For federal employees, FEGLI (Federal Employees Group Life Insurance) is a valuable benefit. When retirement comes, many people wonder if their FEGLI benefits in retirement will change, especially when it comes to the cost and coverage of their policy. Let’s explore how this insurance works once you stop working and what you need to know about your FEGLI Basic Life Insurance during retirement.
What Happens to FEGLI Benefits in Retirement?
After you retire, FEGLI benefits are still available to you, but they come with some adjustments. The amount of insurance you have, and how much you pay, can be different from when you were still working.
For most retirees, FEGLI coverage is reduced automatically. If you had full coverage before retirement, it would typically drop to just 25% of your pre-retirement amount at no extra cost. However, the premiums for this reduced coverage continue, and this could be a key factor when managing your finances post-retirement.
Is There a Cost for FEGLI Basic Life Insurance in Retirement?
Once retired, many people wonder how much they will pay for FEGLI Basic Life Insurance. The cost of the insurance changes over time and depends on when you retire. While active employees have premiums taken out from their paychecks, retired employees’ premiums are deducted from their monthly annuities. These premiums might seem low, but they are something you should carefully plan for to make sure they fit within your retirement budget.
If you continue to carry FEGLI coverage after retirement, you could be responsible for paying premiums. The costs for the reduced coverage usually remain affordable, but they still need to be factored into your retirement budget to avoid surprises.
Keeping Your FEGLI Coverage in Retirement
You don’t have to keep FEGLI coverage once you retire, but it is available to you. You could decide to let your insurance reduce to the smallest possible option. Alternatively, you can choose to keep some or all of your coverage if you feel that you still need it for peace of mind.
Many people find that having life insurance in retirement is helpful, especially if they have family members who may depend on them financially. Keeping the insurance or adjusting it can allow you to protect those you love in the event something happens to you.
What Does This Mean for You?
Understanding how FEGLI Basic Life Insurance works once you’re retired is crucial in planning your finances. The changes in your coverage and costs can impact your overall retirement strategy. It is recommended to regularly check your FEGLI policy and consult with professionals who can help ensure that your insurance still aligns with your goals.
Conclusion: Make the Right Decision for Your Retirement
As you move into retirement, it is essential to understand how the costs and coverage of your FEGLI Basic Life Insurance may change. While the premiums might remain low compared to full coverage during your working years, they still factor into your financial plan.
At My Federal Retirement Help, we can help you navigate your FEGLI benefits in retirement and make sure you are making the best decisions for your future. Feel free to contact us and hire us for your finance needs! We are here to guide you every step of the way.
For more details on FEGLI Basic Life Insurance cost and how it fits into your post-retirement planning, don’t hesitate to reach out!
