Federal Retiree Life Insurance: What's Covered?

Federal retirees in the United States can keep their life insurance coverage after retirement under the Federal Employees' Group Life Insurance (FEGLI) program. This is the largest group life insurance program in the world, covering over 4 million federal employees, retirees, and their family members. To carry insurance into retirement, individuals must have been enrolled in FEGLI for the five years before retirement or from their earliest opportunity to enroll. Basic insurance coverage uses a composite premium structure, meaning the rate is the same for each enrollee in the group policy, regardless of age or health status. The government contributes one-third of the cost of basic insurance premiums, while individuals pay the full cost of optional insurance coverage.

Federal Employees' Group Life Insurance (FEGLI) Program

The Federal Employees' Group Life Insurance (FEGLI) Program was established on August 29, 1954, and is the largest group life insurance program in the world, covering over 4 million federal employees and retirees, as well as many of their family members.

Most federal employees are eligible for FEGLI coverage, which provides group term life insurance. This means it does not build up any cash value or paid-up value. FEGLI consists of Basic life insurance coverage and three optional forms of insurance. If you are a new federal employee, you are automatically covered by Basic life insurance, and your payroll office deducts premiums from your paycheck unless you waive this coverage. The Basic insurance premium is a level rate per one thousand dollars of coverage, so the enrollee premium rates are equal for the duration of the coverage period. The rate for an individual enrollee does not change as the enrollee ages, although the rate structure for all enrollees is subject to periodic adjustments based on claims experience. The cost of Basic insurance is shared between the employee and the government—the employee pays 2/3 of the total cost, and the government pays 1/3.

In addition to Basic coverage, there are three forms of Optional insurance that can be elected. To elect any of the options, you must first have Basic insurance. Enrollment in Optional insurance is not automatic—you must take action to elect the options. You pay the full cost of Optional insurance, and the cost depends on your age.

FEGLI coverage after retirement

Federal employees can carry their Federal Employees' Group Life Insurance (FEGLI) coverage into retirement. To be eligible, they must have been enrolled in FEGLI for the five years before their retirement or from their earliest opportunity to enroll. If they do not meet this requirement, they cannot continue coverage.

If an employee is eligible to continue their FEGLI coverage into retirement, they must choose what will happen to their Basic coverage when they turn 65 or retire, whichever is later. They have three options:

• 75% Reduction: Basic coverage reduces by 2% each month until it reaches 25% of its pre-reduction amount. This option is free of charge once the reductions begin and remains free until death.
• 50% Reduction: Basic coverage reduces by 1% each month until it reaches 50% of its pre-reduction amount. There is an extra premium for this choice that the retiree will continue to pay until they die, switch to the 75% reduction, or cancel Basic.
• No Reduction: Basic coverage does not reduce. The retiree maintains the same amount of Basic coverage they had when they stopped being enrolled as an employee. There is a larger extra premium for this choice that the retiree will continue to pay until they die, switch to the 75% reduction, or cancel Basic.

If an employee does not submit the relevant form to indicate their choice, they will be defaulted to the 75% reduction.

In addition to Basic coverage, there are three forms of Optional insurance that employees can elect: Option A-Standard, Option B-Additional, and Option C-Family. The cost of Optional insurance depends on the individual's age.

FEGLI premium overview

Federal employees are eligible for Federal Employees' Group Life Insurance (FEGLI) coverage, which was established on August 29, 1954. It is the largest group life insurance program worldwide, covering over 4 million federal employees, retirees, and their family members.

The FEGLI Basic insurance premium is a level rate per one thousand dollars of coverage. The enrollee premium rates remain the same for the duration of the coverage period and are not affected by the enrollee's age. This means a younger employee pays the same cost for Basic coverage as a 64-year-old retiree. The Basic premium rate is the same for each enrollee in the group policy, regardless of age or health status. As such, younger employees may pay a comparatively higher premium than they would with coverage based, in part, on age.

The cost of Basic insurance is shared between the employee and the government. The employee pays 2/3 of the total cost, while the government pays 1/3. The FEGLI retirement benefit is prefunded by premium costs, allowing retirees to continue some coverage at no extra cost after age 65 (or at retirement, if later). The government's contribution to the Basic premium helps keep the employee's share competitive with the cost of private term insurance.

In addition to the Basic insurance, there are three forms of Optional insurance that can be elected: Option A - Standard, Option B - Additional, and Option C - Family. The employee pays the full cost of Optional insurance, and the price depends on their age.

Cancelling or decreasing FEGLI coverage

Federal employees and retirees are covered by the Federal Employees' Group Life Insurance (FEGLI) Program, which was established in 1954 and is the largest group life insurance program in the world. FEGLI coverage can be continued into retirement and, in some cases, can be provided at no cost to retirees over 65.

If you are an enrollee in the FEGLI program and wish to reduce or cancel your coverage, you may do so at any time by completing the Life Insurance Election Form, SF 2817, and submitting it to your Benefits Contact or human resources office. If you are retired, you must write a signed letter to the OPM's Retirement Office, including your signature, annuity number (CSA/CSF) or social security number, and your phone number. It is not possible to enrol, increase coverage, or restore cancelled coverage after retirement.

When reducing coverage, be sure to only sign for the coverage you want to keep. If you wish to cancel all coverage, sign in Box 5 of the form. It is important to note that if you have assigned your life insurance to another person or company, you cannot cancel or reduce your Basic, Option A, or Option B coverage.

You can also change beneficiaries at any time by submitting an SF 2823 form to your human resources office or the OPM's Retirement Office if you are retired.

Eligibility requirements for continuing life insurance coverage

Federal employees can keep their basic life insurance coverage after retirement if they meet the following eligibility requirements:

• Enrolled in basic life insurance under the Federal Employees' Group Life Insurance (FEGLI) program when they retire.
• Haven't converted their life insurance coverage to an individual policy.
• Had life insurance coverage for the 5 years immediately preceding retirement or for the full periods of federal service when coverage was available (if the coverage was for less than 5 years).
• Annuity payments start within 30 days.

If retiring under the Minimum Retirement Age (MRA) plus 10 provision of FERS, health care and life insurance coverage are suspended until the annuity starts, even if it is postponed. It is important to note that federal employees can also keep their optional life insurance benefits if they are eligible to continue their basic coverage and had optional life insurance coverage for the 5 years immediately preceding retirement or for the full periods of federal service when coverage was available.

The Federal Employees' Group Life Insurance (FEGLI) Program, established in 1954, is the largest group life insurance program in the world, covering over 4 million federal employees, retirees, and their family members. FEGLI provides group term life insurance, which does not build up any cash value or paid-up value. The cost of basic insurance is shared between the employee and the government, with the employee paying 2/3 of the total cost and the government paying 1/3. Employees pay the full cost of optional insurance, and the cost depends on their age.

Frequently asked questions