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Don't Leave Your Loved Ones Out in the Cold

FEGLI in Retirement

FEGLI Open Season

Some federal retirees are shocked to learn that the amount of insurance coverage they had while employed under FEGLI (Federal Employees’ Group Life Insurance) may be sharply cut by 75% in just over three (3) years after leaving federal employment. 

On the form SF 2818, Continuation of Life Insurance Coverage, federal employees who elect to have Basic Life Insurance must also make a one-time, irreversible election of what level of Basic Life Insurance that they want to carry into retirement.  The options are 75% Reduction, 50% Reduction, or No Reduction.  By default, if no election is made, the federal employee is automatically enrolled in the option that provides for the 75% reduction.

The 75% Reduction option reduces by 2% of the Basic Insurance amount each month until 25% remains.  A 2% reduction each month to 25% takes approximately 37.5 months (75% / 2) or about three (3) years and 1 ½ months.

The 50% Reduction option reduces by 1% of the Basic Insurance amount each month until 50% remains.  A 1% reduction each month to 50% takes 50 months, or 4 years and two (2) months.

Cost for Each $1,000 of Basic Insurance for Federal Retirees/Annuitants

Overall FEGLI is an attractive benefit offerings provided to federal government employees, especially those age 35 and younger.  In general, the cost of life insurance goes up with each birthday and each passing year the chances of developing health conditions that raise insurance rates increase too.  For FEGLI, rates increase dramatically after age 35 and increase every 5 years afterwards.  The table below show the increases for Option A and Option B insurance from ages 35-39 to age 60.

That’s why it’s important to obtain coverage outside of FEGLI sooner than later and avoid the hefty increases ahead.  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.

Knowing such details of the various federal government benefit and retirement programs such as the FEGLI reduction distinguishes a Chartered Federal Employee Benefits ConsultantSM (ChFEBCSM) from other financial professionals.  A financial professional that holds the ChFEBCSM designation has been specially trained on the complexities of the federal government retirement and benefits program and must complete annual continuing education to maintain the designation. 

Martavius D. Jones of Jones Wealth Management Group is the only financial planning professional that holds the designation of a Chartered Federal Employee Benefits ConsultantSM in the Memphis metropolitan area.

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.

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