FEGLI Life insurance
FEGLI, the Federal Employees’ Group Life Insurance program, claims to cover over 4 million federal employees. But unless you are seriously ill, it’s not a great use of your money to purchase even the most basic options. Why?
1. You can almost always get better term life insurance from a company. To get an idea of the difference, I pay about $1.17 per year for each $1000 of coverage from a top-tier insurance company even though my health has been less than perfect. The basic FEGLI option is $3.90 per $1000, or more than 3 times more expensive. There is an “age multiplier” that increases the value for people under 45 years of age, but that is a maximum of 2 times for people under 35, who usually aren’t in much danger of using their insurance.
2. Many of the FEGLI rates increase by age. By comparison, my private health insurance rates are flat over the 20 year term of the insurance. Option B starts out at a relatively affordable $0.78 per $1000 at age 35 but skyrockets to $7.28 per $1000 at age 55. Also, rates can and are adjusted every few years.
3. Options B (extra coverage for you) and C (extra coverage for your family members) doesn’t cover accidental death, a major cause of death in the United States. Good private policies typically cover everything except exceptional events like war.
Where can you find cheap, conservative life insurance companies? Start with names like TIAA-CREF, GEICO, and USAA. Don’t be afraid to comparison shop!
