The purpose of preparing this report is to provide you with the
information necessary to develop a clear understanding of your Federal
Employees Group Life Insurance and Government Retirement Benefits. This report is based on information you provided. Because of the potentially
high ultimate costs associated with your group term life insurance and
survivor's annuity, you will want to carefully consider your options
and any alternatives available to you.

On the following pages, you will find an illustrative summary along
with an explanation of your present program and your future retirement options. You will also find a comparative illustration which shows cost summaries of your present programs as well as an alternative plan.
For more detailed information on the alternative plan, a complete illustration of the plan benefits and costs is included.

The numbers provided on the following pages are estimates of some specific benefits provided to you as a Civil Servant and projected costs associated with these benefits. Since actual experience may differ from the assumptions, you should not base your financial decisions solely on the estimates produced by this analysis. Any liability from the use/misuse of this analysis is expressly disclaimed.

YOUR FEDERAL EMPLOYEES GROUP LIFE INSURANCE (FEGLI)

Federal Employee Group Life Insurance (FEGLI) is a group term life
insurance program that offers you a Basic amount of insurance along with
a choice of three optional coverage's. The Basic insurance amount is
equal to your salary rounded up to next higher $1,000 plus $2,000. If
you are under the age of 45, an extra amount of Basic coverage is
included which initially can amount up to 100% of the Basic Insurance.
This Extra Benefit is provided without direct cost to you but reduces to
zero by age 45.

In addition to the Basic coverage, you may select Option A, Option
B, and/or Option C. Option A provides an additional $10,000 of insurance
coverage. Option B allows you to choose additional insurance in
multiples (up to 5) of your current salary (rounded to the next $1,000).
Option C is the family option that provides units of $5,000 coverage
on your spouse and $2,500 on your eligible children. Up to 5 units of
Option C can be purchased at time of employment or during open
enrollment.

The cost of the Basic insurance is shared by your employing agency,
while the premium of any additional coverage is paid fully by you.
(Note: Basic insurance is provided to postal employees without cost.)

Your Basic insurance coverage remains level after age 45 (except for
additions due to salary increases) until age 65 or retirement, whichever
is later. At that time, you may (1) pay premiums for level or reduced
coverage; or (2) cease payment of premiums. If you elect to cease
payments, your coverage will decrease at a rate of 2% per month until
25% of the amount you had at retirement is reached.

At age 65, the default options for A-Standard, B-Additional, and
C-Family will cause coverage to reduce. Alternative elections are now
available. Refer to the following pages for options and premium
calculations. Your election at retirement will effect the ultimate
level of coverage in future years.

The next page illustrates your coverage's and premiums and how they
will vary with time. This illustration is based on information you
provided previously. Please take note of the ultimate high cost of
coverage in the later years and the lack of any cash buildup or equity
within this insurance program.

THE AVERAGE COST OVER THE NEXT 24 YEARS IS $127 PER MONTH AND $1,529 PER YEAR.

OPTIONS AT RETIREMENT

Basic: At retirement you must elect post-retirement coverage:
(1) 75% reduction, and pay $.3358 per thousand per month to age 65
and $0 after age 65.
(2) 50% reduction, and pay $.9258 per thousand per month to age 65
and $.59 per thousand after age 65. Coverage of $43,000 would
reduce to $21,500 at a cost of $25.37 per month.
(3) No reduction, and pay $2.3758 per thousand per month to age 65
and $2.04 per thousand after age 65. Coverage of $43,000 would
cost $87.72 per month after age 65.

Opt.B: At retirement you must elect post-retirement coverage:

(1) Full Reduction, you must continue to pay for coverage to age 65, at
that time premiums are discontinued. Coverage will decrease 2% per
month for 50 consecutive months until coverage terminates.
(2) Maintain coverage into retirement, not to exceed amount elected while
employed, at a rate of $1.52/thousand per month from 60 to 64,
$1.95/thousand per month from 65 to 69, and $3.03/thousand per month
from age 70 and over.

(60-64) Coverage of $190,000 would cost $288.80 per month.
(65-69) Coverage of $205,000 would cost $399.75 per month.
(70 & Over) Coverage of $205,000 would cost $621.15 per month.

Opt.C: At retirement you must elect post-retirement coverage:

(1) Full Reduction, you must continue to pay for coverage to age 65, at
that time premiums are discontinued. Coverage will decrease 2% per
month for 50 consecutive months until coverage terminates.

(2) Maintain coverage into retirement, not to exceed amount elected
while employed, at a rate of $5.63/unit per month from 60 to 64,
$6.50/unit per month from 65 to 69, and $7.37/unit per month from
age 70 and over.

(60-64) Coverage of 5 units would cost $28.15 per month.
(65-69) Coverage of 5 units would cost $32.50 per month.
(70 & Over) Coverage of 5 units would cost $36.85 per month.

- - - - - - - - - - Option A Insurance - - - - - - - - - -
- - - - - - - - - - Option B Insurance - - - - - - - - - -
- - - - - - - - - - Option C Insurance - - - - - - - - - -