FEGLI or another life insurance option?

[Anonymous]

I have basic FEGLI coverage, but I am looking to increase my life insurance coverage. I am in my early 40s, recently bought a house, have young children, and my DH's income is derived primarily from disability and other payments. My primary concern is that if something should happen to me, I would want my family to be able to live in our house and keep the same standard of living. To pay off mortgage, car note, and other bills that would free up DH's monthly income to cover childcare, food, etc., I would need a large insurance policy. If I elect 5x my annual salary, FEGLI can give me $740K for $74/month. USAA can give me the same coverage for a 30-year term for $166/month. It's more expensive, and is only for a term whereas I believe FEGLI is permanent, as long as I remain a federal employee. Based on this quick comparison, FEGLI seems to be a better deal, although I am sure there are other companies out there. USAA is good, but can be expensive.

I looked in the archives and someone mentioned that FEGLI premiums rise as you age. Is that true? How much do they rise? Also, has anyone tried to enroll without a QLE? I think I can take a physical (which shouldn't be a problem), but has anyone successfully increased coverage that way?

Other life insurance options that I should look into?

Thank you.

[Anonymous]

FEGLI rates can be found on the OPM website-- they are banded in 5 year age bands and do rise a fair amount as you age.

Generally, you can do better on your own if you are in good health. A 30 year policy for you might be expensive because it takes you past age 70. Consider whether a 20 year policy, which would take you to age 62 or so, would be enough coverage-- it likely is substantially cheaper.

You can price term insurance on a few decent websites (or this guy is a decent agent, http://www.wealthvisor.com/p/richard-lourie)

[Anonymous]

I would shop around - FEGLI rates ramp up substantially as you age. You should be able to do better unless you have underlying health conditions.

Not sure why 30 year term is a problem vs. FEGLI being "permanent" for as long as you are an employee - presumably you are going to retire in around 30 years anyway? A 30-year term policy or even a 20, 25 year term seems like it would be fine.

That being said, I signed up for increased FEGLI coverage outside of an open season and it was pretty easy. Had to get a physical which I was able to get for free at my employer health clinic.

[Anonymous]

FEGLI isn't portable. So if you leave federal service you cant take it with you. I'd get life insurance on your own.

[Anonymous]

Didn't know you could just adjust fegli absent an open season (which almost never happens) or a life event. I believe there are other survivor payments in govt--not sure, though.

[Anonymous]

Why do you need a 30 year term? If you die at age 65, won't your retirement savings go to your husband and he will live on that? Typically life insurance is meant to replace the income --- so if you will not be making income, you don't need life insurance. That may save you some money.

Are you in good health? No high blood pressure or diabetes? Are you overweight? If you have any of these, you may be better off going with FEGLI -- remember they have to take eveyrone, so the rates are based on the average fed employee's health (or lack thereof). If you are in better health than the average joe, you would be better off getting your own policy based on a health exam. When DH was mid 40s, we got a 20 yr $400K policy with Amer Gen. for about $450/year (health exam required). Now, at mid 50s it is much more expensive to get a 10 yr. policy.