MEMO OF 7 JANUARY 1977 TO DDCI FROM D/PERSONNEL, SUBJECT: LIFE INSURANCE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80M00165A001200040040-4
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 19
• Document Creation Date: December 15, 2016
• Document Release Date: March 25, 2004
• Sequence Number: 40
• Publication Date: February 1, 1977
• Content Type: MF

Annroved For Rel a 2004/03/31 CIA-RDP80M00165AOQM00040040-4 ' 7,-?
1 February 1977
MEMORANDUM FOR: Director of Personnel
SUBJECT . : Memo of 7 January 1977 to J).1.DCL from
which the remedial measures contained therein are implemented.
have reviewed your response to MAG's memoraridurr. of 7 December
and it is returned herewith. MAG believes that it i_ ; responsive to
their concerns and.will continue to have an interest t.ri the extent to.
D/Personnel, Subject: Life.Insuran_ce
Mr. Knoche and the Management Advisory Group (TVU.3,.G)
B. G, Evans
Executive Secretary
Attachment
ES/. BCEvans:sfk
Distribution:
O -'Addressee via DDA
1-DDA
1 MAG w/copy of attachment
ER
1 MA?G Production File w/copy of attachment -anti basic
ER 77=6034 and 76-5847
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 Approved For Rele a 2004/03/31 : CIA-RD4 1%8 0040040-4 q 77
~.~ - C~o.4
7JAN 1077
DD/A Registry
MEMORANDUM FOR: Deputy Director of Central Intelligence
FROM F. W. M. Janney
Director of Personnel
VIA : Deputy Director for Administration
SUBJE.CT : Life Insurance
REFERENCE Memo to you from MAG, dtd 7 Dec 76,
same subject
1. This memorandum presents information with regard to
the referent Management Advisory Group (MAG) paper of 7 December
1976 on Life Insurance and indicates action being taken by the
Office of Personnel.
2. The referent MAG paper points out some disadvantages
of the Federal Employees Group Life Insurance ;(FEGLI) Program
for young employees, indicates the lower premiums of other term
insurance programs, suggests improvements in insurance presen-
tations made by the Office of Personnel and recommends that
affirmative action betaken to provide all present employees
with full information on available life insurance plans. We
agree that there are features of the FEGLI Program which must
be pointed out to employees and will indicate below action
already taken by the Civil Service Commission (CSC) and the
Agency in this .regard. There are some very necessary limita-
tions on the Agency's endorsement. or promotion of commercial,
programs of life.inSurance and these are also presented in
this.memorandum. Finally, we plan to improve our insurance
briefings and to make additional information available on life
insurance.through employee bulletins and Government Employees
Health Association (GEHA) publications.
3. The FEGLI Program was established by legislation in
1954 and is administered by the U. S. Civil Service Commission.
It is a-group plan of term insurance with a level premium
designed to provide life insurance over a full Government
career and into retirement. It is not intended as a substitute
for regular individual policies purchased by an m to ee through
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 .
. Approved For Rele 2004/03/31 : CIA-RDP80M00165A00UV0040040-4
an insurance agent. Over the past several years there has been
frequent mention in the media of the need for changes in the
FEGLI Program. For example, the attached article by Joseph
Young (Tab A) indicates that a complete overhaul of FEGLI will
be proposed in 1977.
4. In response to complaints similar to those raised by
MAG, the CSC issued Bulletin 870-13 on June 4, 1976 (Tab B) and
asked that it be brought to the attention of all new employees
.until such time as a new FEGLI pamphlet could be prepared.
This publication clearly states that FEGLI is not intended to
meet the insurance needs of all employees and that the level of
premiums in the early years of employment (younger employees)
exceeds the cost of the insurance protection. An extract of
the Bulletin was made and copies have since been given to
every new Agency clerical and professional employee (Tab Q.
In addition, the Bulletin was posted on our Official Bulletin
Boards. It is our intent to make a wide distribution of the
revised FEGLI pamphlet when it. becomes available.
5. With regard to other forms of life insurance, the
Civil Service Commission has consistently discouraged. Federal
agencies from taking any action which could be construed as
endorsement or support of commercial programs of life insurance,
whether offered as a "supplement" to or in lieu of FEGLI. An
individual employee's need for life insurance is considered
a private matter which only the employee can decide. If an
agency were to choose certain commercial life insurance pro-
grams to present to its employees, it would be obligated to
give equal time to all other insurance plans. As a result of
a general concern expressed by CSC on these matters, we dis-
continued, in early 1976, the mention of WAEPA in our insurance
briefings and publications. Since the United Benefit Life
Insurance Company (UBLIC) Program is offered through our
employee association, the CSC does not object to the presentation
of the Program to our employees.
