FEGLI 5X is Robbing Your TSP!

But don’t worry, WE CAN HELP!   You’ll be surprised by how much your money can grow with your current level of income and some adjustments.  For example, I recently met Brenda G. She turned 50 years old in January and she earns $126,000 a year.

Brenda has 5x her salary in FEGLI coverage, which is excellent for her family.  Her Total Coverage is $764,000 which costs her $89 per pay period.  At age 55, the cost was set to increase to $156.70.  At age 60, that number would jump to $345 per pay.  By the time Brenda would turn 65 years old, her FEGLI would cost a whopping $450 per pay period.  In total, by age 65, she would be paying $90,863 for FEGlI!!!

We Changed All That On The Spot. 

Brenda came to Fed Legacy for help with her finances.  By putting Brenda into a Private Policy for the same amount of coverage ($764,000), we were able to reduce her bi-weekly payments from $89 per pay period to $81.  Saving eight dollars per pay may not sound like much.  You likely spend more than that every day for lunch.  But this $81 per pay was fixed for the next 30 years, saving her $59,273 over the next 15 years, without spending any extra money and with the same coverage.


We then advised Brenda to invest all the money she saved into her TSP… increasing her nest egg significantly.  Wouldn’t it be great to retire comfortably and reap the benefits of all your years of hard work?  CLICK HERE so we can talk further about your financial legacy.

 

Purpose of Life Insurance Through Your Job

The purposes of Life Insurance through your job is for an employer to be able to offer its employee’s life insurance coverage. Some people get it mixed up thinking it will last for their entire life, but it does not. This policy will only last you as long as you work for the organization that you work for and the cost of it will go up over the time you are there. Most Life Insurance policies through your job stay the same from age 18-40, and once you reach the age 40, it goes up every five years. However, when you get to age 65-75, it gets astronomical to the point where you’re forced to drop it. In most cases like for the Federal Government for example after the age of 65 not all the coverage goes away just 75% goes away. This is not a problem if you are working the job or you die while you are working it ends up being a good thing, the issue arises when you think this is all the coverage you have, and it will last for the rest of your life. On average more than 95% of people die in retirement and not during their working years. So, while Life Insurance through your job is cool, it’s always good to get other insurance coverage outside of it.

Does Life Insurance Through Your Job Pay Out Right Away?

Life insurance through your job as long as your beneficiaries are set up properly will pay out immediately. Once your family sends the insurance company the death certificate they will send the money; there is no waiting period. There are some policies where you have to be alive for one year, two years or three years and in some case, four years before the policy will pay out in its totality. With a Life Insurance coverage through your job there is no waiting period in most cases, there maybe one or two out there but I am not aware of any. Life Insurance policy through your job is designed to pay out the full death benefit once the person that the policy is designated for passes away. Hence you don’t have to worry about that waiting period as it pays out right away in the full amount.

Does Life Insurance Through Your Job Have Cash Value?

Life Insurance through your job does not have any cash value. The reason it does not have any cash value is that it is a term policy designed to be as cheap as possible to give you the most amount of coverage during that period. No term policy has cash value only whole life, and universal life policies have cash values. Once you stop paying the premium on your Life Insurance through your job that will be it. There are no cash values to back it up. This is what keeps the cost low because there is no cash value, no bells or whistles it is just a straight policy you have while working that is only beneficial to your family if you die within the period of employment.