Posted on Saturday, 28th June 2014 by Dennis DampPrint This Post
FEGLI Retirement Options Part (1) discussed how to assess your insurance needs and a general discussion of FEGLI options, benefits, and considerations. FEGLI Insurance Options (Part 2) outlined parts A, B and C options to help readers decide on what coverage to carry into retirement and alternatives to Part B multiples. This article, Part (3), covers Life events that allow employees to make FEGLI coverage changes. It’s important to be aware of these life event options otherwise you may lose out on important family coverage. Employees also have the ability during a life event change to increase their coverage.
Retirees are only able to change FEGLI beneficiaries, they can’t add family members or elect expanded coverage. However, retirees can make significant changes to their benefits for life events. They can add a new spouse and children to their FEHB program and annuitants can elect to provide a survivor annuity for a new spouse if they do it within the required time period. For more information on retiree life event changes read my article titled Qualifying Life Events, Don’t Lose Your Benefits.
An employee may elect Basic, Option A, B and/or C insurance within 60 days following a FEGLI qualifying life event. These events are: marriage, divorce, spouse’s death, or the adoption of an eligible child. For option B and C, employees may elect up to 5 multiples based on the life event. You have 31 days before the event to 60 days after the event to make changes. After that you must wait for an open season and they are few and far between for the FEGLI program.
Federal employees that marry can add family coverage for FEGLI and FEHB coverage within the time period mentioned above. If you don’t elect FEGLI life insurance coverage for your new spouse and children you will only be able to add coverage if an open season is announced. They seldom offer FEGLI open seasons. However, if you neglect to add a spouse and your children to your FEHB health insurance program when you first marry, within the 31 days before to 60 day period after the event, you can always add them to your health plans during the next annual open season.
All federal employees experiencing a life event, no matter where they are at in their career, need to evaluate their insurance needs and fully understand benefits options. This is an ideal time to review and increase your coverage if needed and to obtain life insurance for a spouse and qualifying children. No physicals are required for life event changes.
If an employee is 37 and their spouse is 35 the cost of each Option C family coverage FEGLI multiple is only 29 cents biweekly. For that 29 cents your spouse receives $5,000 life insurance coverage and each child $2,500. You can elect up to 5 multiples which provides $25,000 spousal coverage and $12,500 for each child. The total cost to you for the five multiples at age 37 is only $1.45 biweekly! The cost of Option C increases with age so review the employee FEGLI rates to determine if the cost is worthwhile for you and your circumstances. The same 5 multiple coverage for a 60 to 64 year old would be $13.50 biweekly, $2.70 per multiple. When you retire at age 65 you can elect either full reduction or no reduction for Option C coverage.
Retiree Employment Update
We added more jobs over the past two weeks to our Jobs Board from companies looking to hire skilled federal retirees. These new positions include several data analyst positions and an HR manager for a government contracting firm in Reston Virginia. Many opportunities exist for those looking to supplement their retirement income or to start a second career. We provide this free job listing service to companies that are seeking to hire experienced retired federal workers.
It looks like our COLA for 2015 will be 2% or more depending on the final CPI numbers due out in October. The CPI-W increased .3 % in May and if that continues we could receive a decent increase next year. They keep telling us that costs aren’t increasing yet we all know that isn’t the case. Gas is approaching $4 a gallon in Pittsburgh! The cost of food, clothing, cars, electricity and everything we use have gone up considerably this past year. If they measured inflation like they did correctly during the Carter years it would be three times what they are officially reporting it today.
- Request a Retirement Benefits Summary & Analysis from a local adviser. Includes projected annuity payments, income verses expenses, FEGLI, and TSP projections.
- Retirement Planning Guide
- 2014 Leave Record & Scheduling Spreadsheet
- How to be Emotionally and Physically Prepared When You Retire
- How to be Financially Prepared When You Retire
- Master Retiree Contact List (Important contact numbers and information)
- Survivor’s Guide
- Estate Planning Guide (An 11 part series that will help readers prepare for retirement, understand basic estate planning techniques, and compile their personal “Survivor’s Guide” binder.)
Visit our other informative sites
- Federal Government Jobs & Career Center
- FREE Federal Employee’s Retirement Planning Guide
- Federal Employee’s Career Development & IDP Center
The information provided may not cover all aspect of unique or special circumstances, federal regulations, and financial information is subject to change. To ensure the accuracy of this information, contact your benefits coordinator and ask them to review your official personnel file and circumstances concerning this issue. Retirees can contact the OPM retirement center. Our article is not intended nor should it be considered investment advice and our articles and replies are time sensitive. Over time, various dynamic economic factors relied upon as a basis for this article may change. The advice and strategies contained herein may not be suitable for your situation and this service is not affiliated with OPM or any federal entity. You should consult with a financial or human resource professional where appropriate. Neither the publisher or author shall be liable for any loss or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
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