If you work for the federal government, you’ve almost certainly heard of FEGLI. The Federal Employees’ Group Life Insurance program covers millions of federal workers, USPS employees, and VA employees, making it one of the largest group life insurance programs in the world. But having FEGLI and understanding FEGLI are two different things.
Many employees don’t know what they actually have, how much it costs, or whether it’s enough to protect their families. This guide breaks it all down and explains how FEGLI works, what each coverage option includes, what it costs, and when a private life insurance policy might be the smarter choice.
What Is FEGLI?
FEGLI stands for Federal Employees’ Group Life Insurance. It’s a group term life insurance program administered by the Office of Personnel Management (OPM) and underwritten by MetLife. The program was established in 1954, and has been the default life insurance option for federal employees ever since.
Most federal employees are automatically enrolled in FEGLI Basic coverage when they’re hired unless they specifically waive it. From there, you have the option to add more coverage through Optional insurance, though that has its own enrollment window, rules, and deadlines to understand.
FEGLI is not the same as the Federal Employees Health Benefits (FEHB) program or the Federal Employees’ Retirement System (FERS). It’s a separate benefit specifically for life insurance, and it operates independently of your retirement and health coverage.
How FEGLI Coverage Works
FEGLI is structured in two tiers: Basic coverage and Optional coverage. You’re enrolled in Basic automatically (unless you opt out), and Optional coverage requires you to actively elect it.
Basic Coverage
Basic coverage equals your annual basic pay rounded to the nearest thousand, plus $2,000. So if you earn $58,400 per year, your Basic coverage amount would be $60,000. Premiums are automatically deducted from your paycheck unless you waive it in writing.
The government pays one-third of the Basic premium, and you pay the remaining two-thirds. Basic coverage also includes an accidental death and dismemberment component at no extra cost, which pays double the Basic amount if you die in an accident.
If you’re retired, your Basic coverage amount begins to decrease at age 65 unless you elected for the paid option to maintain it. This is a detail many employees miss until they’re close to retirement.
Option A: Standard Optional Insurance
Option A provides an additional $10,000 of coverage on top of your Basic amount. It’s a flat dollar amount (not tied to your salary), and premiums are based on your age bracket. Younger employees pay less, and costs rise as you age. The government does not contribute to Optional coverage, so you’ll need to pay the full premium.
Option B: Additional Optional Insurance
Option B lets you choose coverage equal to one, two, three, four, or five times your annual basic salary. If you want more coverage because you have a mortgage, dependents, or other financial obligations, Option B is a way to increase your FEGLI benefit.
Premiums for Option B are age-based, and can increase significantly as you get older. Employees who sign up for Option B at 30 and keep it through retirement often find the premiums grow substantially by their 50s and 60s, which is one reason some federal employees explore private alternatives.
Option C: Family Optional Insurance
Option C covers eligible family members, including your spouse and dependent children. You can elect one through five multiples of coverage. Each multiple provides $5,000 of coverage for your spouse and $2,500 for each eligible dependent child.
Unlike Basic coverage, Option C pays a benefit when any covered family member dies. It’s the only FEGLI coverage that extends to your dependents.
FEGLI Enrollment: When You Can Sign Up and Change Coverage
FEGLI has strict enrollment rules that catch many employees off guard. You can enroll in or change coverage during the following windows:
- When you’re first hired (you have 60 days)
- After a qualifying life event such as marriage, divorce, or the birth or adoption of a child
- During open seasons, which OPM holds infrequently (not every year)
- After a medical exam approves you for coverage you previously waived
If you miss your initial 60-day window and don’t have a qualifying life event, getting additional Optional coverage requires a medical exam and approval from your insurance carrier. This is different from private group insurance, where you can often add coverage annually during open enrollment.
The limited enrollment windows are one of the main reasons financial professionals recommend federal employees review their FEGLI coverage early in their careers and make strategic decisions now rather than just accepting the default.
⭐ Not sure if your current coverage is enough? Fill out our short form to review your life insurance options as a federal, USPS, or VA employee.
How Much Does FEGLI Cost?
FEGLI premium rates are set by OPM and are not individually underwritten; meaning your health history doesn’t affect what you pay. Rates are calculated per $1,000 of coverage, and vary by age for Optional coverage.
For Basic coverage, the government covers roughly 33% of the premium, which makes it pretty affordable, especially for younger employees. The employee share of Basic runs about $0.15 per pay period, per $1,000 of coverage, though the exact rate can vary.
