What is the Basic Insurance Amount and Why It Matters
Definition & meaning
The term "basic insurance amount" refers to a specific insurance coverage amount for employees under the Federal Employees' Group Life Insurance (FEGLI) program. It is defined as the greater of:
The employee's annual basic pay, rounded up to the nearest thousand dollars, plus an additional $2,000.
A minimum amount of $10,000.
For former employees who are still entitled to insurance coverage, the basic insurance amount is the amount that was applicable at the time their coverage ended.
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The basic insurance amount is primarily used in the context of federal employee benefits and insurance law. It is relevant for:
Understanding life insurance benefits for federal employees.
Determining coverage amounts for beneficiaries in the event of an employee's death.
Users can manage their insurance selections and changes through forms provided by US Legal Forms, which are drafted by legal professionals to ensure compliance with federal regulations.
Key Legal Elements
Real-World Examples
Here are a couple of examples of abatement:
Example 1: A federal employee with an annual salary of $52,000 would have a basic insurance amount calculated as follows:
Example 2: A former employee whose coverage ended with a basic insurance amount of $25,000 would retain that amount for their insurance benefits.
Relevant Laws & Statutes
The basic insurance amount is governed by the Federal Employees' Group Life Insurance Act, codified at 5 USCS §§ 8701 et seq. This statute outlines the provisions for life insurance coverage for federal employees.
Comparison with Related Terms
Term
Definition
Difference
Basic Insurance Amount
The minimum insurance coverage amount for federal employees.
Specific to federal employees under FEGLI.
Optional Insurance Amount
Additional insurance coverage that federal employees can elect to purchase.
Optional coverage beyond the basic insurance amount.
Common Misunderstandings
What to Do If This Term Applies to You
If you are a federal employee or a former employee, it is important to understand your basic insurance amount. You should:
Review your annual pay to determine your coverage amount.
Consult the US Legal Forms website for templates to manage your insurance selections.
Consider seeking professional legal assistance if you have questions about your specific situation.
Quick Facts
Attribute
Details
Minimum Coverage
$10,000
Calculation Basis
Annual basic pay, rounded to the next higher $1,000
Applicable Law
5 USCS §§ 8701 et seq.
Key Takeaways
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FAQs
It is the greater of the employee's annual salary rounded up to the nearest thousand plus $2,000, or $10,000.
Yes, it can change based on salary adjustments or if the employee's status changes.
You maintain the basic insurance amount that was applicable at the time your coverage ended.
