FEGLI and the Federal Employee
By Ashby Daniels
Wednesday, July 14, 2010
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Ashby Daniels is a financial advisor with First Command Financial Services, Inc. Ashby works with federal employees to integrate their government benefits into a comprehensive financial plan and ensures that it reflects their values and goals. His financial planning practice is located in Camp Springs, MD.
Have you taken the time to make sure your family can continue to live in financial security if something happens to you? If you haven’t, you can start by evaluating your needs. Then, take action to put the proper coverage in place.
First, how do you verify how much Federal Employees’ Group Life Insurance (FEGLI) you currently have in place? That can be as easy as checking your most recent Standard Form 50, Notification of Personnel Action. I find that many federal employees assume they selected all five options and then discover that they only have Basic coverage. (Unless you waived coverage as a new employee, you are automatically enrolled in Basic coverage.)
To get a starting point of your total life insurance needs, take your current and future income, mortgage payoff, college tuition for children, etc. and subtract existing resources such as survivor’s earnings, savings and investments, and all life insurance you currently own. This total is a rough estimate of the amount you still need to put in place to take care of your family. So, what do you do about this need?
Now that you have verified your FEGLI coverage, as an active federal employee, you have three opportunities to add coverage:
- During an open season;
- After submitting your medical information; or
- By experiencing a life event.
FEGLI open seasons are rare as they usually only happen when there are changes in the program itself.
If you are submitting your medical information, you must have waited at least a year since you last waived the opportunity to increase coverage. As long as that is the case, obtaining the proper medical information is a matter of taking Standard Form 2822 to your physician for your examination.
This examination will be at your own expense. Then send the form to the Office of Federal Employees’ Group Life Insurance, and if they approve your request, you will have 31 days to request Option B coverage or increase your Option B multiples (up to a total of 5). The last opportunity to increase coverage is what the government considers a life event. Those include marriage, divorce, death of your spouse, or the birth or adoption of a child.
Once you have exhausted your ability to obtain additional FEGLI, you should consult a trusted financial advisor to see what the best course of action is to make sure your family is protected.