Life insurance plays a vital role in financial planning, offering a way for policyholders to provide for loved ones. The amount of coverage needed to care for the people and other stakeholders who are financially dependent upon you is called your “insurable need”. Identifying the amount of your insurable need is the first step. Once you’ve settled on an amount, determining the best manner to cover it is the next step.
The good news is that, as a federal employee in Alexandria, you have access to one of the world’s most extensive group life insurance programs. The Federal Employees’ Group Life Insurance (FEGLI) program offers members valuable protection for themselves and their loved ones. Still, navigating the complexities of federal employee life insurance can be challenging. Understanding your options can help you make informed decisions on the right coverage for your specific circumstances.
Federal Benefits in Alexandria: What to Know About FEGLI
Current statistics reveal that FEGLI provides coverage to more than 4 million federal employees and retirees — as well as many of their family members. Unless a worker waives it, most federal employees are automatically enrolled in FEGLI’s Basic coverage. However, there are other options beyond the Basic program to consider when making your final selection. Here’s a breakdown of each FEGLI component:
Basic Coverage
The Basic insurance amount in this program is equal to your annual basic pay, rounded up to the next $1,000 plus $2,000. For example, if your annual salary is $126,949, your Basic insurance amount would be $127,000. The government pays one-third of the premium for Basic coverage, making it an affordable option for many. Additionally, employees under 45 have access to double life insurance benefits. At age 36, the doubled benefits decrease by 10 percent annually until age 45 when the extra coverage ends.
Beyond Basic coverage, FEGLI also offers federal employees three types of optional programs:
Option A: Standard Insurance
The Standard program provides an additional $10,000 of coverage. It’s important to note that premiums for Option A increase as you age.
Option B – Additional Insurance
Option B allows policyholders to elect coverage of one to five times your annual basic pay (rounded to the next $1,000), making it a desirable option for those with needs requiring significantly increased coverage.
Option C – Family Insurance
The Family option provides coverage for your spouse and eligible dependent children. You can select one to five multiples of coverage, with each multiple providing $5,000 for your spouse and $2,500 for each eligible child.
Of particular importance, you should make your FEGLI elections when you first begin employment with the Federal Government or when you have a qualifying life event as FEGLI is not a part of the Federal Open Benefit Season.
Life Insurance in Alexandria: Factors to Consider
There’s no such thing as one-size-fits-all (or even most) life insurance. It’s essential to consider your unique circumstances and financial responsibilities to determine the right level of coverage for you and your family. Some key factors to consider include:
- Your current income and future earning potential
- Outstanding debts, including mortgages, car loans, credit cards, etc.
- Future expenses, such as your children’s education
- Your spouse’s earning capacity
- Your retirement savings and other assets
- Your health profile
Comparing FEGLI with Private Policy Options
While FEGLI is a valuable benefit for government workers, it may be worth exploring private life insurance options in Alexandria as well. FEGLI offers guaranteed acceptance for the basic program, requires no medical exam, and bases premiums on age. So for people with underlying health conditions or a high risk health profile, it is an excellent choice.
But for people with good health private policies may potentially offer lower premiums, more flexibility with coverage options, and the possibility of cash value accumulation with certain programs.
Additionally, FEGLI premiums typically increase as you age, and coverage is significantly reduced when you retire. Private programs allow participants to lock in rates for a specific term or even for life, offering greater control over the policy’s terms and costs. Consulting with a professional financial advisor can help you determine the right blend of FEGLI and private insurance for your needs and lifestyle.
Steps to Enroll and Adjust Your Policy
Whether you are choosing FEGLI or opting for private life insurance, the main concern has to be covering the insurable need. You should take the following steps:
Review Current Coverage
Understand the level of protection you currently have under FEGLI.
Evaluate Needs
Assess whether additional coverage is necessary based on your insurable need.
Explore Private Options
Contact providers in Alexandria to compare plans.
Good Life Financial Advisors of NOVA Can Help You Make Informed Decisions About Life Insurance
Choosing the right policy as a federal employee in Alexandria doesn’t have to be overwhelming. At Good Life Financial Advisors of NOVA, we specialize in helping federal employees navigate their life insurance options, including FEGLI and private plans. Our experienced team is dedicated to helping you make informed decisions that align with your financial goals and provide your loved ones with the protection they deserve.
Ready to take the next step? Schedule a free consultation with our team today.
We’ll have a short conversation to see if we’re a good fit for each other
The opinions voiced are for general information only and are not intended to provide specific advice or recommendations for any individual.
