Federal Basic Life Insurance: What's The Minimum Amount?

The Federal Employees' Group Life Insurance (FEGLI) Program was established in 1954 and is the largest group life insurance program in the world, covering over 4 million federal employees, retirees, and their family members. Most employees are eligible for FEGLI coverage, which includes Basic life insurance and three options for additional insurance. Basic life insurance is effective on the first day of pay and duty status and is shared between the employee and the government, with the employee paying 2/3 of the total cost and the government paying 1/3. The cost of Basic insurance is a level rate per $1,000 of coverage, with the rate remaining the same for each enrollee regardless of age or health status. So, is there a minimum amount for federal basic life insurance?

Federal Employees' Group Life Insurance (FEGLI)

Federal Employees Group Life Insurance (FEGLI) is a term insurance policy that was established on August 29, 1954, and is the largest group life insurance program in the world, covering over 4 million federal employees, retirees, and their family members. Most employees are eligible for FEGLI coverage, which includes Basic life insurance coverage and three options for additional coverage.

New federal employees are automatically enrolled in Basic Life Insurance and must waive the coverage if they do not want it. 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. The rate for Basic insurance is a level rate per $1,000 of coverage, which means that the enrollee premium rates are equal for the duration of the coverage period and are not affected by age or health status. This means that younger employees may pay a comparatively higher premium than they would with coverage based on age. However, younger employees are covered by an additional Basic insurance provision called the Extra Benefit, which doubles the amount of Basic insurance payable at no extra cost for enrollees age 35 or younger. Beginning on an enrollee's 36th birthday, the Extra Benefit decreases by 10% each year until age 45, after which there is no Extra Benefit.

In addition to Basic Life Insurance, there are three types of Optional Insurance available to employees: Option A (standard optional insurance), Option B (additional optional), and Option C (family optional insurance). Option A provides a $10,000 additional coverage, while Option B and Option C offer different levels of coverage depending on the employee's annual basic rate of pay and the number of eligible family members. Employees must have Basic insurance to elect any of the Optional insurance plans, and they must take action to elect these options within 31 days of becoming eligible. The employee pays the full cost of Optional insurance, which is based on their age.

FEGLI coverage can be continued into retirement, and the cost of this post-65 benefit is included in the FEGLI Basic level premium. This means that younger enrollees' premiums help cover the cost of coverage for older enrollees, making the employee share of the cost relatively competitive with private term insurance.

FEGLI Basic insurance premium

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, retirees, and their family members. Most 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 additional options. New federal employees are automatically covered by Basic life insurance, and their premiums are deducted from their paycheck unless they waive the coverage. The Basic insurance premium is a level rate per one thousand dollars of coverage. The enrollee premium rates are equal for the duration of the coverage period and are not affected by the enrollee's age. 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.

In addition to Basic insurance, there are three forms of Optional insurance that employees can elect: Option A (standard optional insurance), Option B (additional optional), and Option C (family optional insurance). Employees must have Basic insurance to elect any of the optional coverages. The employee pays the full cost of Optional insurance, which depends on their age.

The FEGLI Calculator is a tool that can be used to determine the face value of various combinations of FEGLI coverage, calculate premiums, and see how choosing different options can change the amount of life insurance and premium withholdings.

Cost of Basic Insurance

The Federal Employees' Group Life Insurance (FEGLI) Program was established on August 29, 1954, and is the largest group life insurance program globally, covering over 4 million federal employees, retirees, and their family members. Most employees are eligible for FEGLI coverage, which provides group term life insurance. This means it does not accumulate any cash value or paid-up value.

The FEGLI program consists of Basic life insurance coverage and three optional forms of insurance. New federal employees are automatically enrolled in Basic life insurance, with premiums deducted from their paychecks unless waived. The Basic insurance premium is a level rate per one thousand dollars of coverage, with the enrollee premium rates remaining 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 may be adjusted periodically based on claims experience. This means a younger employee pays the same cost for Basic coverage as an older one. 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 contributing 1/3.

