Can You Keep FEGLI When You Retire?

Seniors like to have life insurance in retirement to leave something for their loved ones. As federal employees, you may have held life insurance under the Federal Employees Group Life Insurance. You can keep this FEGLI life insurance when you retire as long as you meet a few conditions, including having held coverage during the last five years (or as many as possible) during retirement.

FEGLI during Retirement

Your Official Personnel Folder will have the documentation that is necessary for you to continue your coverage into retirement. That includes your life insurance enrollment for the last five years and any records of beneficiaries on file.

There are a few conditions to keep your FEGLI life insurance when you retire. These include:

  • You have basic life insurance under the Federal Employees Group Life Insurance at the time you retire
  • You have not converted your life insurance to an individual policy
  • You had life insurance for the last five years before retirement, or when coverage was available to you within the last five years
  • Your annuity payments start within 30 days

You can keep your optional benefits if you are eligible to continue your basic coverage and had coverage for the last five years or as long as it was available to you during the past five years.

Once you retire, you cannot increase your coverage, but you can cancel your plan if you want to or reduce your coverage. Once you reduce your coverage, however, you cannot decide to increase it again.

Your beneficiaries will be sure to receive their payments as long as you have them on file. Otherwise, your life insurance will payout based on the statutory order of precedence as explained in FEGLI law. Under this order, payments will be made as follows:

  • Your widow or widower
  • Your children
  • Your parents
  • Your executor or administrator of your estate
  • Your next of kin

Benefits under FEGLI

There are three schedules that you would have chosen from when you selected your policy. These determine the amount of your benefit for your remaining years.

The free policy option is the 75 percent reduction, where every month after you reach age 65, your benefit decreases by two percent until the amount is equal to 25 percent of its original face value.

The 50 percent deduction means that your policy loses one percent of its face value every month after you reach age 65 until the policy amount is equal to 50 percent of its original face value. FEGLI will charge you premiums once you reach age 65 and from then onward throughout your lifetime.

You might have chosen the no reduction policy, which does not lose any of its coverage once you reach age 65. Premiums for this policy are withheld during retirement and continue for life.

Everyone under FEGLI pays the basic premium until they reach age 65, regardless of the plan they choose. This helps to cover the face values for everyone and ensures the stability of this program.

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