Life insurance for federal employees starts with FEGLI, the Federal Employees’ Group Life Insurance program. FEGLI offers Basic coverage plus three optional tiers, but premiums rise with age and coverage decreases in retirement. Many federal employees find that supplementing FEGLI with an individual term life policy gives them more coverage at a locked-in rate.
More than 4 million federal employees and retirees are covered by the Federal Employees’ Group Life Insurance program. That makes FEGLI the largest group life insurance program in the world.
But here’s what most federal employees don’t realize: FEGLI is a solid starting point, not a complete plan. The coverage you have today may look very different by the time you retire. Premiums go up. Benefits go down. And the options you don’t choose now could cost you later.
If you’re a federal employee trying to figure out the best life insurance strategy, this guide breaks down exactly how FEGLI works, what it costs, and when you might want something more.
What Is FEGLI?
FEGLI stands for Federal Employees’ Group Life Insurance. Congress created the program in 1954, and it’s administered by the Office of Personnel Management (OPM). MetLife underwrites the coverage through its administrative office, OFEGLI.
If you’re in a FEGLI-eligible position, you’re automatically enrolled in Basic coverage on your first day unless you waive it. You don’t need a medical exam to get Basic coverage, which makes it one of the easiest ways for federal employees to get life insurance right away.
FEGLI is a group term life insurance program. That means it has no cash value, no loan options, and no investment component. It’s pure protection, designed to provide a death benefit if something happens to you.
FEGLI Coverage Options
FEGLI offers four tiers of coverage. You must have Basic coverage to elect any of the optional tiers.
Basic Coverage
Basic life insurance equals your annual base pay, rounded up to the next $1,000, plus an extra $2,000. So if you earn $65,000 a year, your Basic coverage would be $67,000.
Employees age 35 and under also get a bonus called the Extra Benefit. This doubles your Basic coverage at no additional cost. Starting on your 36th birthday, the Extra Benefit decreases by 10% each year until it disappears completely at age 45.
The government pays about one-third of your Basic premium. You pay the remaining two-thirds.
Option A (Standard)
Option A adds a flat $10,000 of additional coverage. You pay the full cost, and the rate increases as you move into higher age bands. After age 65, Option A coverage begins to reduce and eventually becomes free at a reduced amount.
Option B (Additional)
Option B lets you choose one to five times your annual base pay in extra coverage. This gives you the most flexibility if you want higher coverage amounts.
You pay the full cost, and premiums increase every five years as you enter a new age band. There’s no government contribution toward Option B.
Option C (Family)
Option C covers your spouse and eligible dependent children. You can select one to five multiples of coverage. Each multiple provides $5,000 for your spouse and $2,500 for each eligible child.
Children must be unmarried and under age 22 to qualify. You pay the full cost, and like Option B, rates go up with age.
How FEGLI Costs Work
One of the biggest things to understand about FEGLI is how pricing changes over time.
Basic coverage uses a flat rate per $1,000 of coverage. Every employee pays the same amount regardless of age. That’s a nice perk for older workers, but it also means younger employees may be overpaying compared to what they’d get on the private market.
Optional coverage works differently. Options A, B, and C all use age-banded pricing. Your premiums increase every five years starting at age 35. The jumps get steeper as you get older, especially after 50.
This is where many federal employees get caught off guard. Coverage that seems affordable in your 30s and 40s can become a significant expense by retirement age. OPM adjusts rates periodically based on claims experience, and recent adjustments have pushed premiums higher across multiple age bands. You can estimate your own costs using the official FEGLI Calculator on OPM.gov.
What Happens to FEGLI in Retirement
You can keep your FEGLI coverage into retirement, but it won’t look the same as it did during your career.
For Basic coverage, you’ll choose one of three reduction options at retirement or age 65, whichever comes later:
75% Reduction: Your coverage decreases by 2% per month until it reaches 25% of the original amount. After that, it’s free.
50% Reduction: Coverage decreases by 1% per month until it reaches 50% of the original amount. You continue paying premiums.
