FEGLI Open Season 2016

September 1 through September 30, 2016 will be the first FEGLI (Federal Employees’ Group Life Insurance) Open Season since 2004. This represents the opportunity for federal government employees to make changes to their life insurance. Eligible federal employees are automatically enrolled in the Basic Insurance offering under FEGLI, but during Open Season they can add Option A (Standard), Option B (Additional), and/or Option C (Family). During FEGLI Open Season there are no health questions to answer and medical exams are not required.

During FEGLI Open Season, you should have your total insurance situation reviewed by a Chartered Federal Employee Benefits Consultant. The nature of rate increases brings about significant increases for federal employees on certain birthdays. When a federal employee turns 45, their FEGLI Option B insurance rate increases 75%. When a federal employee turns 55, their FEGLI Option B insurance rate increases by 81.8%, and at 60, rates increase by 120%. Part of your planning should include a review and exploring options that lock in insurance rates that don’t increase every five (5) years.

FEGLI Basic Insurance and Options A, B, and C are group term life insurance that does not have any cash or paid-up value. A non-group or individual equivalent to FEGLI would be 5-year term insurance. Rates for 5-year term remain the same for a period of five (5) years, but increase at five-year intervals. The rate structure of FEGLI Option B is listed below:

Source: https://www.opm.gov/healthcare-insurance/life-insurance/program-information/#url=Premiums-for-Employees

FEGLI Basic Insurance provides for life insurance in an amount equal to your salary as a federal government employee, rounded to the next $1,000, plus $2,000. Generally, the federal government pay one-third (1/3) of the cost of your Basic Insurance coverage and you pay the remaining two-thirds (2/3). For employees of the United States Postal Services, the federal government pays the total cost of Basic Life Insurance coverage.

FEGLI Option A provides a flat amount of $10,000 of life insurance coverage.

FEGLI Option B provides an additional amount of life insurance coverage up to five (5) times your annual salary after rounding up to the next $1,000.

FEGLI Option C provides for family coverage for your spouse and eligible dependent children, up to a maximum of $25,000 for a spouse and $12,500 for eligible dependent children.

During FEGLI Open Season, you can add or drop life insurance coverage for you or an eligible family member or increase or decrease the amount of life insurance for you or an eligible family member under the life insurance program for federal government employee by complete Standard Form SF 2817.

Changes made during FEGLI Open Season take effect after a one-year delay, so changes made during the 2016 FEGLI Open Season will not be reflected until October 1, 2017. Any new premiums will not be payable until October 1, 2017.

A Chartered Federal Employee Benefits Consultant is a financial planning professional who has been specially trained on the complexities associated with the retirement and other benefits offered to the employees of the federal government.

To learn more about your life insurance options as a federal government employee and to schedule a no-cost, phone or in-person consultation and review, please contact Jones Wealth Management Group at 901-312-9166.

Source: https://www.opm.gov/healthcare-insurance/life-insurance/open-season