As we enter open enrollment season for federal employee health, dental, and vision insurance, now is a good time to look at all your insurances, including life insurance. Here are 5 things you should review as part of your year-end planning.
1. Do you have copies of any current life insurance policies, provider names and policy numbers, and do loved ones know where they are kept? Here are a few tips from the Insurance Information Institute on organizing your life insurance records. If tragedy strikes, having all your important documents in an easily accessible place can help.
2. Are your beneficiary designations up-to-date? Have you gotten married or divorced? Had additional children? It’s a good idea to review your beneficiary designations every year and you may want to contact an attorney to best understand how to incorporate your life insurance and beneficiaries into your estate plan.
If your policy is with a private insurer, check with their customer service center on how to review and update beneficiaries. For your Federal Employees’ Group Life Insurance (FEGLI) coverage refer to their designating a beneficiary page for instructions.
3. Do you have enough coverage? There are lots of life insurance calculators out there, like this one from bankrate.com that can be a starting point for helping you identify your needs. If you add coverage amounts to an already existing policy you may need to undergo additional underwriting. Also, as you age your circumstances and financial needs may change and you may want to reduce coverage levels.
4. Is your spouse or life partner covered? As you review your life insurance coverage, be sure to review it in tandem with your partner’s coverage to ensure all your family’s needs are covered. And don’t forget, if your spouse is not working, you should still consider coverage if they are caring for children or other family members.
5. Do you have the right mix of coverage? Most federal employees have some form of FEGLI. In fact, for the FEGLI “Basic Life Insurance” the federal government pays 1/3 of the cost and you pay 2/3. You have the option to buy additional FEGLI insurance, but like with any significant purchase, we recommend getting more than one estimate and comparing price (both current and for higher ages), benefits, and providers. FEGLI is group term insurance, so you would be comparing it against other group and/or term policies. Several ratings agencies review insurance companies – check out this piece to learn more about that. If you decide to swap one insurance for another, make sure you are fully approved before you cancel an existing policy.
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