The life insurance plan offered by the federal government is called the Federal Employee Group Life Insurance program (FEGLI). When an employee enrolls in a FEGLI whole life insurance plan, he or she may choose a policy that is equal to as much as five times his or her annual income.
Enrollment may take place in the first month of employment or during specified enrollment periods. By enrolling during the first month of employment, the employee may avoid medical underwriting. This means no exam or medical documentation are required.
This is excellent for people who are in a compromised state of health, but it may not be a good idea for someone who is in excellent health because premiums are affected for everyone on the plan.
On the FEGLI program, the cost of premiums goes up fairly steeply as time passes. All enrollees are subject to these increases; however, people who are in good health may be able to get a better deal elsewhere.
Many federal employees are unaware that their premiums are going to increase by more than ten times between the ages of 35 and 55. By the time they reach middle age, they suddenly find themselves paying very high premiums.
Luckily, federal employees who are in good health and are between the ages of 50 and 55 have a few options. By switching from a FEGLI whole life policy to a term life policy, a federal employee may be able to save as much as $200 a month in premiums.
Of course, you do not have to wait until you are 55 to make this choice. You can choose to purchase a term life policy independently rather than participating in a FEGLI whole life policy at any time you wish.
It is important to realize that a whole life policy is in place for your whole life. If you live into your 90s or 100s and pay your premiums, your policy will still be in place. A term life policy is in place for a term – usually 30 years.
You may base your choice on factors such as your current quality of life and typical longevity in your family. If paying very high premiums for a whole life policy very negatively impacts your current quality of life and/or you do not expect to live to be extremely old, a term life policy with lower cost premiums may be a very good choice for you. You can see a brekdown and more details about alternatives to FEGLI policies when you CLICK HERE.
The FEGLI program is very solid and dependable. It is convenient for federal employees, and the insurance comes from Metropolitan Life, a well-known and respected company. Still, if the financial reality of this program is a burden to you, you may very well wish to research your options in either whole life or term life policies from a different company or even term life policies from Met Life. The savings in premiums can be quite significant in the long term.