6. While we do not agree with MAG that our Insurance
presentations are slanted to influence. the employee to purchase.
FEGLI insurance, we believe that there is room for improvement
in the quality of the briefings and are initiating action to
accomplish this. The MAG recommendation that the FEGLI and
UBLIC briefings be presented together by one briefer is a good
one and we will make this change. In view of the position
taken by CSC on commercial life insurance, we do not plan to
include WAEPA in our briefings.
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SUBJECT: Life Insurance
7. The final MAG recommendation is that affirmative action
be taken to provide all present employees with full information
on all three life insurance plans. Since the revised FEGLI
pamphlet is not yet available, we plan to issue an employee
notice containing pertinent information from CSC Bulletin-870-13.
We are also directing the Insurance Branch to prepare a GEHA
notice presenting the basic provisions, premium structure and
benefits of UBLIC life insurance. In view of the position taken
by the CSC in opposing any action taken by a Federal agency which
might be construed as an endorsement of commercial programs of
life insurance, we do not intend to publicize WAEPA or other
specific private insurance plans. We will instead continue to
encourage all employees to give serious thought and attention
to their own personal and family insurance needs.
F. W. M. Janney
Distribution:
0 - Addressee
,--r - ER
2 - DDA
1 - D/Pers
1 - C/PAB
2 - C/BSD (1 w/held)
O.P/BSD/ (7 Jan 77)
Approved For Release 2004/03/31 : CIA-RDP80M00165A001200040040-4
 Approved For Rele%yj
EDITED BY JOSEPH YOUNG
GOVERNMENT COLUMNIST -WASHINGTON (D.C.) STAR-
PUBLISHED IN WASHINGTON' D.C. DIRECTED TO FIELD PERSORMF
Vol. 26, No. 21
December 20,1976 Washin9ton,.1).C
Copyright ?1976 by FEDERAL EMPLOYEES' NEWS DIGEST, INC.
RESTORATION OF SICK LEAVE TAX BREAK SOUGHT-The national AFL: CIO and other segniients
organized labor will mount an intensive drive next year to have the new Congress. resf:orc sick leave is
benefits for American workers, including federal and postal employees.
With little notice, this year's massive tax revision law repealed the sick leave tgk exclusion benefits
up to $100 a week for employees who are off the job with illnesses of more than. 30 calendar days.
It received very little publicity in the media with the exception of the federal columns in the Wa.sbir
ton-papers, because it was lost in the welter of the many other controversial items ill the bill.
Consequently, most of the major unions in the private sector and their members were unaware ur,,
too late that the tax exclusion benefit had been taken away,
This sick leave tax break was regarded as one of the major fringe benefits available to A.rrreric
workers and its repeal has caused consternation and bitterness.
I. Consequently, the AFL-CIO as well as its affiliated unions including the federal and postal employ
groups, as well as other labor unions will seek. prompt action from the new Congress to restore the- si
leave tax exclusion benefit.
FEDERAL MATERNITY LEAVE UNAFFECTED-In another aspect of sick leave, Ckrll Service Com sign officials say the recent Supreme Court decision that private firms are not required to provide mat:
nity leave sick pay benefits to their women employees has no impact on the federal service. -
The officials say that the government's program of providing paid sick leave for maternity reasons V
continue. They point out that the Supreme Court decision did not bar employers from granting ;sick. iet
for pregnancy, but only said this was not required.
1 ' LIFE INSURANCE OVERHAUL MOVE--A complete overhaul of the government employee life, inssurar
system will be proposed to the new Carter administration next year.
Both the Civil Service Commission and the House Civil Service Retirement and Fmriployee Be.ne;
subcommittee feel the present benefits are woefully inadequate and outmoded.
The House unit held hearings on the subject earlier this year and the CSC agreed that substantial ]
eralizations are needed. The .Ford administration, however, declined to endorse increased. life inisural
benefits, citing budgetary considerations.
The prospects seem improved, however, for favorable action next year. = .6
The blue-ribbon Commission on Executive, Legislative and Judicial Salaries as part: of its study ree(
mended that federal employees receive life insurance policies double the amount of their salaries. At p ent most policies are equal to an employee's salary, plus S2,000.
