Do Federal Employees Get To Keep Their Life Insurance Plans After Retirement?

Even though federal employees are automatically enrolled in the Federal Employee Group Life Insurance (FEGLI) plan unless they are opt-out, many are confused by it. As the world’s largest group life insurance plan, it has many details and nuances, making it difficult for employees to follow. Today the plan serves over 4 million federal employees and retirees. Here are important points to help clarify what FEGLI entails, including what happens with the coverage after retiring.

When Can You Make Changes to a FEGLI Coverage?

Once hired, you can make FEGLI plan decisions immediately, including canceling your policy. If you cancel the policy, it will also automatically discontinue your opportunity for optional coverage. If you maintain coverage, you can cancel at any time.

You will only be allowed limited options for certain scenarios for adjusting your coverage limits. It’s possible to increase coverage without a medical exam within 60 days of the following life events:

  • Birth of a new child
  • Marriage or divorce
  • Death of a spouse

Other types of coverage increases typically require a medical exam.

FEGLI Open Seasons

Open seasons are rare when it comes to FEGLI enrollment, as they are not regularly scheduled. The last FEGLI open season occurred in September 2016; the one before that was 12 years earlier. However, when these events occur, you can make coverage changes to your plan without taking a medical exam.

FEGLI in Retirement

To allow FEGLI as part of your retirement, you must meet the following requirements:

  • Retirement is on an immediate annuity
  • Must be enrolled in FEGLI at least five years before retirement (breaks in service during this period are allowed)
  • Still, be covered by FEGLI on your retirement date without converting to an individual policy

If you aren’t eligible for FEGLI in your retirement plan, you must either discontinue the coverage or convert it to an individual policy. Discontinuing FEGLI coverage requires completing and submitting Form SF 2817. Failing to take this action results in the continuation of premiums deducted from your paycheck.


Basic Coverage into Retirement

After turning 65, you can consider retirement and decide how much FEGLI Basic coverage to keep. You can choose between a zero, 50, or 75 percent reduction, aside from canceling. Maintaining a Basic coverage plan into retirement helps tremendously if you suffer from a life-threatening illness. With a Basic plan, you can either keep or drop full coverage. If you keep it, you can reduce coverage if you need to cut costs.
Once you choose a coverage reduction plan, your coverage will reduce each month until it hits the 50 or 75 percent reduction level. Then the remaining coverage will continue for as long as you live.


Keep Your Beneficiaries Current!

It’s crucial to keep the beneficiaries on your FEGLI policy current. Whenever a relationship with a beneficiary dissolves or someone you list as a beneficiary dies, it’s a good idea to update your policy. If you list a new beneficiary, it’s possible that after you die, the benefits go to an ex-spouse from whom you did not want to receive benefits. You can reduce the chances of this scenario by revisiting your policy every few years to ensure it’s updated.

Accidental Death and Dismemberment Coverage Component

As part of your Basic coverage, you will have Accidental Death and Dismemberment (AD&D) coverage. It’s a different type of coverage included in Basic and Option A plans. Benefits are available to survivors if you die or lose more than one limb; if you only lose one limb, you’ll get half the benefits.

Before considering getting a FEGLI or life insurance plan, consider exactly what you are insuring against and how much premium you can afford. Contact us at Premier Protection to get an affordable FEGLI plan! Our insurance professionals can guide you through the process of obtaining the appropriate coverage.

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