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Top 10 Reasons to Replace FEGLI
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Tags: fegli, life insurance, federal employee, fegli replacement, fegli options, federal employee group life insurance, feglilifeinsurance
The following lists the top 10 reasons you and your family should consider replacing your federal employee group life insurance.
| 1. | Premiums increase 2,000% as you get older... Most Federal employees do not understand that their Federal Employees Group Life Insurance, FEGLI, premiums increase over 2,000% or as much as 20 times as they go through there employment years. And if that was not bad enough, if you were to get a step increase or a higher local, locality-based, pay that will also increase your FEGLI premiums, all without you knowing. Most employees ask WHY? Simple, group life insurance. Just like group health, dental, long term care and many other insurance plans, the "group" is priced as if there was one standard to go by. Example; your FEGLI coverage is a true group policy, they take all employees enrolled or enrolling in the plan, act like they all have the same health condition, the same height and weight, the same of everything, hence the name "group". Everyone pays the same rate regardless of their health, height and weight. Test case: you had a male that was just employed by the federal government, h | | 2. | Coverage can decrease 76% at retirement... Life insurance coverage from your FEGLI life insurance will decrease 76% at retirement if you are not careful. When you retire, lets say at 65, if you do nothing your basic, 1 times your salary will decrease down to 25% of where it started, option A will decrease the same and option B and C will decrease to zero "0", nothing, NO MORE COVERAGE. | | 3. | Builds no cash value...Your life insurance with the federal government is term life insurance, term life insurance in most cases does not build any "cash value". Even worse, the FEGLI group policy that you have is not only term life insurance it is also increasing term life insurance, your premiums will increase. Example of one of my clients, 45 year old postal employee, making $45,000 a year with option A and 5 times options B, she would have paid $66.266 in premiums till age 65, her FEGLI coverage will decrease down from $489.000 to $23,500 with "NO CASH VALUE", NONE. Just think, she would have paid $66,266 over her employment years with no cash value on her coverage will decrease, we solved her problems and saved her thousands of dollars. | | 4. | Is not permanent life Insurance...Your FEGLI coverage is not permanent life insurance, permanent life insurance premiums do not increase over time. Depending on the insurance company, most permanent life insurance polices cover the insure coverage to age 100 or 121. Hence the term "permanent", lasts forever or in my belief, if you buy life insurance, you need all or some permanent coverage. There is nothing worst than someone thinking they have permanent life insurance only to find out they have term life insurance that their premiums will increase even if they bought a life insurance policy from a outside insurance company. | | 5. | Your Spouse Life Insurance can decrease to zero...This is true, most employees do not understand that when they retirement and they do not take any action on keeping their spouse life insurance, the coverage will decrease to zero. | | 6. | The Federal Government does not Insure you...Most employees believe the federal government insures them, this is not true. The federal government is not a insurance company, they do not cover you with life insurance or any other insurance, per the FEGLI certificate, a number of insurance compaines cover you, the main company is Met Life and you can be dropped at any time with out any notice. | | 7. | Can not increase coverage when you want...When you are hired or change to another agency, or other changes that OPM deems appropriate, sometimes you can increase your coverage. And only then you can only increase your coverage to 5 times your salary, if you need more coverage, you are out of luck. | | 8. | Can not take coverage with you to new job...If you leave the employment of the federal government you can not take any of the life insurance coverage with you. The problem with this if your health changes during your employment and you do leave on your own terms or not, you may not be able to get life insurance coverage outside the federal government. The only way you can keep your FEGLI coverage is when you retire and as you know, your premiums are going to go through the roof. | | 9. | Step and Local pay also will increase your costs...Not only does FEGLI coverage increase premiums over 2,000% doing your employment years,but if you get a step increase or you move to a new state or location your FEGLI will also increase. Example: I was working with a employee, she moved to another state to increase her salary to help with her survivor's annuity monthly payout, look at your leave and earning statement under FEDRS, CSRS retirement, not only did her salary increase BUT her FEGLI premiums also increased. If you get that step increase that you have been working for all these years, you not only get a higher salary, you also get higher FEGLI costs. | | 10. | Coverage can be dropped at any time...Per OPM.gov, your FEGLI life insurance can be dropped at any time. The contract that the federal government has with the insurances companies can not be renewed at nay time leaving you with out coverage for you and your family. If you have replaced your FEGLI coverage with one of the companies we work with you can keep your policy regardless of what the government does and if you replace your FEGLI with the right policy, your premiums will never increase, never. |
Lister:
valkrum
Source:
FEGLI Life Insurance
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I found this site after looking for alternatives to replacing my FEGLI. I found out I can save thousands of dollars over the course of my employment, and the best part is, I still contribute through Federal Payroll Deductions. There are other options that I was not even aware of, a better TSP, and of course coverage that my government plan did not offer. Good agent here, he knows his stuff.
Comment by: valkrum
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