Q. I have been working for the same government entity for close to 40 years. I recently turned 60 and discovered unexpectedly that I am now paying practically twice as much for my insurance every two weeks. I elected five times my salary plus benefits for my family. I am told that I should have dropped this insurance a long time ago and bought coverage through private insurance. I am looking into getting insured but am afraid my premiums are going to be kind of high due to my health. Is it wise to drop FEGLI and seek coverage elsewhere? I received a code of approximately $249 monthly from protective. I am paying $13.80 for basic and $242.70 for optional coverage bi-weekly. Does optional insurance pay out less as one gets older?
A. You may reduce or cancel your Part B Optional insurance at any time by completing Standard Form 2817, Life Insurance Election. Just sign up for the coverage you now want to keep.
When you retire, you’ll have two choices. You can elect a full reduction in your coverage or no reduction. If you choose full reduction, at age 65 (or when you retire, if later than that) your coverage will be reduced by 2 percent per month until it reaches zero after 50 months. You will no longer have to pay premiums for that coverage. On the other hand, if you elect no reduction, you’ll have to keep paying the premiums, which will increase over time.