Jones Wealth Management Group
901-312-9166 or 800-754-1218
FEDERAL EMPLOYEES' GROUP LIFE INSURANCE
FEGLI Sticker Shock
Many federal employees are shocked to learn that their life insurance benefits can increase by more than 10 times from their early 40s to their early 60s for the Option B insurance under FEGLI (Federal Employees’ Life Insurance Program). That’s more than an 1000% increase! (Source: https://www.opm.gov/healthcare-insurance/life-insurance/program-information/#url=basic_em)
To avoid such sticker shock, as a federal employee you should obtain adequate insurance coverage outside of the federal government’s plan while you can. The cost of all life insurance policies, whether they are provided by one’s employer (group policy) or obtain outside one’s employer (individual policy), increases as you get older. As we age, certain health conditions may develop increasing the cost of insurance or causing one to be uninsurable, preventing one from obtaining insurance altogether.
That’s why it’s important to obtain outside coverage sooner than later. Call today (901-312-9166) or click here to request a quote for term, universal life, or whole life insurance coverage from highly rated companies. As independent agent, Jones Wealth Management is able to obtain quotes from several companies to find a policy that meets your needs.
All federal employees except U.S. Postal Service employees are provided Basic Insurance which is your annual salary rounded to the next even $1,000, plus $2,000 at a monthly cost of $0.325 per $1,000 of coverage. Coverage for postal employee is provided at no cost. For example, someone that earns $56,345 would have $59,000 in basic insurance coverage, by rounding $56,345 up to $57,000 and adding $2,000. The cost monthly cost would be $19.18 per month (59 x $0.325).
Option A is additional coverage of $10,000 and the cost for it is $0.43 per month for employees under the age of 35, but is $13.00 for employees age 60 and over. The table below reflects the cost for Option A life insurance under FEGLI:
Option B provides for 1, 2, 3, 4, or 5 times your salary rounded up to the next even $1,000. The cost for it is $0.043 per month per $1,000 of coverage for employees under the age of 35, but $0.953 per month per $1,000 of coverage for employees between the ages of 60-64. At a salary of 56,345, a federal employee who is 41 years old could have up to $285,000 of coverage (5 x $57,000) and it would cost only $24.80 per month, but at age 45 would increase to $43.32 per month until (s)he turns 50, when it increases to $67.83 per month. The table below reflects the cost for Option B life insurance under FEGLI:
Both Option A and Option B life insurance options are designed for price increase every 5 years. With Option A the increases cease at age 60, but Option B increases every 5 years until age 80.
Call today (901-312-9166) or click here to schedule a no-cost consultation with Memphis’ only Chartered Federal Employee Benefits ConsultantSM that includes a complimentary benefit and retirement analysis to determine your current situation and how prepared you are for what’s ahead.
A Chartered Federal Employee Benefits ConsultantSM (ChFEBCSM) is a financial advisor that is familiar with the federal government retirement system and benefits offered in the CSRS (Civil Service Retirement System), FERS (Federal Employees Retirement System), Thrift Savings Plan (TSP), FEGLI (Federal Employees’ Group Life Insurance), Federal Employees Health Benefits, and other benefits offered to employees of the federal government.
Martavius D. Jones of Jones Wealth Management Group is the only financial planning professional that holds the designation of a Chartered Federal Employee Benefits Consultant in the Memphis metropolitan area.