Basics: FEGLI Life Insurance Overview

Your FEGLI Life Insurance can be one of the best benefits you have as a Federal Employee. Not only is your coverage comprehensive for you and your family, but it also is quite affordable – especially for younger and unhealthy individuals.

Costs can quickly increase to a level that is unfordable – especially for those of you over the age of 50. Overall, the program is great for younger employees starting out their career. Since you cannot be declined for health reasons, those who may not be able to qualify for insurance outside of FEGLI can enjoy these benefits.

The Federal Employees’ Group Life Insurance (FEGLI) program is the largest group life insurance program in the world, covering over 4 million active federal employees and retirees. It is strictly a group term life insurance policy, meaning it is designed purely for death benefit protection and does not build up any cash value. 

1. Basic Insurance (The Foundation)

• The Rule: Most new federal employees are automatically enrolled in Basic insurance on their first day of work unless they actively waive it.
• The Math: Your coverage is calculated by taking your annual rate of basic pay, rounding it up to the next $1,000, and then adding an extra $2,000. (e.g., If your salary is $53,400, your salary is rounded to $54,000 + $2,000 = $56,000 of coverage).
• The Cost-Share: The government pays one-third of the premium cost, and you pay two-thirds via automatic biweekly payroll deductions. Your age has no effect on the cost of Basic insurance. (Note: For U.S. Postal Service employees, the agency pays the entire cost of Basic coverage).
• The Free Perks:
  • Accidental Death and Dismemberment (AD&D): Included automatically at no extra cost.
  • Extra Benefit: For employees under age 45, the payout is doubled at age 35 and under, decreasing by 10% each year until it drops off entirely at age 45. 

2. Optional Insurance (The Add-Ons)

• The Rule: You must be enrolled in Basic insurance to elect any of the Optional coverages. Enrollment is not automatic—you have a 60-day window from your hire date to elect them. You pay 100% of the costs, and premiums rise every five years based on your age band.
• Option A – Standard: A flat $10,000 of additional coverage.
• Option B – Additional: You can choose an amount equal to 1, 2, 3, 4, or 5 times your rounded annual basic pay.
• Option C – Family: Covers your immediate family members. You can elect up to 5 multiples. Each multiple is worth $5,000 of coverage for a spouse and $2,500 for each eligible child. 

3. Key If/Then Scenarios

• IF you do not enroll in Optional insurance within your first 60 days, THEN you must wait for a rare FEGLI Open Season (which happens very infrequently), experience a Qualifying Life Event (like marriage or the birth of a child), or pass a medical physical exam to add coverage later.
• IF you wish to carry your FEGLI coverage into retirement, THEN you must retire on an immediate annuity and have been covered under FEGLI for the 5 consecutive years of service immediately preceding your retirement date. 

Summary Checklist Framework

1. Basic: Automatic enrollment. Salary rounded up + $2,000.
2. Optional: Must be actively elected within 60 days of hire.
3. Cost structure: Basic is shared; Optional is paid entirely by the employee and gets significantly more expensive as you age.