FEGLI is kind of a ripoff, right?

[Anonymous]

I’ve been a fed for over 15 years and am about to turn 55, which means my FEGLI premiums are about to increase by about 25%. The problem is, I’m reasonably healthy (I don’t smoke, run half marathons, good vitals) and, with FEGLI, I’m probably subsidizing the less healthy feds. I’ve checked out some other options online and it looks like I can do much better. I’m plann8ng to be with the government for another 12-15 years. Is there any good reason to stick with FEGLI?

[Anonymous]

Correct, you can do better on the private market.

[Anonymous]

OP, my DH and I are of a similar age and have the basic FEGLI coverage (100% of our incomes). I attended a FEGLI seminar and there are definitely some good reasons to keep it. One is that when you retire (at a certain minimum age, as I recall), you can elect to reduce your coverage to 25% of your final federal income, and the government pays 100% of the premium. Assuming your final federal salary was 100k or more, this gives your survivors a significant chunk of money, tax free and at no cost to you once you've retired, to cover your final expenses.

I believe there are other perks but can't recall offhand. But you should definitely look into it more before you drop FEGLI coverage, since you'd probably never be able to re-enroll. I agree though that it doesn't make sense once you hit your 50s to buy FEGLI coverage at more than 100% of your income, unless you have significant household debt or low college savings.

[Anonymous]

Anonymous wrote:OP, my DH and I are of a similar age and have the basic FEGLI coverage (100% of our incomes). I attended a FEGLI seminar and there are definitely some good reasons to keep it. One is that when you retire (at a certain minimum age, as I recall), you can elect to reduce your coverage to 25% of your final federal income, and the government pays 100% of the premium. Assuming your final federal salary was 100k or more, this gives your survivors a significant chunk of money, tax free and at no cost to you once you've retired, to cover your final expenses.

I believe there are other perks but can't recall offhand. But you should definitely look into it more before you drop FEGLI coverage, since you'd probably never be able to re-enroll. I agree though that it doesn't make sense once you hit your 50s to buy FEGLI coverage at more than 100% of your income, unless you have significant household debt or low college savings.

The basic coverage is one thing, and I think there's good reason to stick with that. But all the options and multiples are another thing. I was carrying the fullest amount of FEGLI -- basic coverage plus options A, B, and C at 5 multiples -- until very recently. I started this coverage when I was a young parent in my early 30's. Now I'm 50, and the premiums went up. I ran my Federal benefits statement and looked at the numbers, everything that my husband would get in the event of my untimely death. The basic death benefit and survivors coverage outside of FEGLI, combined with my TSP, annual leave balance pay-out, and term policies we have through State Farm led me to feel that all this additional FEGLI coverage is now excessive for me and not worth the additional expense. I dropped all the options and scaled back down to basic.

[Anonymous]

With FEGLI, you're subsidizing the fat smokers with high blood pressure and cholesterol. There's no benefit to being healthy, as there is with a private insurance company.

I can get twice the coverage through Pacific Life than I can through FEGLI, for the same price.

[Anonymous]

I just turned 40 this year, and I have private insurance through Haven life, plus I have life insurance through my agency. I currently also have fegli, but i plan to drop it when the premiums go up, and as my kid gets older since technically i won't need as much insurance.

[Anonymous]

I am an actuary - try on the private insurance market. Go to term4sale.com and get a rough idea of premiums. Haven Life is not cheap - you can do better.

[Anonymous]

Anonymous wrote:I’ve been a fed for over 15 years and am about to turn 55, which means my FEGLI premiums are about to increase by about 25%. The problem is, I’m reasonably healthy (I don’t smoke, run half marathons, good vitals) and, with FEGLI, I’m probably subsidizing the less healthy feds. I’ve checked out some other options online and it looks like I can do much better. I’m plann8ng to be with the government for another 12-15 years. Is there any good reason to stick with FEGLI?

I'm curious to hear if you get a good rate on the open market at 55 yo, even if you are in good shape. And also, do you need life insurance anymore?

DH and I got 30 year life insurance at the age of 30. The idea is that by 60, the kids are grown and out of college, we have reasonable savings, and we will no longer want to pay for the (greatly increased) premiums anymore.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I’ve been a fed for over 15 years and am about to turn 55, which means my FEGLI premiums are about to increase by about 25%. The problem is, I’m reasonably healthy (I don’t smoke, run half marathons, good vitals) and, with FEGLI, I’m probably subsidizing the less healthy feds. I’ve checked out some other options online and it looks like I can do much better. I’m plann8ng to be with the government for another 12-15 years. Is there any good reason to stick with FEGLI?

I'm curious to hear if you get a good rate on the open market at 55 yo, even if you are in good shape. And also, do you need life insurance anymore?

DH and I got 30 year life insurance at the age of 30. The idea is that by 60, the kids are grown and out of college, we have reasonable savings, and we will no longer want to pay for the (greatly increased) premiums anymore.

OP here: I have two kids, a sophmore in HS and a 5th grader (got a late start on the parenting thing). According to some on-line resources, a $750K policy with a 15 year term would be $135/mo.

[Anonymous]

Just turned 55, have FEGLI for 3x salary (~$400K) and the rate works out to $152/mo.

Time to start shopping around.

[Anonymous]

Not a good deal per retirement seminar lecturer.

[Anonymous]

It's a horrible deal compared to the private market. Everyone pays the same rate for the basic coverage, which means the rate is fantastic for retirees and unbelievably high for young workers.

Just wait until they have an open enrollment period in the decade before you retire and re-enroll.

[Anonymous]

What do you expect from a life insurance plan that doesn't require a physical?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’ve been a fed for over 15 years and am about to turn 55, which means my FEGLI premiums are about to increase by about 25%. The problem is, I’m reasonably healthy (I don’t smoke, run half marathons, good vitals) and, with FEGLI, I’m probably subsidizing the less healthy feds. I’ve checked out some other options online and it looks like I can do much better. I’m plann8ng to be with the government for another 12-15 years. Is there any good reason to stick with FEGLI?

I'm curious to hear if you get a good rate on the open market at 55 yo, even if you are in good shape. And also, do you need life insurance anymore?

DH and I got 30 year life insurance at the age of 30. The idea is that by 60, the kids are grown and out of college, we have reasonable savings, and we will no longer want to pay for the (greatly increased) premiums anymore.

OP here: I have two kids, a sophmore in HS and a 5th grader (got a late start on the parenting thing). According to some on-line resources, a $750K policy with a 15 year term would be $135/mo.

So you need life insurance for another 15 years? Don't you have a term policy already, the FEGLI limits are pretty modest for this area.