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FEGLI Program Booklet For U.S. Postal Service Employees


Life Insurance Means Peace of Mind for You and Your Family

Almost everyone needs life insurance; how much is for you to decide. Through the Federal Employees' Group Life Insurance (FEGLI) Program, you have several choices in selecting the amount of life insurance that's right for you. FEGLI offers:

Basic insurance: equal to your salary rounded up to the next even thousand, plus two thousand dollars, and

Three types of Optional insurance:

Option A - Standard, in the amount of $10,000;

Option B - Additional, in an amount from one to five times your annual rate
of basic pay after rounding your salary up to the next even $1,000;

Option C - Family, one to five multiples of coverage for your spouse and
your eligible dependent children. Each multiple is equal to $5,000 for the
death of your spouse and $2,500 for the death of each eligible dependent child.

Some important points to keep in mind:

  • If eligible, you are automatically covered under Basic life insurance, unless you waive it.

  • You must take action, within strict time limits, to elect Optional insurance. If you elect it when you are first eligible, you can get it without having to provide medical information to prove insurability.

  • The FEGLI Program offers group rates and convenient payroll deductions.

  • The U.S. Postal Service pays the entire cost of your Basic life insurance. You pay 100% of the cost of Optional insurance.

  • FEGLI is group term insurance. It does not have any cash or paid-up value. You cannot get a loan by borrowing from this insurance.

  • The amount of life insurance one needs varies by individual. Some general guidelines to help you calculate your needs are on page 5.

FEGLI Service Standards

  • When you use material published about the FEGLI Program, you will find that it is clear, factual, and gives you the information you need.

  • Once a claim for benefits is fully documented, the Office of Federal Employees' Group Life Insurance (OFEGLI) will generally pay it within 10 working days.

  • OFEGLI will respond to correspondence within 30 days of receipt of your letter. If we need more information before giving you an answer, we will send you an interim response.

  • We will assist you and your beneficiaries in a prompt, accurate, and courteous manner.

How Do I Choose the Right Amount of Life Insurance?

Purchasing life insurance is a personal decision that only you can make. You should first consider the funds your survivors will need for immediate expenses, such as: uninsured medical costs, funeral expenses, lawyers' fees to settle an estate, debts, and taxes. Young single people, who often don't buy life insurance because they have no dependents, should consider that funeral expenses can amount to thousands of dollars and should be provided for in some way.

Here are some very general guidelines that may help you. Not everyone will need the same amount of life insurance. Fill in the blanks to estimate your family's needs. If a particular line doesn't apply, or you think it is too much coverage, just skip it. These results are just rules of thumb. For a complete analysis of your needs, you may want to consult a financial planner.

How Much Do I Need?

So you've decided that life insurance is a good idea. Now you'll want to determine how much you'll need. This simple chart can help you come up with an estimate. Fill in the blanks to estimate your family's needs.



1. Multiple of your annual income (in dollars) that you wish to provide your family if something were to happen to you*

$  __________(1)

2. Annual expenses above and beyond daily living costs for you and your dependents (e.g., tuition, care for a disabled child or parent)

+  __________(2)

3. Emergency funds (3 to 6 months of living expenses)

+  __________(3)

4. Estimated amount for your funeral expenses (U.S. average is $5,000 to $10,000)†

+  __________(4)

5. Total the estimate of your family's needs (add lines 1 through 4)

=  __________(5)

6. Your total liquid assets (e.g., savings accounts, CDs, money market funds, existing life insurance)

-  __________(6)

7. Subtract line 6 from line 5 and enter the difference here:

= $__________(7)

The net result (line 7) is an estimate of the shortfall your family could face upon your death. Remember, these results are just rules of thumb. For a complete analysis of your needs, you may want to consult a financial planner. The maximum coverage on your life available through FEGLI is about six times your salary (or about seven times for enrollees age 35 or under), through a combination of Basic, the Extra Benefit, Option A ($10,000), and Option B (maximum of 5 times your salary). See the rest of this Booklet for details.

* Most life insurance consultants recommend at least five times your annual income. Source: Kiplinger's (, Jan., 2003).

† Source: AARP, Funeral and Burial Costs, 2002.

Consider the Way Things Are…

In addition to completing the calculation above, there are some other situations you might want to consider when determining how much life insurance you need. Remember to take into account whether you have:

  • a spouse and/or dependent children;

  • an aging parent and/or a disabled relative who depends on you for support;

  • savings and/or accumulated debt;

  • a sizable estate and/or a business.

Be sure to reevaluate your life insurance needs periodically. If you think you need more coverage, see page 11 for more information.

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