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February 20, 2019

Can federal employees have both government and private life insurance?

life insurance for federal employees

Life Insurance for Federal Employees

Federal employees in the United States are, in almost all cases, covered by the Federal Employees' Group Life Insurance (FEGLI)1. New federal employees are automatically enrolled in FEGLI’s basic plan. From there, employees can choose to remain in the Basic or enhance coverage through three additional plans (see chart below).

FEGLI is group term life insurance. So, it does not build cash or paid-up value. While the government will pay a third of the cost for basic life insurance, the other options are solely the responsibility of the employee, and costs can change based on age. Worse, FEGLI can become expensive after you’ve reached the age of 50.3

What if you want something different? Can federal employees have both government and private life insurance?

Yes. You can buy private life insurance alongside your FEGLI coverage to better fit your lifestyle. Whole life insurance, which does build cash value, can complement FEGLI plans, but we recommend you make a list of your specific circumstances and build a private life insurance plan to fit those needs.

As always, please check with your Human Resources department for any specific policies that may affect your insurance coverage.

Overview of FEGLI Plans2

Cost each biweekly pay period: 15¢ per $1,000 of coverage (Free for postal employees)

Cost increases with age?: No

Newly eligible employees automatically enrolled?: Yes, unless you waive coverage

Amount of Coverage: $10,000

Who is Covered?: You

Cost each biweekly pay period: Starting at 20¢

Cost increases with age?: Yes

Newly eligible employees automatically enrolled?: No, you must elect this coverage

Amount of Coverage: 1, 2, 3, 4, or 5 multiples of your salary rounded up to the next $1,000

Who is Covered?: You

Cost each biweekly pay period: Starting at 2¢ per $1,000 of coverage

Cost increases with age?: Yes

Newly eligible employees automatically enrolled?: No, you must elect this coverage

Amount of Coverage: 1, 2, 3, 4, or 5 multiples. Each multiple equals $5,000 for the life of your spouse and $2,500 for the life of each eligible child

Who is Covered?: Your spouse and unmarried dependent children under age 22

Cost each biweekly pay period: Starting at 22¢ per multiple

Cost increases with age?: Yes

Newly eligible employees automatically enrolled?: No, you must elect this coverage

As with any insurance, an accidental insurance policy can get quite complex, so it’s important to be very careful when shopping and applying. Don’t forget:

  • Be sure you understand the full policy. Review the list of injuries and accidents that are covered thoroughly.
  • Be very transparent on your application. Full disclosure about your medical history should be required for any application. If you don’t disclose something, you put your claim at risk of rejection.
  • Be sure you don’t buy a policy that interferes with your insurance at work. Some accident insurance policies may not pay out your claim if you’re entitled to worker’s compensation.

Accident insurance may not be a right fit for everyone. Before purchasing a policy, be sure to consider your lifestyle, career, finances, and needs. If you would have trouble paying your bills should you have an accident, consider speaking with a licensed insurance professional to get the coverage you need.

  1. Life Insurance
  2. Life Insurance Overview
  3. FEGLI Optional Coverage Gets Costly After Age 50

Categories: Group Life Insurance, Life Insurance, Term Life Insurance

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