How the Government Shutdown Could Impact FEGLI

1. How the Government Shutdown Could Impact FEGLI

2. The government shutdown in the United States has affected millions of Americans and hundreds of thousands of government employees. Some sources estimate that it could cost the country $55 billion if the shutdown continues for three or four weeks. What does all of this mean for federal employees who have been furloughed and have life insurance with FEGLI? FEGLI is the abbreviation for the Federal Employees' Group Life Insurance. Federal employees are automatically enrolled in the basic plan at the time of employment and have the option to get more coverage if they would like. In the current government shutdown, the government is reporting that federal employees will continue to get coverage even if they are not currently getting paid. They also report that employees will continue to have coverage for a 12 month period without pay.

3. However, we have all seen how quickly the government can change things when they begin to run out of money. If the shutdown lasts for a few weeks, the amount of benefits they could pay out may decrease. Even if the government reopens soon, there are no guarantees that if another shutdown occurs that coverage will not be threatened. Another serious issue to consider is that it could take a long time for your family to receive your FEGLI death benefit if you should die during a government shutdown or even in the months or years afterward. If the government does not pay your benefit right away, your family could still have to cover your funeral and burial expenses and any outstanding debt until they receive payment from the government.

4. Even though the government is assuring federal employees that their FEGLI coverage will continue, you are taking a risk by having the government in control of your life insurance during such a turbulent time. If you had life insurance coverage with a private carrier instead of the government, you would not have to worry about whether or not your family would receive your death benefit. The top insurance carriers would not discontinue benefits in the event of a government shutdown, and they are highly unlikely to go out of business. Your life insurance benefits would be guaranteed. Some life insurance carriers offer plans with premiums that are even more affordable than FEGLI as well. Because of this shutdown, many federal employees have come to realize that their jobs are not guaranteed. It's important for them to understand that their benefits may not be guaranteed either.

5. Sources: http://crfb.org/ http://ezinearticles.com/?How-the-Government-Shutdown-Could-Impact-FEGLI&id=8050286