The salary commission also said that the premiums federal workers pay for their life insurance co)
Q age is much too high.
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 _ YClq fY7F8:1!:.
WASHINGTON. D.C. 20415
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LIFE INSURANCE OFFICER INFORMATION BULLETIN
New employees must be given complete information about 11ie< Federal.
Employees Group Life Insurance Program if the employees are to make
informed decisions. Standard Form 176-A, the pamphlet titled, The
Federal Employees Group Life Insurance - Program, is being ,;evi; ed.
so that it better describes the Program. T'
Until this new edition is printed, all agencies most. make ccrt~ai n.
that new employees are aware of all aspects of the Program.- To assist.
agencies in informing new employees, we have issued, a CSC Bulletin"
This Bulletin, CSC Bulletin 870-13, contains information that. t.herc.
combined with the current edition of SF 176-A, gives?accuxata
information about the Program. Please ensure that all. employing
offices give the information in CSC Bulletin 870.13, as well as SF
176-A, , to all new employees. An advance copy of the Bull.etiin, i s
enclosed for your information.
Sincerely yours,
/ ~$ + 0-4..7
Thomas A. Tinsley
Director
THE MERIT SYSTEM-A GOOD INVESTMENT IN GOOD GOVERNMENT
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 . nitt'd States Civ11 St?rviu Commission CSC 3u11E'1in 870-13
proved For R6Wse 2004/03/31 : CIA-RDP80M00165AM200040040-4
liullriin No. 870- 13
SUBJECT: Federal Employees' Group Life Insurance: Life Insurance ?
Infornation for Employees
Heads of Departments and Independent Establishments:
Washington, D. C. 20-115
June 6, 197&
g
e
ou
In the meantime,'the following information s
new employees. This should be done when they enter on duty in the 3.nit5al inter`ejierr
1 d in the benefit session o the. employee.
ur
d
The Civil Service Commission is currently in the process of reviewing and revi F3.ng
Standard Form 176-A, the pamphlet containing information for employees about the
.Federal Employees' Group Life Insurance Program. our objectives are to be-t:ter.?
describe the regular and optional insurance programs, and to furnish to employeea
information that will help them make a decision on t.-tether' to eleaL or. waive
insurance coverage.
The time required to complete errangercents for its printing and distribstior,. to -GILL
agencies and their employees is something over which .re do. not have complete
control. We will have this done as soon as possible. Wher. the revised pamphlet is
available, destroy all supplies of the current edition (ddateddJune 19975). Under the
circumstances, we suggest that you do not order new supplies
ht toe the 176.
attention of at 1,
brou
ld b
h
all employees. It is a rou program in principles and canc~pts.
y
/. The Federal Employees' Group Life Insurance program is not t designed, to: is
it '-tended to meet the insurance needs af. each f.ndividusl e.~kl4y~ee or of
s
t an
existing insurance program, plans, and needs bon r s or g
The decision to elect or waive insurance cove..ag
should be based on the .employee's evaluation of hi-s or. her oars fii.tuat )turf .
U
d Ion range
e is a psersrnal_ riecis. orr. Fred.
participation in the re deral Employees' Group Life Insurance Arogrma i nc,t
compulsory,. it is voluntary.
g
a so
and benefit counseling session, an
orientation program. If possible, you should furnish these points in oral. and in
written form.
We also suggest that you comrunicete these points to all employees through ct use
of bulletin boards, employee newsletters, and say other app F ploy e
information channels.
Inquiries:
Code:
Bureau of Petiremrnt, Insurance, and Occupational health
61-24684 or code 101, extension 2463'4
$70, Life Insurance
Distribution: FEN Supplement 870-1 (advance edition limited)
Bu!Ietin Expires' tiarch 31, 1977
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 Gsc Bugp-prbva6F(W s422OO4/03/31 : CIA-RDP80MO0165A>!!!f'?200040040-4
One 'of the primary objectives of the Federal Employees' Group Life Insurance
"- ' Program is to attract and retain qualified employees in Coverrcrent service.
It is, therefore, designed primarily on the concept of providing group
insurance over a full career in Government. service and into reti-cement., Tn
keeping with this, the regular insurance program is furrded- by level.
iums
.. -;Providing sufficient assets to offset the deficiency in* the premiums From
it h d b accuaulatirg the excess of Premiums from
advances in.age.
