If you are looking for ways to secure your loved one's life, FEGLI is for you! Tragedy may happen with anyone, especially if you are in a life-risking profession. Therefore, all federal employees have an option to join the federal employee group life insurance program, which enables them to secure their family's financial needs in their absence. In this article, you will learn about what exactly FEGLI is, basic insurance coverage, and FEGLI rates. Please continue reading to know more about it.
Basic insurance coverage under FEGLI
Every federal employee is covered under the basic benefit plan on joining. Under this plan, the government bears one-third premium cost while a federal employee pays two-thirds. You can waive the plan during your service; however, it is wise to continue till your retirement.
- Extra BIA coverage
Employees under 45 are automatically eligible for extra BIA and don't have to pay an extra premium. This extra benefit increases the amount of BIA payable to the employee's family members if they die before age 45.
- Optional coverage
Optional FEGLI is not automatic, unlike basic and extra BIA. A federal employee has to pay the entire premium cost as the government won't contribute any portion of the premium cost. The employee has to enroll for basic BIA before they opt for Optional FEGLI. There are three types of optional coverage.
Option A – Offers additional coverage of $1000, in which you pay a 100% premium. This coverage option continued till retirement.
Option B- Offer additional coverage in an amount equal to 1,2,3,4 or 5 times your basic pay. Option B can continue until your retirement, but the premium increases drastically.
Option C - All family members are automatically eligible under option C. The coverage starts at $5000 for your spouse and $2500 for your eligible dependent children. Option C also continues till retirement.
Order of precedence for benefits distribution
If you don’t announce the beneficiary name on your FEGLI policy, the benefits may be distributed according to the following standard-:
1. Designated beneficiary
Priority is given to the person you have mentioned in your FEGLI designation benefits form. You can mention more than one beneficiary; it could be your spouse, children, or relatives.
2. Widow or widow
A widow or widower automatically becomes eligible to receive FEGLI benefits if you don’t assign any valid beneficiary.
3. Your children
FEGLI benefits may get distributed among your children in equal proportion.
4. Your parents
Your parents may receive benefits equally if alive.
Does the FEGLI rate change by age?
FEGLI premium rates are decided based on FEGLI statutes and the OPM annual FEGLI rate review process. The rates are defined for all coverage categories. For instance, under option B, your premium rate changes as you age, and under options A and C, the premium rate increases in five year age group.
Final Say
Retirement planning involves choosing the best plan, calculating retirement benefits, and paperwork. All this could be overwhelming for you; take professional help from reputed agencies like My Federal Retirement, who can help calculate your benefits estimate accurately.
The lowest Top 10 retirement age country in 2019Here’s a list of countries that might interest you if you’re looking to retire youngWhile some may prefer being a part of the active workforce, others may have huge anticipation to be retired middle age, indulge themselves in various retirement activities, and enjoy the rest of their lives to the fullest.Let us look at the top 10 countries, which have the lowest retirement ages, in 2019: Finland: 63Research linking life expectancy to retirement ages are becoming more apparent by the day.
Finland, taking this into account, may increase the retirement ages by 2020.Japan: 62.7 Japan arguably has one of the world’s busiest workforce.
This, however, is turning out to be inadequate considering Japan’s jobless rate being at 26- year lows.
The prime minister o Japan is considering to increase the working-age to 70-75, in order to fight pension burdens and increase the workforce.
Slovakia: 62.42The retirement age at Slovakia is soon to be capped at 64.
While the case for men remain constant, women who raised one child would be able to retire at the age of 63.5, while those with two children at the age of 63 and those with three or more children at the age of 62.5Singapore: 62The Retirement and Re-employment Act (RRA) states that the minimum required age in Singapore is 62 years.
Retirement at age 60: How much do I need to retire at the age of 60 if I make $100,000 each year?
To find out more, watch Troy Sharpe's retirement planning video.
Assess your financial position To prepare for retirement, the first thing to do is to work out how much money you have now, how much you might have in the future and where it will come from.
Bring this information together by finding out:what assets (houses, savings, investments) you have and how much they are worthhow much super you have and when you can access itwhether you are likely to be eligible for the Age Pension and when you can apply for it.
Make a long-term financial planThe next step is to think about how your needs might change over time.
For instance, in the first few years of retirement, you might want to travel or take up a new hobby.
Later, you may want to replace your car or renovate your kitchen.
Further down the track, you may want to move into a retirement village.Think about how you can use your different income sources to fund the different stages of your life.
