurance, you have three options to choose from at retirement:

1. Elect a 75 percent reduction - this means that after the insured reaches age 65, their coverage will reduce two percent per month for a total duration of five years. After this reduction period, the insured will be left with 25 percent of their basic salary. There is no out-of-pocket expenses for this election.

2. Elect a 50 percent reduction - this means that after the insured reaches age 65, their coverage will reduce 1 percent per month for a total duration of 50 months. After this reduction period, the insured will be left with 50 percent of their basic salary and be required to pay for this coverage.

3. Elect a no reduction - this means your coverage doesn't reduce over a set period of time. You get to keep your full Basic coverage even after you retire. However, you'll be required to pay a much higher premium for the rest of your life.

Q9. Is there a FEGLI cost-effective alternative?

Yes, assuming you have the option B multiple!

You can obtain a private life insurance policy designed to meet the federal employee's needs. It can cost a lot less (in most cases, at least 50 percent) and give you better benefits and coverage without having to pay higher premiums every five years. If you qualify, you can even obtain a plan with some “living benefits".

Q10. How do I cancel my FEGLI Option B?

Before you cancel any life insurance, we would first wait until you receive a final offer in writing from the private life insurance company. From there, I will gladly walk you through on how to properly fill out the FEGLI cancellation form, which you can obtain here.

Still Have More Questions?

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