July 25, 2008, Newsletter Issue #114: Tips on Federal Employees Group Life Insurance
Tip of the Week
Employees of the Federal Government may elect to participate in the Federal Employees Group Life Insurance plan (FEGLI). As you may have guessed the plan, established in 1954, is the largest group life insurance plan in the world. The following tips offer a brief overview of the plan.
Tip 1. FEGLI Participants Contribute to Insurance Costs
Generally, the government pays for 1/3 of the coverage cost for the basic plan. Employees are responsible for the difference. Premium payments are made through a payroll deduction plan. There are three coverage options available in addition to basic coverage.New employees are automatically enrolled in the basic program. Employees can waive coverage if they choose not to participate. Optional coverage must be elected.Basic coverage is usually equal to the amount of the employee’s annual salary plus a predetermined additional amount.Term policies do not build cash value.Portability refers to an insured’s ability to maintain coverage after employment has ended. The benefits of Federal Employees Group Life Insurance do not continue beyond employment although some policies may be eligible for conversion.
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