Key Takeaways
- The Federal Employees’ Group Life Insurance (FEGLI) Program provides life insurance coverage for federal employees and their families.
- Understanding the options and benefits of FEGLI can help employees make informed decisions about their life insurance needs.
What’s the Federal Employees’ Group Life Insurance (FEGLI) Program?
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Overview of the FEGLI Program
The FEGLI Program offers life insurance coverage to federal employees, retirees, and their families. It is administered by the Office of Personnel Management (OPM) and underwritten by the Metropolitan Life Insurance Company (MetLife). The program provides a range of coverage options to meet the diverse needs of federal employees.
1. Purpose of FEGLI: The primary purpose of FEGLI is to offer financial protection to the families of federal employees in the event of their death. The program helps cover expenses such as funeral costs, outstanding debts, and living expenses for surviving family members.
2. Coverage Options: FEGLI provides basic life insurance coverage as well as optional coverage that employees can choose to enhance their life insurance protection. The program also includes accidental death and dismemberment (AD&D) coverage as part of the basic insurance.
Basic Life Insurance Coverage
Basic life insurance is the default coverage provided to all eligible federal employees when they are hired, unless they opt out. This coverage includes several key features:
1. Amount of Coverage: The amount of basic life insurance coverage is equal to the employee’s annual basic pay, rounded up to the next $1,000, plus an additional $2,000. For example, if an employee’s annual salary is $49,500, the basic coverage would be $52,000.
2. Accidental Death and Dismemberment (AD&D) Coverage: Basic life insurance includes AD&D coverage at no additional cost. This coverage provides additional benefits if the employee dies or suffers a qualifying injury as a result of an accident. The AD&D benefit is equal to the amount of the basic life insurance coverage.
3. Cost of Basic Coverage: The cost of basic life insurance is shared between the federal government and the employee. The government pays one-third of the premium, while the employee pays the remaining two-thirds through payroll deductions. For most employees, the cost is a small percentage of their salary.
Optional Life Insurance Options
In addition to the basic life insurance coverage, FEGLI offers three optional forms of coverage that employees can choose to add to their insurance plan. These options provide greater financial protection and flexibility:
1. Option A – Standard Optional Insurance: Option A provides an additional $10,000 of life insurance coverage. This option is particularly useful for employees who need a modest increase in their coverage to cover short-term financial obligations or supplement their basic insurance.
2. Option B – Additional Optional Insurance: Option B allows employees to choose coverage equal to one, two, three, four, or five times their annual basic pay, rounded up to the next $1,000. This option is ideal for employees who have higher financial responsibilities, such as a mortgage, children’s education, or other long-term financial commitments.
3. Option C – Family Optional Insurance: Option C provides coverage for the employee’s spouse and eligible dependent children. Employees can choose coverage amounts of $5,000, $10,000, $15,000, $20,000, or $25,000 for their spouse, and $2,500, $5,000, $7,500, $10,000, or $12,500 for each eligible child. This option ensures that family members have financial protection in the event of the employee’s death.
Accidental Death and Dismemberment Coverage
Accidental Death and Dismemberment (AD&D) coverage is an important feature of the FEGLI Program, providing additional financial protection in the event of an accident that results in death or serious injury.
1. Coverage Details: AD&D coverage is included automatically with basic life insurance and does not require any additional premium. The AD&D benefit matches the amount of the basic life insurance coverage. If an employee dies as a result of an accident, their beneficiaries receive both the basic life insurance amount and the AD&D benefit, effectively doubling the payout.
2. Qualifying Injuries: AD&D coverage also provides benefits for certain types of injuries resulting from accidents, such as the loss of a limb, sight, speech, or hearing. The specific benefits depend on the severity and nature of the injury, with partial benefits paid for partial losses.
Eligibility and Enrollment
Eligibility for the FEGLI Program extends to most federal employees, including those in both full-time and part-time positions. Here’s what you need to know about eligibility and enrollment:
1. Automatic Enrollment: Most new federal employees are automatically enrolled in basic life insurance coverage unless they opt out. Employees must actively choose to enroll in optional coverage within 60 days of their employment start date.
2. Open Enrollment Periods: Employees can also elect or increase their optional coverage during open enrollment periods or within 60 days of experiencing a qualifying life event, such as marriage, divorce, birth of a child, or death of a spouse or dependent.
3. Evidence of Insurability: In some cases, employees may be required to provide evidence of insurability, such as a medical exam, to qualify for optional coverage outside of initial enrollment periods or qualifying life events.
Cost and Premiums
The cost of FEGLI coverage is an important consideration for federal employees. Premiums for basic and optional coverage vary based on several factors:
1. Basic Coverage Premiums: The premium for basic coverage is shared between the government and the employee, with the government covering one-third of the cost. Employee premiums are deducted from their paycheck.
2. Optional Coverage Premiums: Premiums for optional coverage (Options A, B, and C) are fully paid by the employee and are based on the employee’s age and the amount of coverage selected. Premiums increase as the employee ages.
3. Premium Tables: The OPM provides premium rate tables that outline the cost of optional coverage at different age brackets. Employees can use these tables to estimate their premiums and decide on the appropriate level of coverage for their needs.
Beneficiary Designation and Management
Designating and managing beneficiaries is a critical aspect of the FEGLI Program. Employees should ensure that their life insurance benefits are directed according to their wishes.
1. Designating Beneficiaries: Employees can designate one or more beneficiaries to receive their life insurance benefits. This is done by completing the Designation of Beneficiary form (SF 2823) and submitting it to their agency’s human resources office.
2. Updating Beneficiaries: It’s important to update beneficiary designations as personal circumstances change, such as marriage, divorce, the birth of a child, or the death of a previously designated beneficiary. Keeping beneficiary information up to date ensures that benefits are distributed according to the employee’s current wishes.
3. Default Beneficiary Order: If no beneficiary is designated, benefits are paid according to a standard order of precedence set by the OPM, which typically prioritizes the employee’s spouse, children, parents, and then the estate.
How to File a Claim
Filing a claim for FEGLI benefits is a straightforward process, but it’s important to understand the steps involved to ensure timely and accurate payment of benefits.
1. Reporting a Death: To initiate a claim, the employee’s death must be reported to the human resources office of the agency where the employee worked. This office will provide the necessary forms and instructions for filing a claim.
2. Completing Claim Forms: The primary form used to file a claim is the Claim for Death Benefits (Form FE-6). This form must be completed by the designated beneficiary and submitted along with a certified copy of the death certificate and any other required documentation.
3. Processing and Payment: Once the claim form and supporting documents are received, the OPM and MetLife will review the claim and process the payment. Payments are typically made within a few weeks of receiving all necessary documentation.
Conclusion
The Federal Employees’ Group Life Insurance (FEGLI) Program offers valuable life insurance coverage for federal employees, providing financial protection for their families in the event of their death. Understanding the various aspects of the FEGLI Program, including basic and optional coverage, AD&D benefits, eligibility, costs, beneficiary management, and the claims process, is crucial for making informed decisions about life insurance needs. By taking advantage of the FEGLI Program, federal employees can ensure that their loved ones are financially secure even after they are gone.
