If you’re a federal employee thinking about dropping your Federal Employees’ Group Life Insurance (FEGLI), it’s important to understand how this choice could affect your overall retirement. FEGLI benefits in retirement can be a valuable part of your financial security, but not everyone needs the same level of coverage. This blog will guide you through some key points to consider before making your decision.
What Is FEGLI and Why Does It Matter?
FEGLI is the life insurance program offered to federal workers. It provides basic life insurance plus optional coverage you can add for yourself, your spouse, and your children. This insurance can offer peace of mind that your family will be financially supported if something happens to you. As you plan your pension, knowing how FEGLI fits in can help you make smarter choices.
Think About Your Future Financial Needs
Before dropping FEGLI, ask yourself how much financial support your loved ones might need after your retirement. Life insurance isn’t just about the here and now; it’s a way to protect your family’s future. Some federal employees find that their savings, other insurance, or pension benefits are enough. Others feel safer keeping FEGLI coverage. Understanding your own situation will help you decide.
Review the Cost vs. Benefit
FEGLI premiums come out of your paycheck, so dropping coverage lowers your monthly costs. That sounds good, but it’s important to weigh the short-term savings against the long-term protection you could lose. If you drop FEGLI and later want it back, you might have to go through health exams or face higher premiums. Being sure about your health and financial situation now will help you avoid surprises.
Consider Your Health and Age
Your health and age play a big role in your insurance decisions. Younger and healthier employees often find it easier to keep FEGLI because premiums are lower and coverage is more affordable. If you’re older or have health issues, you might think about dropping FEGLI and looking for other options. Keep in mind that outside insurance might cost more or cover less than FEGLI.
Plan With Your Pension in Mind
FEGLI works alongside your federal pension to create a bigger safety net. As you think about dropping FEGLI, take a close look at your pension and other retirement savings. Tools like a federal pension plan calculator can help you understand what your pension might cover and what gaps insurance could fill. Planning carefully now will give you confidence in your retirement finances.
In Closing: How My Federal Retirement Help Can Support You
If all this feels overwhelming, My Federal Retirement Help is here to assist! We know federal retirement plans and FEGLI inside out. We can help you weigh your options and make smart decisions about your life insurance and pension planning. Feel free to dial us at (877) 733-3877 and let us help you plan your retirement!
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FAQs
Can I get FEGLI back if I drop it now?
Yes, but you may need to provide proof of good health and could face higher premiums.
Does FEGLI coverage reduce when I retire?
Yes, basic FEGLI coverage reduces to 75% at retirement unless you choose to continue it.
Will dropping FEGLI affect my federal pension?
No, your pension stays the same, but you might lose important life insurance protection.
Are there alternatives to FEGLI for life insurance?
Yes, you can buy private life insurance, but it might cost more and have different rules.
How can I find out how much pension I will get?
Use a federal pension plan calculator or get help from a retirement expert like My Federal Retirement Help.
Thinking about dropping FEGLI is a big decision. It’s smart to think about your whole retirement plan, not just one piece. If you want a clearer picture of your pension and insurance options, give My Federal Retirement Help a call at (877) 733-3877. Let’s make your retirement plan work for you!