?
a g
an .
t
exceed the cost of the insurance protection. The} are Lower
the insurance protection in the later years of e:nrloyment era the employee
The level premiums in the early years of employ,nent (younger. employees)
%_ V11
I. r'
.prov e
lifespar without ? the 'premium increasing, and eventually becoming prohih?-
?;itive,'as?age increases. - _'
older. persons , is xccorrr s. y
younger employees, and premiums from. those who leave the group. prematurely:
A level premium is the only arrangement under wh.i.ch it I-r possible to
I insurance protection to persons in the uppermost limit-- of t3ie bum an
'd
time' Lr ,? s ? ,.:.
Ehe,, level premiums alsoinclude an aunt seeded to cover the cos(: of the
continuatior_ of insurance coverage after retirement when payments of
premiumis are no. longer made. ? . ...5
~. ?p The :Pre:n~ens?'' are ; determnined, and periodically adjusted, based an Che
experience and cotnposition.of all persons participating in the pr_agram.
d value. experience rating, and level premiums are
7- . policies, or? programs. .
.. ?No cash. or., surren er s
typical of .group insurance plans. They. are also in keeping with group
tee rrti tnrt#vir`.ual Insurance
Raymond Jacobson
~. the present?regul2r insurance program is a comprortan which a f.m mmi i s to creel
?, ptne..of the insurance needs of the career employee over the entire period, of --
.?
retirement.
din
l
i
e
v
g
u
nc
ice,
r
his or?her s
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 Standard Form No. 176-A
June 1975
FPM 205 pleApproved For Rse 2004/03/31 : Cl
The
Federal
mployees
Group
Life
Insurance
Program
-RDP80 M 00165AMI 200040040-4
U. S. Civil Service Commission
Bureau of Retirement, Insurance, and
Occupational Health
Washington, D.C. 20415
Approved For Release 2004/03/31 : CIA-RDP80M00165AO01200040040-4
 Approved For Release 2004/03/31 : CIA-RDP80M00165AO01200040040-4
Dear Employee:
We encourage you to protect your
family against the loss of income
which would result from your death.
One way of partially replacing lost
income is through life insurance.
The Federal Employees Group Life
Insurance Program offers you regular
insurance in an amount which usually
is at least $2,000 more than your an-
nual base pay. This regular insurance
is a convenient, low-cost way to pro-
tect your family. If you want more
protection, you can buy an extra $10,-
000 of optional insurance.
Unless you waive regular insurance,
your coverage begins as soon as you
go to work for the Government if you
are not in an excluded position.
Unless you waive the regular insur-
ance, you have 31 days from the
date of your appointment to elect or
decline the optional Insurance on
Standard Form 176, which comes
with this pamphlet. Please study this
pamphlet carefully. Then fill out the
Standard Form 176 promptly and re-
turn it to your employing office.
If you do not waive the regular in-
surance, your employing office will
give you a certificate which outlines
the details of all the benefits and
terms of this insurance. You will get a
second certificate if you elect the op-
tional insurance.
Table of contents
General Information About the
Program
Who is Eligible __________________
1
Your Participation is Voluntary ____
1
Choices Available to You __-____-
1
How You Pay for Your Insurance -_
1
Nature of Your Insurance _------_
1
If you Waive or Decline
Insurance --------------------
1
Information About Regular Insurance
Amount of Your Regular Insurance
2
Cost of Your Regular Insurance
3
How You Get Regular Insurance
4
If You Do Not Want Regular Insur-
ance --------------------------
4
Information About Optional Insurance
Amount of Your Optional Insurance
4
Cost of Your Optional Insurance
4
How You Get Optional Insurance
5
If You Do Not Want Optional
Insurance --------------------
5
Information About Regular and Op-
tional Insurance
Accidental Death Protection -------
5
Dismemberment Protection ------
5
To Whom Insurance is Paid ------
5
Method of Payment ----------------
6
If You Go on Leave of Absence __
6
If You Leave Government Service_-
6
if You Retire from Government
Service ----------------------
Special Information for Employees
Who Previously Worked for the Fed-
eral Government ------------------ - 7
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 Approved For Rel6*46 2004/03/31 : C gDP80 l QO f 5AO04 00 0040-4
ormaxion
about the program
Who is eligible.-Nearly all Federal em-
ployees are eligible to participate in the
Federal Employees Group Life Insurance
Program. The main exceptions are those
who are excluded because of the nature of
their appointment (such as temporary em-
ployees) and noncitizens employed over-
seas. There are no age or health restric-
tions if you take the insurance the first
time you are eligible.
