FEGLI Basics

ByJeff Jewett

Federal Employees’ Group Life Insurance (FEGLI): Coverage and Premium Structure

This module provides an objective overview of the Federal Employees’ Group Life Insurance (FEGLI) program, established by the Federal Employees’ Group Life Insurance Act of 1954. [1, 2]

I. Regulatory Context

FEGLI is a group term life insurance program administered by the U.S. Office of Personnel Management (OPM). [1, 3]

  • Asset Type: It is term insurance with no cash or paid-up value.
  • Underwriting: It is a group policy with no medical examination required for initial enrollment upon hiring.
  • Funding: For Basic insurance, the federal government pays one-third of the premium, and the employee pays two-thirds. Optional coverages are funded entirely by the employee. [1, 2, 4, 5, 6, 7]

II. If/Then Scenarios

  • If an employee is hired into a FEGLI-eligible position, then they are automatically enrolled in Basic insurance unless they explicitly waive it.
  • If an employee desires Optional insurance (Option A, B, or C), then they must specifically elect it within 60 days of becoming eligible.
  • If an employee maintains Basic coverage, then the premium remains a level rate per $1,000 of coverage and does not increase based on the employee’s age.
  • If an employee elects Optional coverage (B or C), then premiums increase every five years as the employee moves into higher age-based bands.
  • If an employee reaches age 65 while in federal service, then some coverage types may begin to reduce in value depending on the retirement elections made. [1, 7, 8, 9, 10, 11, 12, 13, 14]

III. System Integration

FEGLI is integrated with federal payroll and personnel systems to ensure administrative consistency. [15]

  • Premium Collection: Deductions are taken automatically from biweekly or monthly pay via the agency’s payroll provider.
  • Recordkeeping: Individual agencies maintain FEGLI records for active employees; OPM’s Retirement Office manages records for annuitants.
  • Claims Processing: While OPM oversees the program, claims are processed by the Office of Federal Employees’ Group Life Insurance (OFEGLI), a private entity under contract with the government. [2, 3, 7, 15, 16, 17]

IV. 3-Step Action Plan

  1. Calculate Coverage Needs: Use the OPM FEGLI Calculator to determine the face value and biweekly cost of different combinations of Basic and Optional insurance.
  2. Verify Current Elections: Review the “Life Insurance” block on the most recent Leave and Earnings Statement (LES) or access the agency’s electronic Official Personnel Folder (eOPF) to confirm existing coverage levels.
  3. Update Beneficiary Designations: Submit Form SF 2823 to the employing agency to ensure death benefits are paid according to current intent, as these designations supersede instructions in a last will and testament. [15, 16, 18, 19, 20]