Optional coverage (A, B, and C) is paid entirely by the employee. Rates increase in five-year age brackets, which means the same coverage that cost $10 per pay period in your 30s might cost $40 or $50 per period in your late 50s. Over your career, the total cost of Optional coverage can be significant.
This escalating cost structure is one of the biggest differences between FEGLI and private term life insurance, which locks in a flat rate for the policy term. Employees who purchase private coverage while young and healthy often secure better long-term rates than what FEGLI Optional rates charge in the later years of a career.
What FEGLI Covers (and What It Doesn’t)
FEGLI pays a death benefit to your designated beneficiaries when you die. It’s term life insurance, which means it has no cash value, no investment component, and no ability to borrow against it. The benefit is straightforward: if you die while covered, your beneficiaries receive the payout.
Basic coverage includes accidental death and dismemberment (AD&D) insurance at no additional cost, which pays an additional benefit if you die or suffer a serious injury in an accident. Optional coverage does not include AD&D.
What FEGLI does not cover:
- Disability or inability to work
- Long-term care
- Cash value accumulation
- Permanent life insurance features, such as whole or universal life
- Full coverage in retirement (Basic does continue, but it reduces significantly after age 65 unless you pay a higher premium to keep it at its current level)
FEGLI also doesn’t provide income replacement if you’re out of work due to illness, injury, or pregnancy complications. That protection requires a separate policy because federal benefits packages do not include short-term disability insurance. You can learn more about the income gaps federal employees face in our federal employee short-term disability article.
How Does FEGLI Change in Retirement?
Many federal employees assume their FEGLI coverage stays the same after retirement. Unfortunately, it doesn’t. Once you retire, you have three options for Basic coverage:
- 75% Reduction: Your coverage reduces 2% per month starting at age 65 until it reaches 25% of your pre-retirement amount. Premiums stop after the reduction is complete, so you pay nothing for this option, but the benefit shrinks substantially.
- 50% Reduction: Coverage reduces more slowly, stopping at 50% of the pre-retirement amount. You pay a small premium for this option.
- No Reduction: Coverage stays at the full pre-retirement amount, but you pay a higher ongoing premium for the rest of your life.
The rules can vary for Optional coverage in retirement. Option A reduces after age 65, similar to Basic under the 75% election. Option B can be continued at full value, but the premiums remain age-based and continue to rise. Many retirees on Option B find the premiums increasingly unaffordable in their later years.
This is an important planning consideration. If you’re counting on FEGLI to protect your spouse or family in retirement, you need to understand what the actual payout will be after reductions, not just the coverage amount shown on your current earnings statement.
Should You Consider a Private Life Insurance Alternative?
FEGLI Basic is often a good value, especially for younger employees who get the government contribution toward premiums. But there are several situations where a private life insurance policy, either as a supplement or a replacement, makes more sense. These are the most common:
1. You Want Rate Stability
FEGLI Optional premiums increase with age. A 20-year or 30-year private term policy purchased while you’re young and healthy locks in a flat rate for the entire policy period. A typical federal employee can save over $50,000 over their career by locking in rates early rather than staying on FEGLI Option B into their 50s and 60s.
2. You Need More Coverage Than FEGLI Provides
Even with five multiples of Option B, your total coverage may not be enough to replace your income for the years your family would need extra support to pay off a mortgage or cover education costs. Private policies can be sized to match your actual financial obligations without the five-times-salary ceiling.
3. You’re Concerned About Retirement Coverage
If you don’t want your life insurance benefit to shrink in retirement (or you don’t want to pay increasing premiums to maintain it), a private policy purchased before retirement can provide stable, predictable coverage that FEGLI doesn’t.
4. You Missed the FEGLI Enrollment Window
If you waived Optional coverage early in your career and don’t have a qualifying life event, getting more FEGLI coverage requires medical underwriting. In that situation, private insurance may be equally available and potentially more affordable, depending on your health.
5. You Want Permanent Coverage
FEGLI is term coverage only. If you want a policy with cash value, a permanent death benefit, or estate planning features, private whole or universal life insurance products offer options that FEGLI does not.
6. You Can Get Your Premiums Back
Some private life insurance policies offer a feature FEGLI never will: a full refund of every premium you paid if you outlive the policy term. Called “Return of Premium Life Insurance,” it typically works on a 20-year period and functions as both income protection and a forced savings plan. If you don’t use the death benefit, you get your money back at the end of the term, making it a compelling option for federal employees who want coverage without feeling like they’re paying for something they may never need.
