Tuesday, January 3, 2023

Federal Government Life Insurance After Retirement

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Fegli Living Benefit Option

OPM Virtual Benefits Training – Federal Employees’ Group Life Insurance FEGLI 2021

We all hope we will never need to use this option but if you do you can elect to receive a lump sum FEGLI insurance payout if you are diagnosed to be terminally ill and have a documented medical prognosis showing a life expectancy of no more than nine months. Employees, annuitants, or compensationers enrolled in the FEGLI Program are eligible to elect a Living Benefit. /p>

Employees can choose a full or partial Living Benefit while annuitants and compensationers are limited to electing a full Living Benefit. Living Benefits are equal to theBasic Life insurance amount, plus any extra benefit for persons under age 45, that would be in effect nine months after the date of the Office of Federal Employees’ Group Life Insurance receives a completed claim for Living Benefits form. The OFEGLI is a private entity that has a contract with the Federal Government to process and pays claims under this program.

The Federal Employees’ Group Life Insurance Program

The Federal Employees’ Group Life Insurance Program offers Basic Life Insurance that is equal to your annual basic pay, rounded to the next higher $1,000, plus $2,000.

So for example, if your annual salary is $48,108, your insurance would first be rounded to $49,000, then have $2,000 added, making your basic life insurance coverage $51,000.

You can also get three types of optional insurance:

  • Option A, Standard in the amount of an additional $10,000 of coverage.
  • Option B, Additional in an amount from one to five times your annual basic pay .
  • Option C, Family provides coverage for your spouse and eligible dependent children in multiples from one to five. Each multiple is equal to $5,000 for your spouse and $2,500 for each eligible child.

If you’re in a FEGLI-eligible position, you’re automatically enrolled in Basic Life Insurance, which is effective on the first day you enter in a pay and duty status UNLESS you waive this coverage before the end of your first pay period. You do NOT get any optional insurance automatically you must complete an SF-2817, Life Insurance Election form to enroll in the coverage.

You have 31 days from your entry date to sign up for any Optional life insurance. If you do not make an election, you are considered to have waived optional insurance.

You can get all the latest information at the OPM web site, just go to

Security Notice To Users

This is an Office of Personnel Management computer system for use only by authorized users. OPM computer systems are to be used for official business. Your use of this Government system for whatever purpose is not private or anonymous. While using Government systems, your use may be monitored or recorded. Unauthorized or inappropriate use of a Government system may result in the loss or limitation of your privileges. You may also face criminal penalties or financial liability depending on the severity of the misuse. Examples of unauthorized actions include attempts or acts to access, view, upload, change or delete information on this system, modify this system, deny access to this system, accrue resources for unauthorized use, or otherwise misuse of this system are strictly prohibited. Such attempts or acts are subject to action that may result in criminal, civil, or administrative penalties.

All access or use of this system constitutes the users understanding and acceptance of these terms and constitutes unconditional consent to review, monitor, record, audit, and take action by all authorized government and law enforcement personnel.

You should read the Privacy Act Statement which is posted on the Main Page of Services Online for a description of how the information you provide in this system will be used and shared.

Privacy Act Statement

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When The Service Defaults On Statutory Funding Contributions How Is That Recorded

The required contribution amount is reported as a cost, and it reduces profits or widens losses. Because no contribution is actually made, there is no addition to fund assets. For instance, the Postal Services statutory RHBF contribution in 2015 was $5.7 billion. Together with other costs, that obligation contributed to the Services $5.1 billion net loss in 2015. However, because the Service defaulted on the payment, it obviously did not reduce cash on hand, did not add to RHBF assets, and did not reduce the unfunded retiree health benefits liability.

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What Are The Requirements To Keep Life Insurance In Retirement

New York Retirement News

You can keep your basic life insurance in retirement if all of the following conditions are met:

  • You have coverage when you retire
  • You have not converted coverage to an individual policy
  • Your annuity begins within 30 days or, plus 10 provision of the Federal Employees Retirement System and you have postponed the commencing date of your annuity, health and life insurance coverage is suspended until your annuity begins) and,
  • You were insured for life insurance for the five years immediately preceding retirement or the full periods of service when coverage was available.

You can keep your optional life insurance in retirement if all of the following conditions are met:

  • You are eligible to continue your basic coverage and,
  • You were covered by the optional life insurance for the five years immediately preceding retirement or the full periods of service when coverage was available, if less than five years.

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How Much Does Fegli Option B Cost

According to the comptroller General of the United States, private sector insurance programs typically cost less and provides greater coverage than the FEGLI program. To the surprise of many federal employees, FEGLI Option B increases every five years after you turn 45 thats a 2254% increase from age 45 to age 75. Its no wonder why so many feds make the switch to low cost level term life insurance policies.