The Basic insurance premium features a level premium, ensuring predictable costs for enrollees. Additionally, younger employees are covered by the Extra Benefit provision, which doubles the Basic insurance amount at no extra cost for enrollees aged 35 or younger. This benefit decreases by 10% each year from the enrollee's 36th birthday until age 45, after which it ceases. For example, a 40-year-old enrollee would receive a 50% increase in the Basic Insurance Amount.

The FEGLI program offers a comprehensive life insurance solution for federal employees, with the Basic insurance component providing a foundational level of coverage shared between the employee and the government. The level rate and Extra Benefit provisions contribute to the overall cost structure of the Basic insurance option within the FEGLI program.

Additional Optional Insurance

Federal Employees' Group Life Insurance (FEGLI) is a term insurance policy that does not accumulate cash value. It is the largest group life insurance program globally, covering over 4 million federal employees, retirees, and their family members.

New federal employees are automatically enrolled in Basic Life Insurance unless they choose to waive it. This insurance is effective from an employee's first day of work and pay. Basic Life Insurance is calculated based on an employee's annual basic rate of pay, rounded up to the nearest $1,000, plus $2,000. For example, an employee with an annual salary of $35,260 would be insured for $38,000 ($36,000 plus $2,000). The cost of Basic Life Insurance is shared between the employee and the government, with the employee paying 2/3 of the total cost and the government contributing 1/3. Age does not factor into the calculation of these costs.

In addition to Basic Life Insurance, there are three types of Optional Insurance available to employees: Option A (Standard Optional Insurance), Option B (Additional Optional Insurance), and Option C (Family Optional Insurance). Employees must have Basic Insurance to be eligible for any of the Optional Insurance types. Unlike Basic Insurance, enrollment in Optional Insurance is not automatic, and employees must actively elect to add it to their coverage.

Option A: Standard Optional Insurance

Option A provides a flat $10,000 of additional coverage. The employee pays the full cost of this option, and the amount depends on their age.

Option B: Additional Optional Insurance

Option B allows employees to increase their coverage by 1, 2, 3, 4, or 5 times their annual basic rate of pay. The employee pays the full cost of this option, and the amount depends on their age. For example, if an employee has an annual salary of $50,000, they can choose to be insured for $50,000, $100,000, $150,000, $200,000, or $250,000.

Option C: Family Optional Insurance

Option C allows employees to insure their spouse for up to 5 multiples of $5,000 and/or eligible children for up to 5 multiples of $2,500 each. The employee pays the full cost of this option, and the amount depends on their age. For example, an employee can choose to insure their spouse for up to $25,000 and each eligible child for up to $12,500.

Waiving Basic Insurance Coverage

Federal Employees' Group Life Insurance (FEGLI) is a term insurance policy that does not accumulate cash value. It was established on August 29, 1954, and is currently the largest group life insurance program globally, covering over 4 million federal employees, retirees, and their family members.

Most federal employees are eligible for FEGLI coverage, and new employees are automatically enrolled in the Basic Life Insurance plan unless they choose to waive it. Basic Life Insurance is effective on the first day of pay and duty. Employees have 31 days from their appointment date to elect additional Optional Insurance or waive coverage. To waive Basic Insurance Coverage, employees must submit the Life Insurance Election Form, SF-2817, to their servicing Human Resources Office. Additionally, employees are encouraged to submit the SF-2823 Designation of Beneficiary form.

The Basic Life Insurance premium is calculated as a level rate per thousand dollars of coverage. This means that the premium rate remains constant throughout the coverage period, regardless of the enrollee's age or health status. The cost of Basic Life Insurance is shared between the employee and the government, with the employee paying 2/3 of the total cost and the government contributing 1/3.

It is important to note that Basic Life Insurance coverage is a prerequisite for electing any of the three Optional Insurance plans offered by FEGLI. These include Option A (standard optional insurance), Option B (additional optional), and Option C (family optional insurance). Employees must proactively elect these options, as enrollment in Optional Insurance is not automatic.

Frequently asked questions