Because they are automatically enrolled in the basic plan as soon as they start work, many federal employees believe that Federal Employee Group Life Insurance (FEGLI) is the best plan. Many choose one of the three additional coverage options (Options A, B, or C). But how can federal employees ensure they get the most cost-effective plan with the best coverage? Have they considered all of the advantages and disadvantages of the plans? Are they aware that there are other options?
- Also Read: 3 Reasons Certain Federal Employees Can Retire Years Earlier Than Their Peers Without Penalties
- Also Read: CSRS Retirement in 2024: Are You Making the Most of What This Classic Plan Has to Offer?
- Also Read: Roth IRA Basics for Beginners: What’s There to Learn?
FEGLI Advantages
• Convenience  You are automatically enrolled in basic coverage regardless of age or health. You won’t have to take any medical tests, and as long as you work for the government and pay the premiums, you’ll be covered. You don’t have to worry about making payments because the premiums are withdrawn automatically from your paycheck.
• Ability to adjust coverage amount  The base plan covers your salary + $2,000, rounded up to the closest thousand, but you can choose to increase your coverage. Option A increases your coverage by $10,000, while Option B allows you to pick even more.
• Family coverage  In addition to yourself, Option C allows you to cover your spouse and children. Other plans require you to have individual insurance for each individual.
FEGLI’s Disadvantages
• Cost  Option A, B, and C are optional coverage that adds to the cost of the base plan, and premiums rise as you get older. Because the premiums for coverage for your husband and children are calculated based on your age rather than the age of your family members, these costs will rise as you get older. You’ll have to pay an additional premium if you want to add Accidental Death and Dismemberment Insurance.
• Coverage may be limited  You will only be eligible for coverage if you work for the federal government or retire from that employment. You lose your FELGI coverage if you choose to quit or are fired.
• Limited alternatives  FEGLI provides a few options, but none of them are Whole Life Insurance, Single Premium Whole Life, or Universal Life Insurance. These insurance have features and benefits that FEGLI’s plans do not.
• Difficult to raise coverage  You can reduce your coverage anytime. Still, you can only increase it during open enrollment periods by having a physical exam or a “Qualifying Life Event.” It’s not a good idea to wait for these open enrollment periods to enhance your coverage because the last one was in September 2004.
Contact Information:
Email: [email protected]
Phone: 8007794183
Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”
Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.
A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.
Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.