Can I Keep My Fehb After Age 65

Your FEHB coverage will continue whether or not you enroll in Medicare. If you can get premium-free Part A coverage, we advise you to enroll in it. Most Federal employees and annuitants are entitled to Medicare Part A at age 65 without cost. … If you don’t enroll in Medicare, your FEHB plan will pay benefits in full.

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What If I Die Before My Spouse

As a federal retiree, you may enroll in a family plan, a self plan, or a self plus one plan, if offered by your insurance. Given that the FEHB is such a valuable benefit, if only one member in the household is a family employee, you should plan on utilizing his or her insurance in retirement. However, if the federal spouse dies first, its important to look at survivor benefits.

If you are enrolled in a self plus one or family plan at the time of your death in retirement, your survivors can continue coverage with the FEHB. Surprisingly, the government continues to pay the full government portion of the premiums and your survivors only need to come up with the employee portion . These amazing survivor benefits are the same for both employees and annuitants. However, you should know that if youre enrolled in a self plus one plan, your partner cannot change his or her coverage to a family plan after your death. You can find full details in the FEHB handbook.

% Reduction In Basic Life Insurance

Retirement Minute: Life insurance

Under the 75% reduction option, at the age of 65 and one month, your Basic Insurance will begin to reduce by 2% of the original Basic Insurance Amount each month. If you retire after age 65, the 2% monthly reduction begins at retirement. All reductions of your basic insurance cease when it reaches 25% of your pre-retirement Basic Insurance Amount. Additionally, there is no charge once coverage begins to decrease. The 75% reduction option is the default option.

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No Reduction In Basic Life Insurance

Under this option, there is no reduction in your Basic Insurance Amount at age 65. The regular premium for basic insurance stops, but you continue to pay for the benefit of having no reduction in coverage. For more information on the cost for the no reduction basic insurance option see the FEGLI Handbook.

Federal Employees Pay Social Security Taxes

All federal employees hired in 1984 or later pay Social Security taxes. This includes the president, the vice president, and members of Congress. It also includes federal judges and most political appointees.

They all pay the same amount of Social Security taxes as people working in the private sector.

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Federal Employee Group Life Insurance

Established in 1954, the Federal Employees’ Group Life Insurance Program is the largest group life insurance program in the world, covering over 4 million Federal employees and retirees, as well as many of their family members.

At any point in your career, you may ask yourself why you should take advantage of federal life insurance options. In short, life insurance can help your loved ones recover financially if you die unexpectedly. For example, FEGLI can help cover burdensome funeral costs and help your loved ones stay afloat in the case of the catastrophic loss of your income. For a relatively low cost per pay period, you may be able to provide peace of mind to loved ones after you pass. Please view the information below to review your life insurance options.

Note: Life Insurance premium rates increase when you retire.

For more information on life insurance, visit the OPM website.

Additional Coverages Under Fegli

Federal Employee Life Insurance

Employees may elect additional life insurance under FEGLI. This is called Optional insurance. New employees can elect the following optional insurance coverages: Option A Standard Option B Additional, and Option C- Family coverage. These coverages are not automatic as a new employee must elect any or all of the optional coverages within 60 days of the employees appointment to an eligible position. A completed Life Insurance Election from must be completed and submitted to the employees Human Resources Office. After the initial 60 day enrollment period, opportunities to enroll in FEGLI BIA and optional coverages are limited and will be discussed in a separate column.

Option A Standard is a flat amount of $10,000. The cost for Option A varies by age. The current premium rates are summarized in the table below:

Option A Standard

4.33

13.00

*For insurance withholding purposes, these ages are reached on the first day of the pay period that starts after an employees birthday or the first day of the month that starts after an annuitants birthday.

Example. Angela is a 46 year old employee. She elects Option A. Angela is paid on a bi-weekly basis. Her cost for Option A is therefore $0.70 bi-weekly, as shown in the table above.

3.900

5.720

*For insurance withholding purposes, these ages are reached on the first day of the pay period that starts after an employees birthday or the first day of the month that starts after an annuitants birthday.

Option C Family Coverage

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Termination Of Insurance After Retirement

Your federal life insurance will terminate if your entitlement to annuity benefits ends. For example, if you are a disability retiree under age 60 and you are found recovered or restored to earning capacity, your disability annuity and life insurance coverage will end. You do not have the 31-day extension of coverage and may not convert the life insurance to an individual policy.

