Federal Employee Life Insurance: Age Limit And Benefits

Federal employees are eligible for Federal Employees' Group Life Insurance (FEGLI) coverage, which includes Basic life insurance coverage and three optional insurance plans. Employees are automatically enrolled in the FEGLI basic insurance called the Basic Insurance Amount (BIA) when they enter federal service. The BIA is equal to the greater of the employee's salary rounded up to the next $1,000 plus $2,000, or $10,000. The federal government pays one-third of the premium cost of an employee's BIA, while the employee pays the remaining two-thirds. Employees must have BIA in order to elect any of the optional insurance plans, which include Option A (Standard, or $10,000), Option B (multiple of salary 1 to 5 times), and Option C (Family coverage, on a spouse and children). Unlike BIA, enrollment in optional insurance plans is not automatic, and employees must take action to elect these options. Employees pay the full cost of optional insurance, and the price depends on their age. FEGLI coverage can be continued into retirement if certain conditions are met.

Federal Employees' Group Life Insurance (FEGLI)

Federal Employees Group Life Insurance (FEGLI) is a program that provides life insurance coverage to over 4 million federal employees, retirees, and their family members. It was established on August 29, 1954, and is the largest group life insurance program in the world. Most federal employees, including both full-time and part-time employees, are eligible to enroll in the FEGLI program.

When an individual enters federal service, they are automatically enrolled in the FEGLI "basic" insurance, known as the Basic Insurance Amount (BIA) or Basic Life Insurance, unless they formally waive it. The BIA is equal to the greater of the employee's salary rounded up to the next $1,000 plus $2,000, or $10,000. The federal government pays one-third of the premium cost of an employee's BIA, while the employee pays the remaining two-thirds. Younger employees are also entitled to an additional BIA life insurance provision called the "Extra Benefit," which doubles the amount of the BIA at no extra cost for enrollees aged 35 or younger. This extra benefit decreases by 10% each year until the age of 45, after which it ends.

In addition to the Basic insurance, there are three forms of Optional insurance that employees can elect: Option A (Standard, or $10,000), Option B (Multiple of Salary, ranging from one to five times the salary), and Option C (Family Coverage, which covers the employee's spouse and eligible dependent children). Employees pay the full cost of these optional coverages, and the cost depends on their age.

FEGLI coverage can be continued into retirement if certain requirements are met. To carry insurance coverage into retirement, employees must have been enrolled in FEGLI for the five years before retirement or from their earliest opportunity to enroll. If this requirement is not met, the coverage cannot be continued. If eligible, employees have several choices regarding how much of their FEGLI life insurance coverage they can carry into retirement.

For the Basic Insurance Amount in retirement, employees must choose between three reduction options: 75% reduction, 50% reduction, or no reduction. The chosen reduction option will determine the cost of the coverage.

For optional insurance in retirement, the amount of coverage depends on the options the employee had on the day they separated from service. This amount can be continued until the age of 65 or until the month the employee retires if they retire after 65. Similar to the Basic Insurance Amount, employees can choose between full reduction or no reduction for each multiple of optional insurance. The cost of optional insurance in retirement depends on the employee's age and the number of multiples covered.

Overall, the FEGLI program offers comprehensive life insurance coverage for federal employees and their families, with options to continue coverage into retirement.

FEGLI coverage after retirement

Federal Employees' Group Life Insurance (FEGLI) coverage can be carried into retirement if the individual was enrolled in FEGLI for the five years before their retirement, or from their earliest opportunity to enroll. If this requirement is not met, the coverage cannot be continued.

If eligible, there are several options for how to continue FEGLI coverage into retirement:

• 75% Reduction: The Basic coverage reduces by 2% each month until it reaches 25% of its pre-reduction amount. There are no premiums required once the reductions begin.
• 50% Reduction: The 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 must be paid until death, when the reduction reaches 75%, or if the coverage is cancelled.
• No Reduction: The Basic coverage amount remains the same as when the individual was enrolled as an employee. There is a larger extra premium for this choice that must be paid until death, the reduction reaches 75%, or if the coverage is cancelled.

It is important to note that if an individual chooses to cancel their Basic insurance coverage, they are also cancelling all their Optional insurance coverage. Additionally, if an individual is receiving annuity payments, their life insurance premiums are withheld from their annuity.

FEGLI optional insurance coverage

Federal Employees' Group Life Insurance (FEGLI) 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.

Basic Insurance

Most federal employees are eligible for FEGLI coverage and are automatically covered by Basic Insurance unless they choose to waive it. Basic Insurance is effective on the first day an employee enters a pay and duty status. 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 the remaining 1/3. An employee's age does not affect the cost of Basic Insurance.