Your participation Is voluntary.-You
are encouraged to participate in the Fed-
eral Employees Group Life Insurance Pro-
gram, but whether you take any insurance
or not is entirely up to you. If you do take
insurance, you may cancel it at any time.
Choices available to you.-
? You may take the regular and the op-
tional insurance.
? You may take the regular insurance and
decline the optional insurance.
? You may waive the regular insurance
(which makes you ineligible for the op-
tional insurance).
How you pay for your insurance.-You
pay for the insurance through convenient
deductions from your pay. The insurance
cannot lapse because you forgot to pay the
premium.
Nature of your Insurance.-Neither reg-
ular or optional insurance has any cash
surrender or loan privileges and it cannot
be assigned to anyone before a loss oc-
curs.
If you waive or decline Insurance.-If
you waive the regular insurance or decline
the optional insurance, you cannot obtain
it for at least one year, and then only if you
are under age 50 and are certified by a
doctor to be in good health.
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 Informatlc~ nuuab0 Cost of your regu' insurance.-The
regular if fr5H or Rele!! 2004/03/31 : Co IA dRAQWQtVf Q01 8 4V* one-
third the cost of the regular insurance. You
Amount of your regular Insurance.- pay the other two-thirds. Your share of the
The amount of the regular insurance de- cost amounts to 351/2? biweekly for each
pends on your annual basic pay as fixed by $1,000 of your insurance. The following
law or regulation. The minimum amount is table shows exactly how much will be
$10,000; the maximum is $45,000. The fol- deducted from your pay for the regular
lowing table shows how much regular in- insurance:
surance an employee is entitled to based
on annual pay:
0
$8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
23,000
24,000
25,000
26,000
27,000
28,000
29,000
30,000
31,000
32,000
33,000
34,000
35,000
36,000
37,000
38,000
39,000
40,000
41,000
42,000
NOT MORE
THAN
$8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
23,000
24,000
25,000
26,000
27,000
28,000
29,000
30,000
31,000
32,000
33,000
34,000
35,000
36,000
37,000
38,000
39,000
40,000
41,000
42,000
AMOUNT
OF REGULAR
INSURANCE
$10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
19,000
20,000
21,000
22,000
23,000
24,000
25,000
26,000
27,000
28,000
29,000
30,000
31,000
32,000
33,000
34,000
35,000
36,000
37,000
38,000
39,000
40,000
41,000
42,000
43,000
44,000
45,000
AMOUNT
OF REGULAR
INSURANCE
$10,000
$3.55
$7.69
11,000
3.91
8.47
12,000
4.26
9.23
13,000
4.62
10.01
14,000
4.97
10.77
15,000
5.33
11.55
16,000
5.68
12.31
17,000
6.04
13.09
18,000
6.39
13.85
19,000
6.75
14.63
20,000
7.10
15.38
21,000
7.46
16.16
22,000
7.81
16.92
23,000
8.17
17.70
24,000
8.52
18.46
25,000
8.88
19.24
26,000
9.23
20.00
27,000
9.59
20.78
28,000
9.94
21.54
29,000
10.30
22.32
30,000
10.65
23.08
31,000
11.01
23.86
32,000
11.36
24.61
33,000
11.72
25.39
34,000
12.07
26.15
35,000
12.43
26.93
36,000
12.78
27.69
37,000
13.14
28.47
38,000
13.49
29.23
39,000
13.85
30.01
40,000
14.20
30.77
41,000
14.56
31.55
42,000
14.91
32.31
43,000
15.27
33.09
44,000
15.62
33.84
45,000
15.98
34.62
The deductions are a proportionate amount If you are paid weekly
or semimonthly.
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 Approved For Rele5e 2004/03/
How you get regular Insurance.-Your
regular insurance coverage begins auto-
matically on the day you start to work.
If you want regular and optional insur-
ance, you should mark an "X" in box A
on Standard Form 176. If you want only
regular insurance, mark an "X" in box B.
If you do not want regular insurance.-
If you do not want the regular insurance,
you must waive it by marking an "X" in
box C on Standard Form 176. This form
then should be returned to your employing
office during your first pay period in order
to avoid paying any deductions.
