Your Life Insurance Coverage with Option A: FEGLI For Federal Employees
While there a lot of things about the Federal Employee Group Life Insurance (FEGLI) program that can quickly become confusing, the additional coverage known as “Option A” is relatively easy to grasp. This appears to be true when compared to the other possible additions- known as “B” & “C,” respectively. The optional insurance adds $10,000 to a federal worker’s Basic plan and shares similarities with it. Both Basic and the Option A insurance include accidental death & dismemberment (AD&D) plans while the employee is currently working in civil service for the government. The AD&D plan mirrors the dollar amount of the life insurance, which is $10,000 in the case of Option A, and goes away immediately upon retirement.
The cost for this additional insurance depends on the employee’s age: it can be as cheap as 43 cents per month for someone in their early 30’s, or at its most expensive, $13.00 per month for someone in their 60s. If you maintained the “A” plan in the last five years before retiring, you can keep it for no cost going forward. Once it is free, the coverage does gradually get reduced until reaching $2,500, which is also similar to the 75% reduction of FEGLI-Basic. The decrease in coverage for FEGLI-A is automatic, however, and can’t be avoided if the additional insurance is kept after retiring.
Check out our Webinar on FEGLI here
Until Next Time,
**Written by Benjamin Derge, Financial Planner. 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.
FEGLI Option A