Enrolment And Effective Date

  • To apply for coverage, you must complete an application form .
  • If your completed application is received within 60 days of becoming eligible, coverage takes effect on the eligibility date.
  • If your completed application is received more than 60 days after becoming eligible, evidence of insurability acceptable by the insurer is required and coverage takes effect on the 1st day of the month following receipt of the application by your departmental Compensation services or the Public Service Pay Centre.
  • Evidence of insurability is always required for Supplementary Life Insurance.
  • Provisions for members of the Executive Group
    • Lump-sum benefit equal to your annual salary rounded to the nearest $1,000
    • Payable to your designated beneficiary in the event of your death
    • Benefit reduction starting when you reach age 66
    • Lump-sum benefit for members of the Executive Group equal to 2 times annual salary
    • Additional lump-sum benefit equal to your annual salary rounded to the nearest $1,000
    • Payable to your designated beneficiary in the event of your death
    • Units of $25,000 up to 10 units for maximum coverage of $250,000
    • Payable to your designated beneficiary
    • Covers death by accidental means and dismemberment, which includes loss of the use of certain body parts

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    Health Benefits & Life Insurance

    Medical health plans under the Federal Employees Health Benefits program are diverse and costs are comparatively low considering that the federal government pays two thirds of the premiums for employees and retirees. The medical plan is an employee-employer contribution system and includes HMO and Blue Cross and Blue Shield programs. There are literally hundreds of plans to choose from.

    The Federal Employees Group Life Insurance program is available to all employees. The FEGLI program offers low cost term life insurance for the employee and basic coverage for the family. FEGLI offers up to five times the employees salary in death benefits.

    Other insurance benefits include:

    • Federal Employees Long Term Care
    • Federal Employees Dental Vision Care
    • Federal Flexible Spending Account Program

    One of the primary benefits of Postal Service employment is the satisfaction you experience from working in a challenging and rewarding position. Positions are available with the level of responsibility and authority that you desire.

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    What Are The Us Federal Governments Retirement Benefits

    Your Federal Retirement Annuity for CSRS and FERS

    Federal employees receive generous retirement benefits. Many people know that federal employees receive a pension. However, few people understand the full complement of federal retirement benefits. Employees in the federal employee retirement system, also called FERS, receive three benefits. A retirement annuity . A supplemental pension from ages 57-62. A continuation of their FEHB plan into retirement.

    Previously, I have written extensively about all of the benefits of federal employment. Today Ill try to explain federal employee health insurance benefits after retirement.

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    Conversion Coverage Is Available

    Within 30 days of retirement, you may convert the remaining 75% of your active life insurance to a private direct pay policy. You may also convert the amount by which the dependent policy was reduced. For rates and the conversion application, go to the Michigan Civil Service Commission website or call Minnesota Life at 866-293-6047.

    Retirement Forms And Applications

    You will be required to complete a retirement application and other forms and documents. Your servicing personnel office will review your application and will verify your service history, prepare an annuity estimate, and gather all of the required forms from your OPF. These forms and the retirement papers will be forwarded to USDA. Prior to submitting the package to USDA, your specialist will call you to discuss your final annuity estimate or any other issues you may have.

    USDA will submit your retirement forms and your final retirement record to the Office of Personnel Management . USDA will notify you once your papers have been forwarded to OPM. Upon receipt of your retirement documents, OPM will send you a civil service annuity number . Please allow 7 to 10 business days, after receipt of your CSA number, for your first interim annuity payment.

    Your specialist will provide you with the Notice of Agency Processing of Application for Retirement which will explain What to expect and provide key information to assist you with tracking the progress of your retirement. He/She will also send you a copy of your annuity estimate, and copies of some of the required forms that are sent to OPM with your application. If you have not received this package within 10 business days after your retirement effective date, please send an email to or call RABAS at 202-325-6180.

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    What Is The Cost Of Fegli Basic Insurance Amount And Options A B And C

    The Basic Insurance Amount provides term life insurance at group rates. The BIA is equal to the greater of: an employees salary rounded up to the next $1,000, plus $2,000 or $10,000. The federal government pays one-third of the premium cost of the BIA and an employee pays the other 2/3 of the premium cost. Those employees who are eligible for the BIA full or part time permanent employees are automatically covered unless the employee formally declines the coverage using Form SF 2817.

    As a group plan sponsored by the US government, FEGLI BIA uses a composite premium structure. This means that the BIA premium rate is the same for each enrollee in the group, regardless of age or health status. The following table summarizes the cost of FEGLI BIA:

    Payroll Method

    Monthly

    $0.325

    The following example illustrates: Josephs SF 50 salary is $97,300. His BIA is $100,000 .

    His bi-weekly cost is $15 times $0.15, or $15.00.

    Younger employees are entitled to additional BIA life insurance provision called the Extra Benefit which doubles the amount of the BIA at no extra cost for enrollees age 35 or younger. Beginning at an enrollees 36th birthday, the Extra Benefit decreases 10 percent each year until age 45, at which time there is no Extra Benefit. In the example above, if Joseph were age 35 or younger, he would have an extra $100,000 of coverage for a total of $200,000. If Joseph were age 40, he would have a total of $150,000 of coverage .

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