FEGLI – Federal Employees’ Group Life Insurance


On August 29, 1954, the Federal Government sanctioned and established the Federal Employees’ Life Insurance Program which is commonly referred to as FEGLI. Since then, the FEGLI program has become the largest group life insurance program and is covering more than 4 million employees and retirees of the Federal Government, as well as most of their family members.

Since FEGLI is a guarantee issue group life plan, chances are you may be able to finder cheaper term life insurance coverage through one of the life insurance companies that we represent such as:

All it takes is about 20 seconds to compare your rates with our life insurance calculator.

FEGLI Insurance Rates

In most cases, whenever a new employee is hired by the Federal Government, they immediately become eligible to receive FEGLI benefits. FEGLI is a group life insurance program that offers only term life insurance which means the policies do not build cash value or have any paid-up value. The FEGLI program is made up of Basic life insurance and also provides three optional coverages that employees can choose to purchase.

New Federal employees are automatically enrolled in the Basic life insurance program and the payroll department will deduct the employee’s share of the premium from each paycheck. There is no medical exam required to enroll in FEGLI.  Federal employees can, however, opt out or waive the coverage if they prefer not to purchase it but they must carry the Basic coverage in order to purchase any of the optional coverages and the optional coverages are not automatic.

The cost for the Basic insurance is divided between the employee and the government. The monthly premiums are divided so the employee pays two-thirds of the cost and the government pays the remaining third. Unlike traditional life insurance, the age of the employee does not impact the cost of the Basic coverage but it will impact any additional coverage that you elect to purchase.

If you are young and healthy, private term life insurance may be a cheaper option for you.   If you are healthy and 35 years old, why would you want to pay the same life insurance rates as a 55 year old.

So FEGLI has the same rates for every one no matter their health condition.  This is a great deal for you if you are uninsurable or have a health impairment such as diabetes, high blood pressure, high cholesterol, heart disease or cancer.

All FEGLI insurance claims are processed by the Office of Federal Employees’ Group Life Insurance (OFEGLI) which is a private organization under contract with the Federal government.



Typically, when you are offered and then accept your first federal civilian position, you are automatically enrolled in the FEGLI basic plan unless you decline coverage, but not many employees do that.

Your Basic insurance face amount will be equal to your yearly base salary and the rounded up to the next $1,000 and then an additional $2,000 is added to that. Here is an example:

Michael Jones’ basic salary when hired is $31,265. That number is then rounded up to $32,000 and then an additional $2,000 is added for a total coverage amount of $34,000.

In this example, Michael Jones’ would pay $5.10 bi-weekly and the Federal government would be responsible for the balance.

If, however, the employee is under the age of 45, the amount of life insurance coverage is increased at no additional cost to the employee. If an employee is 35 or younger the coverage is doubled, but beginning at age 36 the multiplier used to calculate your increase in coverage goes down by 10% per year until it is exhausted at age 45.

Additionally, the employee’s Basic coverage includes accidental death and dismemberment coverage (AD&D). The AD&D coverage pays the total of your Basic coverage amount if you die or lose at least two body parts as a result of an accident. The AD&D will also pay 50% of the Basic coverage amount if you lose one body part. Any either case, if you die as a resulting of an accident, the death benefit is paid to your beneficiary, If you lose one or more body parts and do not die, the benefit will be paid to you.

The accidental death and dismemberment coverage will not go down as long as you are employed but it will, however, stop when you decide to retire.

FEGLI Basic Coverage and Retirement

FEGLI allows employees to continue their coverage into retirement as long as you enrolled in the program when you were initially hired or you enrolled and had coverage for five consecutive years before you take retirement.

When you are ready to retire and you are eligible to keep your FEGLI Basic coverage, you will have an important decision to make:

  1. Do you want to continue with the same coverage amount?
  2. You can let the coverage decline to half of what you have at retirement.
  3. You can let the coverage decline to 25% of what you have at retirement

If you select #3 (25%), your premiums will stop at age 65 but your coverage will decrease by 2% per month until it finally it’s the 25% level. If you choose #2 (50%), your coverage would be decreased by only 1% each month until it reaches half of the original value. If you choose to continue with your original coverage, your premiums would go up significantly.

It’s important that you update your beneficiary information as needed using Form 2823 because the person designated will be sent the death benefit from your insurance policy.

FEGLI Option A

FEGLI Option A gives anyone who is covered under Basic insurance the option to purchase an additional $10,000 in life insurance coverage. The premiums for Option A depend on your age when you elect to purchase the additional coverage. Once you retire or reach age 65, you no longer have to pay premiums but your insurance coverage will be decreased by 2% each month until it reaches 25% of the face amount or $2,500.

It’s important to remember that the Option A coverage is not automatic so you will have to submit Standard Form 2817 to enroll in this coverage All of the life insurance forms can be downloaded from the OPM website.

FEGLI Option B

FEGLI Option B enables the employee to purchase additional life insurance as long as they are enrolled in the Basic Insurance program. Employees are allowed to purchase allowed to purchase from one to five times their basic annual salary rounded up to the next $1,000. This additional coverage enables the employee to carry a more reasonable amount of life insurance which would enable surviving loved ones to deal with the loss of income when you die. Unlike the Basic coverage, the rates for Option B coverage are age-based.

