Federal workers will be offered a rare opportunity to enroll in, or modify, government-sponsored life insurance.
The question we must raise though is…..is it worth it? More on that in a moment.
According to a notice in the Federal Register, the U.S. Office of Personnel Management will hold a Federal Employees’ Group Life Insurance open season (also known as open enrollment) between September 1, 2016 and September 30, 2016.
It’s a rare event. According to FedSmith, the last FEGLI open season was 2004, prior to that 1999. Active and eligible federal workers can elect to enroll or modify their coverage during that time span. However, enrollment, or modifications to an existing life insurance plan, during this open season window will not go into effect until on or after October 1, 2017.
Here’s one perk: this rare FEGLI open season allows federal workers to circumvent the physical exam requirement; that’s one reason why life insurance coverage is delayed one full year after enrolling.
Outside an open season period, eligible federal workers can usually always enroll in FEGLI or increase their coverage, but only if they take a physical exam or if they experience a qualifying life event. According to OPM rules, a qualifying life event is defined as marriage, divorce, death of a spouse, or providing care for an eligible child.
Open season, however, may be an attractive option for federal workers with current, or potential, health issues since they can avoid the physical exam component that is generally required for FEGLI enrollment.
That fact is even acknowledged in the Federal Register post announcing the open season window: “Open seasons are one method by which healthy individuals can be attracted to join and reduce the risk profile of the program. Some less healthy individuals may elect coverage during open seasons” as well.
There are, however, a few caveats, especially for retired federal workers: one, they can’t participate in open season; two, they are never allowed to increase their FEGLI coverage, within or outside the open season window.
And for active federal workers, be warned: FEGLI coverage is highly restricted. For example, when you retire, you really only have one option when it comes to your FEGLI coverage, reduce it. You’re also locked into rate increases, and rate increases always happen.
Also keep in mind that FEGLI is not your most cost-effective option for life insurance. Your FEGLI premiums periodically increase. And as you age, your premium rates tend to increase more.
It’s complicated. We know. But we can help you determine the best life insurance package for you. We’ll examine your pay and benefits, and your current and expected income to see what you can afford. And if you’re already enrolled in a government-sponsored plan, we’ll take a close look at your FEGLI coverage to see if it’s the best option for you.
Please contact one of our benefit specialists for a free consultation.
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