Federal Employees Group Life Insurance (FEGLI) Options
Federal Employees Group Life Insurance (FEGLI) provides group term life
insurance. The term policies don't build cash or paid-up value. FEGLI coverage
consists of Basic life insurance with three forms of Optional insurance available.
Employees must be careful to select affordable coverage when they retire
and before making a retirement election understand what is available
and how much you will have to pay month for the coverage you desire.
The cost of Option B multiple coverage, if
maintained in retirement, becomes very expensive and increases with age.
See the example listed below under
Option B coverage for details. You must
carry Basic insurance to elect any of the three options. Unlike Basic,
enrollment the optional insurance is voluntary -- you must apply for and select the options
you desire. Evaluate your insurance
needs to determine how much coverage to maintain when you retire.
Government shares the cost of Basic insurance with you. The Government
pays 1/3 and You pay
2/3 of the total cost. Your Basic insurance isn't affected by your age. However,
you must pay the total cost of any Optional insurance that you elect and the
cost is determined by your age and gets very expensive especially after age 55.
The Office of Federal Employees' Group Life Insurance (OFEGLI), a
private entity under contract with the Federal Government, processes and pays
claims under the FEGLI Program. Beneficiaries must submit a claim to the
OFEGLI to collect on the policy. Survivors can call them at
1-800-633-4542 to follow-up on submitted claims. See the
Survivor's page for additional reporting procedures.
The annuitant costs for all options are listed on our
Annuitant's FEGLI Rate page.
rates are listed separately. You can
elect to keep full coverage, 50% reduction or 75% reduction for Basic coverage. The reductions
don't start until you reach age 65 and with the 75% reduction you pay nothing
from age 65 on. The SF-2801 form also lists
everything you will need to know before making your selection.
I canceled Option A, B, and C coverage in my 50s since our children were
grown and we had additional private insurance. Option B FEGLI multiples
become very expense as you age and you can generally find lower cost term
insurance policies from other insurance companies. I only had Basic coverage
when I retired and elected the 75% reduction. When I turn 65 I pay nothing and
my coverage decreases to 25% of my full coverage over a period of
approximately 37 months. Between
my FEGLI Basic reduced amount and my private insurance there will be
sufficient coverage for my family's needs. Basic FEGLI coverage costs doesn't
increase with age like the other options do. Currently annuitants pay 32.5
cents per $1,000 of Basic insurance before age 65, nothing after age 65 if you
elect the 75% reduction, 64 cents per $1,000 of coverage if you elect the
50% reduction, and $1.94 per $1,000 of coverage for no reduction.
Dennis V. Damp, Retired FAA
Before you make an election I suggest that you review
your estate first. An excellent resource for this is
"Plan Your Estate." This book will help
you evaluate your personal situation and this evaluation will help you determine
how much insurance you will need in retirement.
Eligible employees are automatically enrolled in Basic insurance unless
they refuse coverage. Basic insurance covers your life for whichever is
1) Your annual rate of basic pay, rounded up to the next even $1,000, plus
This is called the Basic Insurance Amount (BIA). The Federal Government pays
one-third of the premiums for Basic coverage and the employee or annuitant
pays two-thirds. Employees and annuitants with the U.S. Postal Service pays
nothing for Basic coverage, the USPS picks up the tab.
If you are under age 45, you automatically have extra coverage without
paying any additional premium. This Extra Benefit increases the amount of
Basic insurance payable at the time of your death if you die before age 45.
Option A Coverage
Option A Standard Insurance is a fixed $10,000 amount when you retire
and it reduces 2% a month, $200, starting at age 65 until is reduces to
$2,500. It is free starting at age 65 however the cost of the coverage
adjusts for your age. You can review the rates
to see if it is worth while
to retain in retirement. From Age 60 to 64 the rate is currently $13 a
month for $10,000 of insurance.
