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…Budget! This month’s article is a brief overview of FEGLI, the Federal Employee Group Life Insurance programs:
FEGLI is a suite of optional life insurance coverage available to Federal Employees. There are several coverages available including:
If you have the Basic Coverage, there are three types of Optional insurance, whose premium differs from the “level pricing” of Basic Coverage. These optional coverages have premium increases based upon age brackets:
Optional "B" - Additional Age Brackets
Pricing charts using bi-weekly or monthly rates per $1,000 of coverage may lead people to under-estimate the impact on cost. For example, FEGLI premiums for a Federal employee from age 50 to age 70 (under current FEGLI rates) for a $500K policy will cost a total of $81,250 over 20 years. The same 20 year term coverage from a retail insurer* would have an approximate monthly cost of $124.131 (assuming Standard Plus, Non-Tobacco Rate Class) totaling $29,760, saving $51,490 over the same timeframe. This is how you Save Your Budget!
Optional "C" Family - Additional Age Bracket
FEGLI is a suite of group life insurance options, with the exception of "Basic", which become increasing expensive with each 5 year age bracket. As with any insurance coverage, its purpose is to address risks to your families financial well being. These risks evolve as you age and should be evaluated as part of your periodic financial planning reviews.
*Calculated using the average cost of 5 leading insurance companies as rated A+ by AM Best.