Information about
optional insurance
Amount of your optional insurance.-If
you have regular insurance, you may also
elect optional insurance in the amount of
$10,000. This $10,000 is in addition to
whatever amount of regular insurance you
have.
Cost of your optional insurance.-You
pay the full cost of the optional insurance.
The cost depends on your age, and in-
creases at ages 35, 40, 45, 50, 55 and 60.
For insurance purposes, however, you
reach these ages in January of the year
after your birthday.
DEDUCTIO
PERIOD F
OPTIONAL I
NS PER PAY
OR $10,000
NSURANCE'
Under age 35 ----------
$ .80
$1.73
Age 35 through 39 ----
1.20
2.60
Age 40 through 44 ----
1.90
4.12
Age 45 through 49
2.90
6.28
Age 50 through 54 -----
4.50
9.75
Age 55 through 59 ----
10.50
22.75
Age 60 and over ___-__
14.00
30.33
Deductions are a proportionate amount If you are paid weekly or
semimonthly.
The cost of the optional Insurance may Increase or decrease In future
years depending on the claim experience of all the insured employees.
1 : CIA-RDP80M00165A00WD0040040-4
How you get optional insurance.-If
you decide to take the optional insurance,
you must elect it. You elect the optional
insurance by completing Standard Form
176, marking an "X" in box A, and return-
ing the form to your employing office
within 31 days from the date you are ap-
pointed (or from the date you become
eligible). You have the optional insurance
on the day your employing office receives
your election if you are at work on that
day.
If you do not want optional insur-
ance.-If you decide that you do not want
the optional insurance, you must decline it.
You decline the optional insurance by
completing Standard Form 176, marking
an "X" in box B, and returning the form to
your employing office within 31 days from
the date you are appointed (or from the
date you become eligible). You can have
the regular insurance even if you decide
not to take the optional Insurance.
Information about regular
and optional insurance
Accidental death protection.-Both reg-
ular and optional insurance pay double
indemnity for accidental death.
Dismemberment protection.-Both reg-
ular and optional insurance pay certain
benefits for accidental loss of a hand or
foot or loss of eyesight in either one or
both eyes. This benefit is payable directly
to you.
To whom Insurance Is paid.-Upon
death, the regular and optional insurance
will be payable in the following order: (1)
your widow or widower; (2) if no widow or
widower, your children; (3) if no children,
your parent(s); (4) if no parent, your estate;
(5) if no estate, your next of kin. If you wish
it paid in some other way, you may desig-
nate one or more beneficiaries.
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 A roved F r ReI 2004/03/
Method' of p9?MrOen .-upon eat he
regular and optional insurance is payable
in a lump sum. The person entitled to
payment can, however, elect to receive
payment in installments under various in-
stallment options which may be available
at the time of settlement.
If you go on leave of absence.-The
regular and optional insurance continue
while you are on sick or annual leave with
pay. Generally, both will continue free for
up to 12 months should you go on leave
without pay. Unless you are granted mili-
tary leave with pay, insurance does not
continue while you are on active military
duty.
If you leave Government service.-If
you leave the Government service, you can
convert both the regular and optional life
insurance to an individual policy without
medical examination or other evidence of
good health.
If you retire from Government serv-
ice.-Both the regular and optional life
insurance may be continued after you re-
tire on immediate annuity either for disabil-
ity or after 12 years or more of service at
least 5 of which are civilian. In addition, for
it to be continued, you must have had the
optional Insurance for all of your service
during which it was available to you, or for
the 12 years of service immediately before
your retirement. The regular life insurance
is continued free but you must pay for the
optional life insurance until age 65 if you
retire before that age. When you are both
65 and retired, the optional life insurance
is also free.
When you retire at age 65 or over, or
when you.reach age 65 if you retire before
that age, both the regular and optional life
insurance reduce by 2 percent a month
until a reduction of 75 percent is reached.
Your double indemnity and dismember-
ment protection stops when you retire.
6
1 ' C pec ai informao iron or 0-4
employees who previously
worked for the federal
government
The information in this pamphlet is pri-
marily for new employees and those who
left the Government before February 14,
1968, and are now returning. The informa-
tion below is of special importance to em-
ployees who left Government employment
on or after February 14, 1968, and are now
returning to a job in which they are eligible
for insurance.
