What Federal Employees Should Know about the Federal Employees' Group Life Insurance Program

If the U.S. governmentemploys you or your spouse, you should have access to a potentially valuablebenefit—the Federal Employees' Group Life Insurance (FEGLI) program. There areseveral tiers of FEGLI coverage based on income, family size and needs. Whatinformation is important to understanding FEGLI and managing your potentialbenefits? Here are a few things federal employees and their immediate familymembers should know about the FEGLI program.

What is FEGLI?

Most federal employees havebasic life insurance under FEGLI. This life insurance is equal to theemployee's actual rate of annual basic pay, plus either $2,000 or $10,000,whichever is more.¹ For employees under the age of 45, doublelife insurance benefits are available up until the employee's 36th birthday,with a 10% reduction in double benefits each year until the employee turns 45.

FEGLI also has optionalinsurance coverage. This optional coverage is either $10,000 or between one andfive multiples of the employee's pay. Another option for optional coverageincludes family coverage. This coverage insures an employee's family memberswith between one to five multiples of the employee's salary.

Finally, FEGLI offers accidental death and dismemberment benefits to federal employees. The accidental death benefits equal the amount of basic death benefit insurance. They may also provide an additional $10,000 of coverage for those who opted in for the higher tiers of FEGLI optional insurance coverage. Dismemberment benefits may be paid if the federal employee loses a limb or loses eyesight in one or both eyes. 

Where Do FEGLI Benefits Go?

Life insurance benefitspayable under FEGLI are on top of any Social Security, Civil Service RetirementSystem, Federal Employee Retirement System survivor benefits or workers' compensation payments. They are paid in a specific order, depending on the survivingrelatives of the employee. Benefits pay according to this order:

• The designated beneficiary (or beneficiaries); then
• The surviving spouse
• Any child or children of the decedent (or descendants of the decedent's     deceased children)
• Any surviving parents of the decedent
• The estate administrator or executor
• The next of kin in accordance with the state's intestate statutes.

Each state has its own rulesproviding who inherits from whom, which might differ from the list above. Ifyou have a question about FEGLI coverage, your financial professional mayprovide guidance and let you know which benefits are appropriate to consider.

Sources

¹ https://www.opm.gov/policy-data-oversight/snow-dismissal-procedures/hurricane-guidance/benefits/federal-employees-group-life-insurance/

Important Disclosures

This material was created foreducational and informational purposes only and is not intended as insuranceadvice. If you are seeking insurance advice specific to your needs, such adviceservices must be obtained on your own separate from this educational material.

All information is believedto be from reliable sources; however LPL Financial makes no representation asto its completeness or accuracy.

This article was prepared by WriterAccess.

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