Optional Insurance Coverage

Optional Insurance coverage is not automatic and must be elected by the employee. Employees must have Basic Insurance in order to elect any of the options. The employee pays the full cost of Optional Insurance, and the cost depends on their age. There are three types of Optional Insurance available:

• Option A (Standard Optional Insurance): provides $10,000 of additional coverage.
• Option B (Additional Optional): comes in 1, 2, 3, 4, or 5 multiples of the employee's annual basic rate of pay.
• Option C (Family Optional Insurance): insures an employee's spouse and eligible children.

FEGLI Coverage After Retirement

FEGLI life insurance coverage can be continued into retirement if certain requirements are met. To carry insurance coverage into retirement, an employee must have been enrolled in FEGLI for the five years before retirement or from their earliest opportunity to enrol. If this requirement is not met, coverage cannot be continued. If eligible, an employee has several choices regarding how much of their FEGLI life insurance coverage they can carry into and throughout retirement.

FEGLI coverage termination

Federal Employees Group Life Insurance (FEGLI) coverage may be terminated in the following circumstances:

• You leave government employment for any reason other than retirement.
• You take a government job that doesn't provide FEGLI coverage.
• You are in a non-pay status for more than 12 months.
• Your annuity is terminated.
• Your pay or annuity after all other deductions are taken is too small to pay the premiums.

If your FEGLI coverage is terminated, you are entitled to a 31-day extension of coverage at no cost to you. You also have the right to convert your coverage to an individual policy without providing evidence of medical insurability. However, you will be responsible for paying the full amount of the premiums yourself. The cost of the individual policy will depend on the dollar amount of insurance you require, your age, and your risk category.

If you return to work in a federal job that offers FEGLI coverage, you may be able to reenroll during an open season or if a qualifying life event has occurred, such as getting married or having a child. However, once a retiree has lost FEGLI coverage, it is rarely possible to enroll again.

FEGLI coverage cost

The Federal Employees' Group Life Insurance (FEGLI) Program 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. The cost of FEGLI coverage depends on the type of insurance chosen, with Basic insurance and three types of Optional insurance available.

Basic Insurance

The Basic Insurance Amount (BIA) is an employee's salary rounded up to the next $1,000, plus $2,000, or $10,000, whichever is greater. The federal government pays one-third of the premium cost of the BIA, while the employee pays the remaining two-thirds. The BIA premium rate is the same for each enrollee, regardless of age or health status. Younger employees (aged 35 or younger) are entitled to an "Extra Benefit", which doubles the amount of the BIA at no extra cost. This benefit decreases by 10% each year until the age of 45, when it ends.

Optional Insurance

There are three types of optional insurance available: Option A, Option B, and Option C. Employees pay the full cost of optional insurance, and the price depends on their age.

Option A is a flat amount of $10,000. The cost varies by age, with current premium rates available on the U.S. Office of Personnel Management website.

Option B is an amount equal to one, two, three, four, or five times an adjusted salary, rounded up to the next $1,000, plus $1,000. The cost of Option B is presented in a table on the U.S. Office of Personnel Management website, with costs varying by age.

Option C provides life insurance coverage for an employee's spouse and eligible dependent children. Each multiple is equal to $5,000 for a spouse and $2,5000 for each eligible child. The cost of Option C depends on the employee's age group, with costs for each multiple presented in a table on the U.S. Office of Personnel Management website.

FEGLI Coverage After Retirement

To carry insurance coverage into retirement, an employee must have been enrolled in FEGLI for the five years before their retirement or from their earliest opportunity to enroll. If this requirement is not met, coverage cannot be continued. The cost of insurance in retirement depends on the post-retirement option chosen.

If the 75% reduction option is chosen, the premium paid will be the same as that paid as an employee ($0.3467 per $1,000 per month) until the age of 65, after which no more premiums will be paid and the value of the insurance will decline by 2% per month until it reaches 25%.

The 50% reduction option has a higher premium ($1.0967 per $1,000 per month) until the age of 65, at which point the premium drops to $0.75 per $1,000 per month and the insurance value declines by 1% per month until it reaches 50%.

The no reduction option is the most expensive, with a premium of $2.5967 per $1,000 per month until the age of 65, when the premium will drop to $2.25 per $1,000 per month.

Cancelling FEGLI Coverage

To cancel FEGLI coverage, an employee must formally do so by filling out and submitting Form SF 2817 to their human resources office. If this form is not submitted and accepted, premiums will continue to be deducted from the employee's paycheck and coverage will continue.

Frequently asked questions