The Foreign Service Journal, September 2014

54 SEPTEMBER 2014 | THE FOREIGN SERVICE JOURNAL AFSA NEWS A Good Time to Examine Your Life Insurance Coverage If on your birthday this year, your age ends in zero or five, congratulations! I will soon hit one of those milestones. How- ever, if you have life insurance with the Federal Employees’ Group Life Insurance, this year could also bring a signifi- cant rise in your premium. When you turn 60, the rate you pay for options A, B and C could more than double. So it is a good time to examine your life insurance needs, and consider whether or not to continue with FEGLI coverage. The FEGLI program is a “group term” policy. Once enrolled and as long as you pay the premium, you are cov- ered for the duration. There is no medical exam or other limitation on participation, which is why it is an especially attractive option for those who have medical issues or work dangerous jobs. Moreover, the FEGLI retire- ment benefit is prefunded by premium costs so that some coverage can be continued after age 65 at no cost. FEGLI Basic and Options. FEGLI consists of “Basic” insurance and options A, B and C. FEGLI Basic is a level- rate program. An enrollee’s rate remains the same whether he or she is a new employee or retired. Unless waived, new employees are automatically enrolled in FEGLI Basic. An enrollee who carries Basic into retirement can elect a 75-percent reduction, meaning that the Basic cover- age reduces by 2 percent each month until it reaches 25 percent of its pre-reduc- tion amount. But there is no premium once the reduc- tions begin, and the policy remains free for the rest of the enrollee’s life. Options A, B and C are optional enrollment programs with escalating premium rates that adjust every five years. Depending on the phase-out or post-retirement cover- age option chosen, options A, B and C may be free after the enrollee reaches age 65, subject to a phase-out. If an enrollee prefers to retain a constant level of coverage, his or her premiums will increase every five years until age 80. What Do You Need? Do you still need life insurance in retirement? How much do you need? If the children are grown, the house is paid off, and you are healthy, it may be time to dial down. What are your actual needs? Do you have a suf- ficient emergency fund? Is your spouse protected? For some, continuation in the FEGLI program is best, especially if there are health or lifestyle issues. For others, private insurance offers a less expensive alternative. Consult a financial adviser. If you do reduce or discon- tinue life insurance, consider placing the money saved into retirement savings. And, happy birthday! n FEDERAL LONG -TERM CARE I NSURANCE EVENT On July 21, AFSA continued its popular series on federal benefits, this time focusing on federal long term care and survivor annuities. Jeannie Singleton, senior account manager at the Federal Long-Term Care Insurance Program, and Jacqueline Long, chief policy adviser for the Office of Retirement at the State Depart- ment, were the panelists. Singleton and Long explained the topics in detail to a large number of AFSA members who came prepared with numerous questions. You can find a thorough write-up of the presenta- tions and discussion in the August issue of the AFSA Newsletter and at afsa.org/retiree. Views and opinions expressed in this column are solely those of the AFSA Retiree VP. Contact: lawrencecohenassociates@hotmail.com or (703) 437-7881 RETIREE VP VOICE | BY LARRY COHEN AFSA NEWS AFSA/AISHWARYARAJE You may cancel or change your FEGLI election by sub- mitting the completed SF 2818 to OPM’s Retirement Office at: U.S. Office of Personnel Management Retirement Operations Center P.O. Box 45 Boyers, PA 16017-0045 For more information on FEGLI visit www.opm.gov/ healthcare-insurance/ life-insurance/