If you last worked for the Government on
or after February 14, 1968, in a position in
which you were not excluded from partici-
pation in the Federal Employees Group Life
Insurance Program you probably already
have a completed "Election, Declination, or
Waiver of Insurance Coverage" (Standard
Form 1.76) on file. That form remains in
effect, as follows:
? If you previously elected the optional
insurance, you will have both the op-
tional and regular insurance in your new
employment from the first day you are in
a duty and pay status unless you file a
declination or waiver with your employ-
ing office before the end of your first pay
period.
? If you previously declined the optional
insurance, your declination remains in
effect and you will have only the regular
insurance in your new employment. If
you also want the optional insurance,
see your employing office for informa-
tion on whether you are eligible to can-
cel your previous declination.
? If you previously waived the regular in-
surance, your waiver remains in effect
and you will have no insurance in your
new employment. If you want to be in-
sured, see your employing office for
information on whether you are eligible
to cancel your previous waiver.
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 ITA , $ 6r a $b0 ~4e Cq &Omo d4 & O 4fl04h64 following
information concerning the Federal Employees' Group Life Insurance (FEGLI)
be brought to the attention of all new employees:
Participation in the Federal Employees' Group Life Insurance Program is
not compulsory, it is voluntary.
The decision to elect or waive insurance coverage is a personal decision
and should be based on the employee's evaluation of his or her own situa-
tion, existing insurance program, plans, and needs both short and long range.
The Federal Employees? Group Life Insurance Program is not designed, nor
is it intended, to meet the insurance needs of each individual employee
or of all employees: It is a'gtdup program in principles and concepts.
One of the'primary objectives'of the Federal Employees' Group Life Insurance
Program is to attract and retain qualified employees in Government service,
It is, therefore, designed primarily on the concept of providing group
insurance over a full career in Government service and into retirement, In
keeping with, this, the regular insurance program is funded by Level premiums.
The level premiums in the early years of employment (younger employees)
exceed the cost of the'insurance protection. They are lower than-the cost
of the insurance protection in the' later years of employment as the employee
advances in ages
Providing sufficient assets to offset the deficiency in the premiums from
older persons is accomplished'by'accumulating the excess of premiums from
younger employees, and premiums from those who leave the group prematurely.
A level premium is the only arrangement under which it is possible to
provide insurance protection to persons in the uppermost limits of the human
lifespan without the premium increasing, and eventually becoming prohibitive,
as age increases.
The level premiums also include an amount needed to cover the cost of the
continuation. of insurance coverage after retirement when payments of
premiums are no longer made,'.
The premiums are determined, and periodically adjusted, based on the
experience and composition of all persons participating in the program,
The insurance has no cash value.'
No cash. or surrender value, experience rating, and level premiums are
typical of group insurance plans. They are also in keeping with group
insurance concepts and principles as opposed to individual insurance
policies: or programs. .
The present regular insurance program is a compromise which attempts to
meet some of the insurance needs of the career employee over the entire
period of his or her service,' including retirement.
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 IDiU43f1~bMbOSd'004004
Approved For'
PERS etc a _ _ _
7 December 1976
MEMORANDUM FOR: Deputy Director of Central Intelli-
gence
STAT FROM:
Chairman, Management Advisory Group
SUBJECT: Life insurance
1. The Federal Employees Group Life Insurance
Program (FEGLI), although subsidized by the govern-
ment, is far more expensive than other, unsubsidized,
group life insurance programs available to government
employees. FEGLI is more expensive because of its
generous treatment of retirees--their full insurance
coverage at retirement is continued free until age 65
and then at a reduced level, but still free, there-
after. This free coverage for retirees is paid for
by the federal subsidy and, necessarily, by seriously
overcharging young employees for their insurance
coverage. Since many of the people who enter on duty
in any given year will not stay around to retire,
particularly the clericals, they receive no benefit
for most of their insurance premium.
2. Under FEGLI, an employee pays $9.23 annually
per $1,000 of life insurance protection, regardless
of the employee's age. Other group life insurance
programs available to Agency employees (WAEPA and
UBLIC) scale their rates according to age, the employee
naturally paying more for his insurance as he grows
older. For example, WAEPA charges range from $1.70
per thousand for an employee under age 25 to $6.82
per thousand for an employee at age 60. Note however,
that even at age 60 FEGLI still is 35% more expensive
than WAEPA. And FEGLI is more expensive despite the
fact that the Federal Government is paying one-third
of its cost while contributing nothing to the cost
of WAEPA.
