Federal Employees Group Life Insurance: Coverage, Eligibility, and How It Works

Federal Employees Group Life Insurance at a Glance

Federal Employees Group Life Insurance, commonly known as FEGLI, is the group term life insurance program available to civilian federal employees. It is the largest group life insurance program in the world, established by the federal government to give federal workers access to affordable life coverage. The program is administered by the Office of Personnel Management (OPM) and is funded through payroll deductions. FEGLI is designed as a complement to the federal benefits package, offering a straightforward way for employees and retirees to secure a death benefit without the complexity of individual underwriting.

FEGLI is not a single policy but a program with multiple coverage options that build on one another. Understanding these options helps federal workers decide how much coverage they actually need and whether the program still meets their goals after retirement.

Who Is Eligible for FEGLI

Eligibility depends on employment status and the type of appointment. The following groups are generally eligible:

• Full-time and part-time federal employees under a permanent or temporary appointment of one year or more.
• New hires have a 31-day open season to enroll without providing evidence of insurability.
• Employees returning from certain leaves of absence can also re-enroll within a set window.
• Retired federal employees may continue coverage, though the program and premiums change after retirement.
• Certain members of the National Guard and Reserve called to active duty may qualify under specific circumstances.

Not all federal workers are covered automatically. Enrollment is required, and the default is usually basic coverage only unless an employee actively selects additional options.

How FEGLI Coverage Is Structured

FEGLI is built around four coverage components. Basic life insurance is the foundation and is automatically provided to eligible employees who do not decline it. It is generally equal to the employee's annual salary rounded to the next $1,000, plus $2,000.

The three additional options form a supplement ladder:

• Option A provides standard $10,000 term life coverage for the employee's spouse and children.
• Option B allows the employee to purchase additional coverage equal to one to five times their basic salary, subject to medical evidence of insurability for amounts above the free limit.
• Option C provides coverage for the employee's dependent children, typically in units of $5,000 each, up to a maximum number of units.

Together, these options let a federal employee tailor coverage to family size, debt, and long-term financial goals.

Premium Costs and How They Change Over Time

FEGLI premiums are not fixed for the entire life of the policy. Basic insurance is generally free for employees, though retirees pay premiums for continued coverage. Options A, B, and C carry premiums that increase as the employee ages. The premium rates are set on a group basis and are the same regardless of the employee's health, which is one of FEGLI's main advantages. However, the rates increase at certain age brackets, often every five years, which means the cost of keeping the coverage can rise significantly in later career stages.

FEGLI for Federal Retirees

Federal retirees can keep FEGLI coverage, but the program shifts after retirement. Basic insurance continues at the same coverage level, and premiums are deducted from the annuity payment. The coverage does not increase with cost-of-living adjustments. For retirees considering whether to keep FEGLI, the key trade-off is between the convenience of group coverage and the rising premium costs compared with private alternatives. In some cases, retirees who no longer have dependents may find that dropping FEGLI and redirecting those funds makes more financial sense.

FEGLI Versus Private Life Insurance

FEGLI's strength is its guaranteed acceptance and lack of medical underwriting for basic and option A coverage. Private policies, especially term life insurance, can offer lower premiums for healthy individuals and more flexibility in coverage amounts. However, private policies require underwriting, and a federal employee's health may change over time in ways that affect eligibility or pricing. Many financial planners suggest keeping FEGLI for its guaranteed access while supplementing it with a private policy if the coverage gap is large.

How to Enroll, Change, or Drop FEGLI

Enrollment happens through the employee's agency human resources office. During the 31-day open season after hiring, employees can enroll, decline, or choose coverage options without proving insurability. After that window, changes generally require a qualifying life event such as marriage, divorce, birth of a child, or loss of other coverage. FEGLI coverage also continues for a period after leaving federal service, but employees should confirm the exact continuation rules with OPM or their agency.

Key Takeaways

• FEGLI is the federal government's group term life insurance program, available to most civilian employees and retirees.
• Basic coverage is automatic and free for active employees; options A, B, and C add supplemental protection.
• Premiums for options increase with age, and retirees pay premiums from their annuity.
• FEGLI does not require medical underwriting for basic and option A, which makes it valuable even if private coverage is also in place.