No Reduction: Coverage stays the same, but you keep paying premiums that increase with age.
Option A coverage automatically reduces after 65 and eventually becomes free at 25% of its original value. Option B and Option C have their own reduction schedules, and both can become expensive to maintain in retirement.
This is one of the biggest reasons federal employees look beyond FEGLI. The coverage you counted on during your career may shrink significantly, right when your family might need it most.
FEGLI Conversion Rights
If you leave federal service or become ineligible for FEGLI, you get 31 days of free coverage after your separation date. During that time, you can begin the process of converting your group coverage to an individual policy.
The conversion deadline is the sooner of 31 days after receiving your conversion notice (SF 2819) or 60 days after your separation date. Once that window closes, you lose the option.
There’s an important catch. You can only convert FEGLI to a whole life policy, not term insurance. Whole life premiums are typically much higher than term rates, which means the converted policy will cost significantly more than what you’d find on the open market. That’s why it’s smart to explore options like no medical exam life insurance before you leave federal service, while you still have time to qualify for better rates based on your health.
Why Federal Employees May Need More Than FEGLI
FEGLI does a good job of providing baseline protection. The automatic enrollment, no medical exam for Basic, and government cost-sharing make it a valuable benefit.
But there are real limitations worth considering.
FEGLI premiums rise with age while your coverage shrinks in retirement. You can’t customize your policy the way you can with an individual plan. And if you leave federal service, your conversion options are limited and expensive.
An individual term life insurance policy can fill those gaps. With term life, you lock in a rate that stays the same for the entire term, whether that’s 10, 20, or 30 years. Your coverage amount doesn’t decrease. And you own the policy, so it goes with you no matter where you work.
Many federal employees find that keeping FEGLI Basic (with its government subsidy) and adding a private term life policy gives them the best combination of coverage and value. You get the convenience of FEGLI plus the stability and portability of your own policy.
Frequently Asked Questions
Is FEGLI the same as regular life insurance?
FEGLI is group term life insurance provided through the federal government. It works like other group policies, but with its own rules for coverage amounts, pricing, and retirement reductions. It’s not the same as an individual life insurance policy you’d buy on your own.
Can I have both FEGLI and a private life insurance policy?
Yes. Many federal employees keep their FEGLI Basic coverage and add a separate term life insurance policy for additional protection. There’s no rule against having both.
What happens to my FEGLI if I get fired or laid off?
You get 31 days of free coverage after your separation date. During that window, you can convert your FEGLI to an individual whole life policy without a medical exam. After that window closes, you lose the option to convert. That’s why it’s a good idea to have individual coverage in place before leaving federal service.
Do I need a medical exam to get FEGLI?
No. Basic coverage is automatic with no medical underwriting. Optional coverage also doesn’t require an exam if you elect it within your first eligible period. If you waive coverage and want to enroll later, you may need to provide medical documentation and pass a review by OFEGLI.
Does FEGLI cover my spouse?
Yes, through Option C. Each multiple of Option C provides $5,000 of coverage for your spouse and $2,500 for each eligible dependent child. You can elect one to five multiples of coverage.
Key Takeaways
- FEGLI is the largest group life insurance program in the world, covering over 4 million federal employees and retirees.
- The program offers four coverage tiers: Basic, Option A, Option B, and Option C.
- Basic coverage comes with a government subsidy and no medical exam requirement.
- Optional coverage premiums increase every five years by age band, with steep jumps after age 50.
- FEGLI coverage reduces significantly in retirement, depending on which reduction option you choose.
- You can only convert FEGLI to a whole life policy after leaving federal service, and the window is limited.
- Many federal employees benefit from supplementing FEGLI Basic with a private term life policy for stable, portable coverage.
If you’re a federal employee wondering whether FEGLI is enough, we can help you compare your options. Give us a call at 800-712-8519 or use the quote tool on this page to see what individual term life coverage would cost based on your age and health.
