Micah Shilanski 00:04
Have you ever wondered, by dropping a spouse from coverage, from insurance, whether life or health, how that affects you in retirement? Well, if you have and stay tuned for this FERS Federal Fact check. Hi, I’m Micah Shilanski with Plan Your Federal Retirement. I’m excited to talk to you about a question we have from Bobby. Now, as you know, one of our goals at Plan Your Federal Retirement is to help another 1 million federal employees with their retirement, the only way we get to do that is with your help, so smash that like button, share this with a friend, send this out there, so YouTube continues to grow for us which is outstanding, which means we’re getting good information to federal employees about their retirement, and we can only do that with your help, so go ahead and take care of that while we’re reading the question from Bobby. Bobby writes in with an interesting question, and I’m a little confused by it sort of kind of fun to go through, and I’ll give a couple different answers, depending on what really the underlying question here is, and she writes and says, I have a question on life insurance coverage, I read that from the basic life insurance, retirement can be continued if all the conditions are met. One the conditions you have not converted coverage to an individual policy. My husband has insurance through company he retired from plus Medicare, and he wants me to drop off my insurance, how would it affect my coverage for insurance when I retire within a year? That’s a great question. Bobby. Thank you very much. Now, throws me for a little bit of a loop when you throw Medicare in there, because I heard the question was life insurance, and that kind of kind of draw a line in my mind, there’s life insurance here, there’s health insurance, and health insurance more dovetails with Medicare, so I’m going to give a couple different answers, to hopefully give you some some good information. On the life insurance side of the equation. No, you do not have to continue spousal coverage for FEGLI Federal Employee Group Life Insurance. Remember, you have your basic insurance, your extra basic if you’re under 45 years young, so your basic, give your extra basic, you have your options A, B, C, right? Then option A is additional coverage, about $10,000, option B, which is your multiple of your FEGLI rate, up to five times your basic plus up to five times coverage, and C is going to be for family, spouse and the kids can be added on there. Now those are different levels of the insurance, but it’s all your insurance, so if you wish to continue your FEGLI but you don’t wish to continue your spousal coverage, that option C, you can absolutely drop that, you could also reduce your FEGLI if it was something that was financially appropriate for you to do as well that does not affect you keeping your life insurance into retirement. Biggest thing is, don’t cancel your policy with FEGLI, because then that would jeopardize your ability to keep that into retirement, but you throw in that little curveball for me to make it a little fun, which talks about Medicare, so then I wonder if we’re conflating life insurance with health insurance, right? So let me talk a little bit about health insurance side of this equation. On the health insurance side, remember, your requirements are to give health insurance retirement, you have two must be in FEHB right, before for five years prior to your retirement, and you must retire with the eligibility of an immediate pension, you got to meet those two requirements. Your spouse also has to be two requirements, which is number one, which is they must be in FEHB before you pass away, and they must be eligible to receive a survivor pension, so those are those two sets of requirements for each of you. Now life insurance requirements have nothing to do with health insurance, so this is only a life insurance question then stop listening to the rest and you’re good to go, if this was about health insurance as well, then there’s a question about dropping him from coverage if he has something outside, I’m generally not a fan of dropping spouses from that FEHB Federal Employee Health Benefits coverage because it’s so good, it’s a great benefit, and God forbid, if you pass away, there’s no way he’s going to be able to get that back unless he’s his own retired federal employee, which is a different thing. So I would be really concerned about dropping the health insurance, and let me slightly concerned about dropping the life insurance. Life insurance, in my mind, is simple, it’s a math equation, you either need it or you don’t, God forbid, Bob, but if you pass away, what position does that leave your spouse in? Do they have enough financial assets to make sure they’re taken care of? If yes, you don’t need life insurance, if no, you need life insurance, and that’s the same on your spouse. That’s the approach that we take with clients, and it works out really, really well. So if you have questions like these about your federal benefits that get really unique and you want to make sure you’re taken care of, then reach out to our office, give us a call, sit down with one of our experts in these federal employee benefits that can really help you understand the great benefits you have and how to use those benefits when planning your retirement. Till next time, Happy Planning!