The Option B insurance premium starts out as an excellent rate at only 2 cents per $1,000 of coverage per pay period. But if you elect to keep the full benefit at retirement, your premiums increase substantially and for many retirees unaffordable.

When you are ready to retire, you have the choice of a full reduction of coverage or no reduction of coverage. If you elect the full reduction option, your insurance premiums will cease and then your coverage will be reduced by 2% each month for 50 months and is exhausted. The reduction begins shortly after you turn 65 or at retirement whichever happens later.

It’s important to note that the employee’s insurance rates increase dramatically once they turn 50 and that if they are in average health can purchase term insurance in the private marketplace much cheaper than their premiums are at age 55 and higher.

FEGLI Option C

The FEGLI Option C coverage allows the Federal employee to add his or her family members to their FEGLI insurance plan. When you choose Option C, all of your family members are insured under the program automatically.

The amount of coverage you choose is provided in multiples of $5,000 for your spouse, and $2,500 for eligible children. You can select multiples of one to five for your spouse and children. You cannot elect a multiple for your spouse and then a different multiple for your children. For example, if you elect a multiple of five for your spouse (5 X $5,000) then you must select a multiple of five (5 X $2,500) for your eligible children.

The life insurance for your children is for all of your eligible children and is the same premium if you have two children or six children. Eligible children must be dependent on you, unmarried, and under age 22. Dependent children older than 22 qualify if they are incapable of supporting themselves. A dependent child can be a biological child, adopted child, foster child, and stepchild. Grandchildren are eligible only if they meet the requirements of a foster child.

The rates for Option C life insurance depends on the employee’s age and the multiples they choose for their spouse and children but will increase each time you enter a new age group. The age groups premiums begin at age 35 and last for five years each.

Here is an example of an employee’s cost per pay period (bi-weekly) that has chosen a multiple of five ($25,000) for his or her spouse and a multiple of five for his or her children ($12,500). Remember all children are covered.

Age GroupCost of Coverage per Pay Period
Under 35$1.10
35 through 39$1.35
40 through 44$2.05
45 through 49$2.95
50 through 54$4.60
55 through 59$7.40
60 through 64$13.50
65 through 69$15.70
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Using the FEGLI Calculator

One of the great things that help with the decision-making process for FEGLI life insurance is the FEGLI calculator. The FEGLI calculator which can be found online helps the Federal employee to decide on whether each Optional coverage would be appropriate for the employee’s circumstances and calculates the employee’s cost of insurance down to the penny.

The calculator allows the federal employee to calculate each coverage and its cost over time and it also provides the information needed to make appropriate coverage decisions for retirement. The calculator was designed to allow employees to calculate the following coverage amounts and the cost to the employee in a quick and simple manner. With this calculator, the employee can calculate the following:

  • The cost for FEGLI Basic coverage and the employee’s share of the premium per pay period (bi-weekly or monthly). The only information the employee is required to enter is their age and annual basic pay.
  • Provides a Summary Report that you can share with others if needed.
  • Provides an Enrollee Detailed Report that breaks down the coverages and associated costs to the enrollee by Options selected.
  • Detailed information for Basic Insurance with the coverage and premium changes as the employee ages.
  • Complete information for Option A showing the cost of coverage per pay period as the employee ages into the next age group.
  • Illustrates the cost of coverage for Option B (additional coverage) based on the multiple selected as the employee ages into each age group.
  • Illustrates the Accidental Death and Dismemberment (AD&D) coverage amounts for accidental death and the loss the two hands, feet, or eyes, or one of each.
  • Option C Family coverage – provides details of coverage and eligibility along with the costs per pay period as the employee ages into each age group.

FEGLI Calculator – Calulate Coverage for Retirement

The last screen in the FEGLI calculator allows the employee to determine what will happen to his or her benefits and the associated cost to the employee after retirement. This portion of the calculator is very valuable because it can help employees make important decisions years before retirement rather than waiting until the last minute.

This is also the place where an independent insurance agent who is very familiar with the FEGLI system can become an advocate for the employee. FEGLI offer competitive rates on term insurance while the employee is younger but what happens at age 55 can be very upsetting when you realize how much your insurance costs have ballooned for the coverage you selected.

Option B can quickly become unaffordable at age 55 or 60 so it’s important that a change is made as early as age 50 while the employee is hopefully still in good health. Traditional term life insurance from a private insurer is far less than what an employee will pay for coverage in the later years under FEGLI.

An experienced and reputable insurance professional who is familiar with the pitfalls in FEGLI at retirement can be a lifesaver when it comes to reducing your cost of life insurance by shopping your individual insurance needs with all of the top-rated term life insurance carriers in the marketplace.

For more information about your FEGLI Benefits and to get more information about how you can purchase term life insurance in the private market in order to save thousands of dollars during your retirement, call InsuranceQuotes2Day at (800) 712-8519 during normal business hours or contact us through our website and your convenience.