11~~il~atiitL~4ram ' ;si~ r
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3. To provide just one illustration of what
the above disparity translates into for the young
employee--a 22 year old with $15,000 coverage under
FEGLI would pay $138.45 annually. I. addition, the
Agency would pay $69.23, one-third of tie total cost
of $207.68. For the same coverage'under WAEPA, that
employee would pay an annual cost of $2-:;.50, th.e.
Agency would pay nothing.
4. Unless the 22 year old employe,-- cited in.
the illustration above is looking forward to free
life insurance after retirement, there is absolutely
no apparent reason for him to choose FE']LI over WAEPA.
Furthermore, declining FEGLI now probably, would not
cost him the free coverage after retire?ment. He can
join FEGLI later, anytime up to age 50 -o long as
he can pass a physical. Thus he could enjoy low
cost WAEPA coverage up to age 49, then join FEGLI and
receive free life insurance even if he retired only
one year later.
5. Despite the obvious advantages of WAEPA (or
UBLIC which is similar to WAEPA in rate and benefit
structure), the overwhelming majority of young entrants
on duty to the Agency who elect to purchase life
insurance choose FEGLI. MAG believes t'iis is
occuring because, during the processing--in period
when these decisions must be made, the new employee
is not being given an adequate explanation of the
life insurance options available to him
6. A MAG member attended the beneits briefings
recently given to one group of new emp1c'yees. The
FEGLI program was covered by one briefi:-gig officer,
while a second briefer covered UBL]:C along with other
insurance programs such as the Flight a::d Accident
policy, the Dread Diseases Plan and Income Replacement.
No literature on UBLIC was given to the new employees,
although it was explained that this was because the
rate structure had recently been revised and the new
brochure was not yet printed. WAEPA wa not mentioned
in either briefing. The cost and benefits of FEGLI
and UBLIC were not compared by either briefer. How-
ever, FEGLI features such as the free retirement in-
surance and free insurance during periods of leave
A p145. A .qri r t~~J ; y. rw v
If'l k~6~~11~3.dI. 4SgIIJ,%. Oa! ~W ~c3i~. Or .7~ ad4~a.1
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 Approved For Rele 2004/03/31 : CIA-RDP80M00165A0U0040040-4
7!1 j~AA~A9^1A .fir .F ' ~~11
of absence were highlighted. Also,_FEGLI was cast
as a fringe benefit, with mention that the goverment
paid part of the cost of this insurance. Each new
employee was provided with a Civil Service brochure
on FEGLI which encourages the purchase of FEGLI and
describes it as "a low-cost way to protect your
family."
7. The Office of Personnel provided JAG with
a randomly selected list of 24 employees who entered
on duty in September 197.6. MAG was able to contact
21 of these people and asked them whether or not they
had purchased one of the group life plans; if they
had, which one and why; and for their comments about
the insurance briefings they had received. Our find-
ings are summarized below:
a. Of the 21, 12 had taken FEGLI only, one'
had taken both FEGLI and UBLIC, one had taken
UBLIC only, and seven had taken no life insurance.
None had taken WAEPA.
b. The two who took UBLIC were both highly
critical of the insurance presentations they
had received during processing-in. On their
own, both sought information and advice else-"'
where and then decided to purchase UBLIC. Both
are officers, one an economist and one a systems
programmer, hired at the GS-11 and GS-12 levels.
c. Of those who took FEGLI, the reason
most often cited for choosing FEGLI was its
low cost. One thought that it was free,.' that
the government paid for it. At the suggestion
of the MAG member interviewing her, she checked
her pay slip and confirmed that she was indeed
paying the FEGLI insurance. .
d. Of the ten clerical employees contacted,
six were female, in their early 20's and without
dependents--the category for which FEGLI would
seem least appropriate. Nonetheless, four of
the six took FEGLI and the other two, one the
advice of their parents, took no life insurance.
None of them had any knowledge of WAEPA or
UBLIC.
MY ~,
AD A, . 11ei9u~l r~idrs~ a 1d? crs~v.3rJ`lA HL
~k1 .1
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Approv~~i 3
13 &.Hoa anti=37i1d. '~~ k
8. HAG concludes that the innsura ce presenta-
tions being made to new employees ax'e ina,decluate and
that they are slanted to influence the employee to
purchase FEGLI insurance, whether o ' nit this a_s- an
appropriate selection for the .individu