The start of a new year is a fantastic time to review your financial plan and ensure your affairs are in order. Legacy planning is a vital component of that annual financial housekeeping.
Outside of your retirement accounts, you may have some additional legacy benefits contracted through the federal government, such as your life insurance with FEGLI. You can reduce or drop your coverage at any time by filling out a FEGLI Change Form.
Be sure to fill this out if you wish to get rid of any coverage, particularly if you are a single parent paying for Option C and your children are now all older than 26. You may also want to drop Option C if it was solely covering an ex-spouse. MetLife (the underwriter of FEGLI) is not going to call you and tell you that you are paying for coverage you no longer have, so be sure to take your own initiative and double check where you currently stand.
You can also update your beneficiaries at any time by filling out a Designation of Beneficiary Form. If you are looking to add coverage, you may only do so during a FEGLI Open Season or within 60 days of a Qualifying Life Event (QLE)¹. Be cognizant of any QLEs you may experience this year: marriage, divorce, death, or a new child, and give yourself enough time to make insurance elections within the approved time frame.
You may also consider your FEHB a legacy planning tool when your spouse and/or dependents are enrolled in your healthcare. Any adjustments made during the 2020 FEHB Open Season took effect starting on January 1st. Federal retirees who want their spouses to remain on their healthcare plan in the event of their passing MUST elect at least a partial Survivor Benefit in order for the spouse to retain eligibility. If you have retired recently and need to make an adjustment, you have 18 months from the end of your Interim Period to elect some form of the FERS Survivor Benefit. You will have 30 days from the date of your first regular monthly payment (end of Interim Period) to reduce or cancel it².
2020 brought with it a lot of unexpected changes and unforeseen events. It caused many of us to shift our future life plans, at least for the time being. At PARCO, we’re starting off the year by checking in on your overarching federal retirement plan, including your legacy. This review is a great way to start 2021 on the right foot, so click the button below to connect with our retirement strategists to check coverage eligibility, get help with forms, or make adjustments.
Works Cited
¹United States, Congress, Office of Personnel Management. "FEGLI Handbook", OPM. www.opm.gov/healthcare-insurance/life-insurance/reference-materials/handbook.pdf#page=39.
²United States, Congress, Office of Personnel Management. "Frequently Asked Questions - Retirement", OPM. www.opm.gov/faqs/QA.aspx?fid=735eda40-61a8-45df-b6ad-47185f4c91a5&pid=1c4d8576-f714-4b61-b75c-3d390655ef81#:~:text=If%20you%20change%20your%20election,or%20reduce%20the%20survivor%20benefit.