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FEGLI | Life Insurance as a Federal Employee

Written By Doug Mitchell

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA.  Doug has spent close to 30 years in the insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health.  Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

Holly Mitchell  &

Holly Mitchell’s background in life insurance insurance goes back to 1985 when she worked for her father who was a New York Life agent. Holly has a marketing degree from Auburn University and has had a life insurance license since 2008. In addition to advising life insurance for customers all around the country, Holly is our website fact checker.

Rob Pinner   &

Rob Pinner is the founder and CEO of Pinner Financial Services servicing all 50 states. Rob started his insurance career in 2002.

Louis LaBash

Results-driven and innovative life insurance professional with 30 plus years of life insurance industry sales and marketing experience. Recognized as a pioneer in the field, leveraging phone and internet channels to exceed personal sales of over $100 million during the first decade of the 21st century. Creator of a highly effective intuitive IUL life insurance sales software that facilitated the sale of millions of dollars of indexed universal policies by numerous life insurance agents. Proven track record as a Managing General Agent (MGA), Life Agent, IUL Life Insurance Sales Software developer, and leading-edge creator of insurance marketing tools, educational content, and delivery systems.

Table of Contents

Life insurance can be a tricky topic. Every person is different and is in different situations.

It’s almost impossible to make any statements or decisions that will apply to everyone.

It’s important that you have the insurance coverage that your family will need if something were to happen to you.

Many people assume that federal employees are automatically covered for life insurance through government programs.

This is only partially true, as these employees still need to make their own important decisions about their life insurance coverage.

If you are a federal employee, it is important to know what your options are so you can make the right life insurance choices for you and your loved ones.

Federal Employee Group Life Insurance [FEGLI]

This is actually the largest group life insurance program in the United States. And it covers more than four million federal employees.

The plans for Federal Employee Group Life Insurance, or FEGLI, come in three different options:

Basic Coverage, Option B, and Option C.

There are different amounts of coverage for each, and they are intended for different purposes.

Here’s a closer look:

FEGLI Basic Coverage

With basic FEGLI, you get life insurance protection that goes up to your base pay amount.

On top of that, you can get an additional $2,000. If your base pay is $50,000 a year, for example, you are eligible to get up to $52,000 in basic coverage.

It is also worth mentioning that with the basic coverage options, employees pay the same rates no matter their age.

However, those under the age of 35 get what is called an “Extra Free Benefit”. This means that their death benefit can be doubled at no extra cost to them.

At age 35 and over, however, this benefit is reduced annually by 10 percent until the employee turns 45 (at which point there will be no “Extra Free Benefit” left).

FEGLI Option B

This option is paid for entirely by you, the employee. Although its actual cost by the end will be more than what you pay now since it increases with age.

With it, you choose anywhere from between one and five times your base pay. Meaning if you earn $50,000 you are able to select one of the following coverage amounts:

$50,000, $100,000, $150,000, $200,000, or $250,000.

This option is best if you are interested in more coverage than what you would be able to get with basic. Although, you’ll have to consider the fact that you’ll be paying more for it.

FEGLI Option C

This third option is not actual life insurance coverage for you, but rather for your family members.

With it, you can get life insurance for your spouse or children under the age of 22, providing they are unmarried.

However, the coverage amounts for them are going to be a lot less than what you can get.

For your spouse, you can select between $5,000 and $25,000 in life insurance coverage. And for your children, you can get up to $12,500.

As with Option B, the rates you pay for Option C are also going to increase with age.

Converting FEGLI Policies

Once your group life insurance comes to an end, you are able to convert your FEGLI policy to an individual policy.

However, you can only do so within certain timeframes.

For example, if you are terminated, you have 60 days to convert your policy. After which you will no longer be able to do so.


To give you a better idea of what insurance rates are like with FEGLI, here is an example based on a real-life situation (you can easily do your own calculations on the FEGLI website):

Let’s say John is a 50-year-old federal employee who is currently making $50,000 a year.

Depending on which option he chooses with FEGLI, he gets the following:

  • Basic: $52,000 in coverage at $19.93 a month
  • Option B: $250,000 in coverage at $90.43 a month
  • Option C: $25,000 in coverage for spouse and $12,500 for children at another $10.20 added on per month

Now, if John is 55 or older, the cost of coverage spikes (as it does every five years).

Say he would be paying $100.23 total at age 50. At age 55, it would rise to $163.70 a month. At age 60, that would go up to $399.65.

Is FELGI The Best Option?

The truth is that you can often save money in the long run if you purchase an individual plan, particularly a term life insurance policy.

This will make it possible for you to lock in a certain amount of coverage for a long period of time without having to pay increasing rates.

For example, a 60-year-old federal employee could get $250,000 worth of coverage for only $62 a month for a locked-in 10-year term period. For 20 years, it would be around $113 a month.

It is true that everyone’s rates vary based on a number of factors like age, health condition, gender, etc. But overall, individual term life policies tend to be a lot cheaper than FEGLI. And they offer the same amounts of coverage.

There is nothing wrong with getting additional coverage through FEGLI. But in just about every case, it isn’t going to be the cheapest option.

There are several ways that you can save money on your insurance coverage.

Having life insurance is the best decision that you can make for your family.

You can’t put a price tag on the peace of mind that life insurance will give you.

FEGLI Life Insurance Alternatives

When you’re shopping for additional coverage to go with your FEGLI insurance plan, or you want an alternative, we can help guarantee that you’re getting the cheapest coverage on the market.

Making a few simple changes could help you keep hundreds of extra dollars in your pocket.

If you’re listed as a smoker on your insurance application, you can expect to pay much higher premiums, because you pose a greater risk to the insurance company.

If you like to smoke, you better like to pay a lot more for your life insurance.

Before the insurance company approves your application, you’ll have to take the medical exam, and the results are going to impact your premiums.

Better results, better premiums. Starting to get regular exercise and sticking to a healthy diet could save you hundreds of dollars.

If you want to save money, lace up those tennis shoes and hit the gym.

Unlike a traditional insurance agent, independent agents work with a handful of agencies.

Every insurance company is different, they all will give you different rates based on your specific situation.

Before you decide which company is best for you, it’s important that you get dozens of quotes.

Finding the perfect company could be the difference in getting an affordable plan or having a policy that breaks your bank every month.

Picture of Doug Mitchell, CLU

Doug Mitchell, CLU

Doug Mitchell, CLU holds a BA degree in Finance from Auburn University as well as having obtained a Chartered Life Underwriter (CLU) designation from The American College in Bryn Mahr, PA. Doug has spent close to 30 years in the life insurance and financial planning industry and has held licenses to sell securities, long-term care insurance, health. Some other notable items about Doug: Top of the Table Million Dollar Round Table member (MDRT). (MDRT is a global, independent association of the world’s leading life insurance advisors) | Premier Partner with Lincoln Financial and Cabinet Member | Served two years as President of the Auburn/Opelika Association of Financial Advisors | Life Millionaire status at Horace Mann Insurance Company and was awarded the Life Agent of the Year Award | New York Life, Executive Council Member | Currently serves as President of Ogletree Financial, a life insurance General Agency. | Doug is also a financial blogger addressing the topics of life insurance, annuities and retirement income planning.

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