The new Rates will be in forced the First day of the First pay period of September 2005----- September 4 th, 2005 in most cases. Your last premium change was April 24, 1999.

The statutes governing the Federal Employees Group Life Insurance (FEGLI) program require that premium for each age group cover the expected benefit payments for that age group. Since mortality rates in some groups have changed since 1999, the last premium change, premium changes are needed to keep each age band self-supporting.

New age bands were needed for Option B since retirees can now continue Option B without reduction by continuing to pay premiums for that coverage. This has changed the composition of the over 65 age group. Before the law change, the coverage automatically began to reduce at age 65 and continued reducing until it was gone. Option B was free once a retired employee reached age 65. There was no need for additional age bands since there were few people in the upper age bands still maintaining coverage and paying premiums. The new Option B age band premiums are being phased in over a 3 year period. Premium changes are listed below.

How is the cost of Basic Coverage changing?
The cost of Basic coverage will be reduced about 1 cent per $1,000 of coverage. The government's share for the cost of Basic coverage will be reduced by half a cent per $1,000. Annuitants pay two-thirds and the Government pays one third of the premium cost of Basic coverage.

There are no age bands for Basic Coverage. The cost is the same for everyone, except the United States Postal Service which contributes 100 percent towards Basic Life coverage for its employees.

The cost of the 50 percent reduction option for Basic coverage is increasing 1 cent per $1,000 of coverage. The cost of the option for no reduction in the amount of this coverage is dropping 21 cents per $1,000 of coverage.

Basic Coverage premiums per $1,000 of coverage:
Premium:	Annuitant = $0.3250 Government share = $0.1625
50% REDUCTION PREMIUM PER $1,000 of Basic Coverage:
At age 65, your coverage will be reduced by one percent a month; which continues until coverage reaches 50 percent of the Basic Life Value. There is a higher premium for the Lesser Reduction ($0.925 per month per $1,000) of coverage until age 65 and ($0.60 a month per $1,000) of coverage thereafter.
PREMIUM NO REDUCTION PER $1,000 of Basic Coverage:
$2.155 per month per $1,000 of coverage until age 65 and $1.83 per month per $1,000 of coverage thereafter. Note: Those who elect a “Partial Living Benefit” other restrictions apply.

Additional coverage is provided for employees under the age of 45 without additional cost. Beginning at age 36, the multiplication factor for the amount of Basic Insurance will decline by the following percentages each year until it reaches 1.0% for employees age 45 and over.

OPTION A:
Option A is a standard $10,000 of coverage on you.

There are no changes in cost for OPTION A.

Standard ($10,000)
AGE GROUP	BIWEEKLY	MONTHLY
Under age 35	$ .30	$ .65
35 through 39	$ .40	$ .87
40 through 44	$ .60	$1.30
45 through 49	$ .90	$1.95
50 through 54	$1.40	$3.03
55 through 59	$2.70	$5.85
60 through 64	$6.00	$13.00
65 through 69	$6.00	$13.00
70 through 74	$6.00	$13.00
75 through 79	$6.00	$13.00
80 and over	$6.00	$13.00

ACCIDENTIAL DEATH and DISMEMBERMENT
Accidental death benefits are equal to your Basic Life Insurance coverage. Accidental dismemberment Benefits for the loss of a hand, foot, or eye are equal to one half of the Basic Life Insurance amount; however if you lose any two of these, the full amount is payable. This applies to Option A.

OPTION B:
Having the Basic Life Insurance option; this allows you to purchase one times or up to five times your Annual Basic Pay.

Option B premiums will stay the same for anyone under age 45, reduce for those Age 45 to 64, and increase for those ages 65 and up.

Option B premiums for the age bands are guaranteed to increase again in the future!!!

Option B cost per $1,000 of Coverage.
AGE			BIWEEKLY
Under 35			$ .03
35-39			$ .04
40-44			$ .06
45-49			$ .09
50-54			$ .14
55-59			$ .28
60-64			$ .60
65-69			$ .71
70-74			$1.03
75-79			$ 1.43
80 and Over			$1.83

Employees may elect one unit or up to a maximum of five units of coverage for their family. A unit for a spouse is ($5,000) maximum $25,000. A unit for a child is ($2,500) maximum of $12,500 per child.

Option C (Family) cost per $1,000 of Coverage:

	There is no change in premiums for Option C coverage for those under age 75. For those age 75 and over, premiums will increase.

Option C premium changes
Option C Coverage Premiums per Multiple of Coverage
AGE			BIWEEKLY
Under 35			$ .27
35-39			$ .34
40-44			$ .46
45-49			$ .60
50-54			$ .90
55-59			$1.45
60-64			$2.60
65-69			$3.00
70-74			$3.40
75-79			$4.50
80 and Over			$6.00

The cost of FEGLI can increase every year based upon your annual salary. It builds NO CASH VALUE, NO LOAN VALUE, or provides you with PAID UP EXTENDED INSURANCE. It is intended as a form of immediate protection in the event of Death, Dismemberment, or Terminal Illness. Coverage may be extended, but at a very High Cost and with decreasing Face Amounts!

Note: You do have options to keep 100% - 50% of coverage.

The Federal Employee Service Center recommends that you request a Benefit Analysis to investigate your current FEGLI coverage and rates as well the cost of continuing coverage. Your cost analysis can help you make the right decisions towards retirement.

Click for Benefit Analysis