FEGLI vs. Private Life Insurance: Key Differences at a Glance
| Coverage Type | Cost | Enrollment | Premiums | Medical Exam |
| FEGLI Basic | Government-subsidized | Automatic | Fixed | Not required |
| FEGLI Optional | Employee-paid | Limited windows | Increase with age | Not required |
| Private Term Life | Employee-paid | Open | Fixed for policy term | Required |
| Private Permanent Life | Employee-paid | Open | Higher, but flexible | Required |
| Return of Premium Life | Employee-paid | Open | Fixed for policy term | Required |
No single option works for everyone, but the table above is a useful starting point for seeing where the gaps are. The right answer depends on your age, health, income, financial obligations, and how long you plan to work for the federal government. Many federal employees end up with a combination: keeping FEGLI Basic for the subsidized coverage and adding a private term policy to fill the gap.
Review Your Coverage Before You Need It
FEGLI is a solid benefit, but it works best when you actually understand what you have. Knowing your coverage amounts, what changes in retirement, and how Optional premiums grow over time puts you in a much better position to decide whether FEGLI alone is enough or whether supplementing it with a private policy makes sense for your situation.
Life insurance also only covers one piece of your financial picture. It protects your family if you die, but it doesn’t replace your income if you can’t work. Building a complete protection plan means thinking about both.
If you’d like help reviewing your current FEGLI coverage and exploring your options, you can schedule a 30-minute consultation to go through everything with someone who knows the federal benefits system inside and out.
Frequently Asked Questions About FEGLI Life Insurance
Most federal employees have more questions about FEGLI than their HR office has time to answer. Here are the ones that come up most often:
FEGLI Basic is typically worth keeping because the government subsidizes about a third of the premium and no medical exam is required. Whether Optional coverage is worth it depends on your age, health, and how the premiums compare to private alternatives. Younger employees often find private term policies competitive with FEGLI Option B rates, especially when you factor in premium stability over time.
It depends on where you are in your career. Option B can be affordable and convenient when you’re young, but premiums increase every five years and can become significantly more expensive by your 50s and 60s. Employees who need coverage through retirement often find that a private term policy purchased earlier in their career costs less over the long run. If you’re in good health, it’s worth comparing Option B rates at your current age bracket against what a private policy would cost before assuming Option B is the better deal.
The easiest way is to check your most recent Standard Form 50 (SF-50), Notification of Personnel Action. Block 27 shows a two-character code that identifies your current FEGLI elections. You can also use the FEGLI Calculator on OPM’s website to see your coverage amounts and premiums based on your age, salary, and elections. If you’re a retiree, you can log into Retirement Services Online to view your Verification of Life Insurance (VOLI).
Option C covers your spouse and eligible dependent children. Each multiple of Option C provides $5,000 of coverage for your spouse and $2,500 for each eligible dependent child, up to five multiples. Eligible children must generally be unmarried and under age 22, with an exception for children who are incapable of supporting themselves due to a disability that began before age 22.
Your FEGLI coverage continues into retirement, but the structure changes. Basic coverage reduces after age 65 under the standard 75% reduction option, unless you elect a different option and pay the corresponding premium. To carry FEGLI into retirement at all, you generally need to have been enrolled for five consecutive years before you retire. Optional coverage has its own rules, and premiums for Option B continue to rise with age even after retirement.
Yes. You can cancel or reduce your FEGLI coverage at any time during the year without a qualifying life event. For example, you can drop Option B entirely or reduce it from five multiples to fewer. The important caveat is that if you cancel or reduce coverage, you may not be able to get it back without a qualifying life event, a medical exam, or waiting for a rare OPM-scheduled open season. Make sure any coverage you drop has been replaced before canceling.
If you leave federal service before retirement, you can convert your FEGLI coverage to an individual policy, but you cannot take the group rates with you. Converted policies are typically more expensive than comparable private coverage. If you’re leaving federal service, it’s worth shopping private options before locking in a conversion.
Yes. Many federal employees carry both. A common approach is to keep FEGLI Basic for the subsidized coverage and hold a private term policy to cover the gap between what FEGLI provides and what your family actually needs. There is no rule against having both.
FEGLI Basic pays the full death benefit regardless of cause of death, including suicide, after the first year of coverage. There is no suicide exclusion once the policy has been active for 12 months.
No. Life insurance pays a benefit when you die, but it does not replace your income if you cannot work due to illness or injury. For income protection during a disability, you would need a separate disability insurance policy. Federal employees should be aware that the government does not provide this benefit automatically, and while FMLA protects your job, it does not protect your paycheck. To understand how both protections work and where each one falls short, see our guide on short-term disability vs. FMLA for federal employees.