Information on filing a claim to the Federal Employee Group Life Insurance (FEGLI) program – and what to know about denied or delayed claims.
If you’ve lost someone close to you who was covered by a FEGLI, dealing with a delay or denied claim can become a hassle at a point in your life where a hassle is the last thing you need. In this article, we take a look at filing claims for FEGLI death benefits, why a claim might be rejected or held up, and at what point you might want to consider hiring legal help.
A claim for FEGLI death benefits can be denied due to several reasons. Sometimes, it is because the beneficiary of these benefits is unclear - either one supposed beneficiary disputes another or there are multiple claims filed from competing beneficiaries. Sometimes, the designated beneficiary is invalid (or has already passed away themselves) or there is just no beneficiary on record.
Learn all about FEGLI from Ed Zurndorfer at our no-cost webinar for federal employees and their family members:
In many ways, FEGLI is different than both private life insurance policies and similar group programs for state or local government employees. For one, it derives from federal law so it takes precedent over any state legislation. Second, the death benefits can only go to the designated beneficiary – even if it is an ex-spouse that was added as beneficiary 30 years before the federal employee’s death. (This is why it is very important to keep your beneficiaries up-to-date.) Another unique feature of FEGLI death benefits, but not accidental death insurance, is that claims are paid when a covered individual takes their own life.
Because FEGLI is unaffected by state laws, the order of precedence regarding who receives FEGLI death benefits is as follows:
- The designated beneficiary (no exceptions)
- If no designated beneficiary, then a surviving spouse
- If none of the above, then any surviving children
- If none of the above, then any surviving parents
- If none of the above, then the benefits go to the executor or administer of the deceased’s estate.
- If there is none of the above and no executor or administer, then death benefits go to the next of kin.
- After four years, if no beneficiary has filed a claim, the money is escheated to FEGLI.
FEGLI claims can be denied for other reasons, not related to beneficiaries. These include an issue with eligibility, there was no coverage at the time of death, there are insufficient documents to support the claim, or non-payment of premiums. Federal employees are automatically enrolled in FEGLI basic, but they can opt out, in which case FEGLI coverage ends at the end of the pay period in which the opt-out notice was received. When leaving federal service, FEGLI coverage ends on the date they separated from service or 12 months after “discontinuance of pay,” and sometimes a 31-day grace period is allowed where they were still covered. Determining if the deceased was covered by FEGLI at the time of death is one reason where you might need to get a lawyer involved.
Delayed FEGLI Claims
If a submitted claim is not paid after 30 days since the submission, it is considered delayed. To start the process, the beneficiary sends the death certificate to OPM, which will respond by sending the beneficiary a “FE-6” claim form. The beneficiary will then send that to FEGLI, where an examiner might request additional documents, such as certification from the employing agency’s office. Here are some of the things that could delay a claim for FEGLI death benefits:
- Insufficient supporting documents
- No death certificate
- Beneficiary dispute, contest, or a competing claim
- Only 1 witness signed the beneficiary designation form
- The beneficiary designation form was received after the date of death
- There is no beneficiary on file
- There is a technical issue with the percentages listed for multiple surviving beneficiaries
- There are 2 executors of the estate filing competing claims
For more complicated cases and delayed claims in general, legal counsel might be needed to facilitate the process. These law offices will typically suggest an attorney throughout the process, but for complex situations, a competent lawyer familiar with the FEGLI Act might be able to help expedite a delayed claim, help appeal a denied claim, or assist in resolving complicated beneficiary disputes.
A federal employee who is covered by FEGLI and still living can help simplify the claim process for their beneficiaries by making sure their information is current, premiums are paid, and that all of their life insurance “ducks” are in a row.
Until Next Time,
**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.