Federal Employee Group Life Insurance: Extra Benefit

By January 26, 2016FERS

EXTRA, EXTRA, What’s the FEGLI Extra Benefit all about?!

This was essentially the question I received from a reader. However, to put it in more eloquent terms:

I was told by a coworker at my job that I receive an extra benefit if I am young enough, do I receive this if I am a Postal Employee?

Short answer:

Yes, you do.

Long(er) answer:

The Federal Employee Group Life Insurance Extra Benefit is provided by the Federal Government/Office of Personnel Management (OPM) to those who qualify.

Now, how do you qualify?

Well you first have to be:

  • Full-time
  • Age 35 or younger to receive the full Extra Benefit
  • Available to purchase Federal Employee Group Life Insurance

That’s about it.

The next logical question is then, what is it?

The FEGLI Extra Benefit essentially doubles the death benefit for your Basic Life Insurance.

And, that’s a really good deal.

Let’s take a look at an example:

John Doe is 32 years old with a wife and 2 kids.

He currently makes $45,739/year as part of his base salary with the VA Hospital.

His Basic Life Insurance (click here to learn how this is calculated) would amount to $48,000.

However, because John is 35 or younger, he receives an “EXTRA” Benefit. (And who doesn’t like extra benefits?)

This Extra Benefit would increase John’s Basic Life Insurance death benefit to $96,000. Not too shabby for something he only pays $.15/thousand for. (And Postal Employee’s receive for free!)

The final question that’s likely spinning around inside your noggin is,

What happens at age 36, and why that number?

The first question I can answer, the latter I give you my best guesstimate.

At age 36, OPM is not going to throw you off the cliff. They will rather gently push you down a sloped hill.

What I mean by this, is the Extra Benefit does not suddenly disappear at 36, but rather decreases by a certain percentage each year until it is finally gone.

That percentage decrease is 10%. So, if you do the math, the extra benefit will cease to exist at age 45.

Now an answer for the second question.

My best guess on why OPM decided on age 36 being the beginning of the extra benefit disappearing is simply, it’s a nice added benefit, but it will rarely be used.

However, the families who will have to use it will be very grateful as I personally know how difficult losing a wage earning spouse can be on a young family.

Have any experiences with the FEGLI Extra Benefit you care to share? Leave them in the comment section below!

Cooper Mitchell

Author Cooper Mitchell

Hello, I'm Cooper. I am the President of and an Investment Advisor Representative for Dane Financial, LLC. I specialize in helping Federal Employees better understand their benefits and prepare for retirement through Comprehensive Financial Planning and Investment Management. When I'm not helping federal employees, you can find me focusing on other entrepreneurial pursuits, spending time with my beautiful Wife, worshipping Christ, blogging, lifting (somewhat) heavy weights, and reading non-fiction.

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