The amount of coverage is determined by multiplying your final annual
basic pay rate rounded to the next higher thousand by the number of Option B
multiples that were in effect for the five years of service immediately
before your retirement or the entire periods of service during which these
multiples were available to you, if less than five years. Each multiple
equals your annual rate of basic pay (after rounding up to the nearest
$1,000). You can have a maximum of 5 multiples of your base salary.
When you retire you elect either a full reduction benefit or no
reduction. If you elect full reduction your multiple coverage will stay in
force until you reach age 65. At age 65 the premiums stop and your coverage
reduces 2% a month for 50 months when coverage ends. No reduction premiums
are very high. For example, if you base pay was $60,000 when you retired and
you elected 5 multiples, your total coverage would be $300,000, 5 x $60,000.
Premiums continue after age 65 and the current premiums are $1.343 per
thousand dollars of coverage. In this example the annuitant would be paying
$402.90 per month to retain this coverage. From age 70 to 74 the premiums
increase to $2.47 and the monthly premium would increase to $741 per month.
Premiums increase again to $3.90 per thousand from age 75 to 79, and top out
at $5.20 from age 80 on. At age 80 the annuitant would be paying $1560 a
month at current premium levels. It should be noted that premiums are
subject to change. View the FEGLI rate charts
for the new rates.
Option C Coverage (Family)
Family coverage includes $5,000 for a spouse and $2,500 for each child
under age 22 in your household. You can elect up to 5 multiples and the
premiums adjust as you age. When you retire you elect either a full
reduction benefit or no reduction. If you elect full reduction your multiple
coverage will stay in force until you reach age 65. At age 65 the premiums
stop and your coverage reduces 2% a month for 50 months when coverage ends.
The premium costs per multiple ranges from 48 cents per multiple at age 35
to $14.30 per multiple from age 80 and up. If you don't have private
insurance for your spouse this coverage will fill the gap. Three multiples
would cost a person between the ages of 60 to 64 $17.55 a month ($5.85 per
multiple) for $15,000 in coverage. From 65 to 69 the cost increases to
We all hope we will never need to use this option but if you do you can
elect to receive a lump sum FEGLI insurance payout if you are diagnosed to
be terminally ill and have a documented medical prognosis showing a life
expectancy of no more than nine months. Employees, annuitants, or
compensationers enrolled in the FEGLI Program are eligible to elect a Living
Employees can choose a full or partial (a multiple of $1,000) Living
Benefit while annuitants and compensationers are limited to electing a full
Living Benefit. Living Benefits are equal to the
Basic Life insurance amount,
plus any extra benefit for persons under age 45, that would be in effect
nine months after the date of the Office of Federal Employees' Group Life
Insurance (OFEGLI) receives a completed claim for Living Benefits form. The
OFEGLI is a private entity that has a contract with the Federal Government
to process and pays claims under this program.
If you assigned your life insurance policy, you cannot elect a Living
Benefit. Living Benefit payments are reduced by 4.9% to make up for lost
earnings to the Life Insurance Fund because of the early payment of
benefits. The election of a Living Benefit has no effect on the amount of
any optional life insurance that you now carry and premiums for any optional
insurance must still be paid. You must contact OFEGLI at 1-800-633-4542 to
obtain the form to elect Living Benefits (Form FE-8). This form is not
available from your human resources office or the Office of Personnel
Management (OPM). The customer service representative will process your
claim over the phone and send you the FE-8 form to complete.
Federal retirees, unless they have
their life insurance, may cancel Basic or Optional life insurance coverage
at any time. Any cancellation or reduction of life insurance coverage must
be in writing and have an original signature by the insured retiree. Be sure
to include your retirement claim number (CSA number) or social security
number and specify what action you want taken.
Please note that you cannot increase your coverage after
retirement, or reinstate any coverage that you cancel.
Write to: U.S. Office of Personnel Management Retirement Operations
Center P.O. Box 45 Boyers, PA 16017-0045 The FEGLI election form is usually
for employees, but I would complete it and send it with your written request
for the reduction.
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