What Is Federal Life Insurance?
Federal Life Insurance (FLI) is a government‑backed program that offers life insurance to eligible federal employees and their families. It provides a standardized policy framework with three distinct options—A, B, and C—each designed to meet different coverage needs and financial situations.
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Option A: The Core Policy
Option A is the baseline life insurance plan available to all eligible federal workers. It offers a death benefit equal to the insured's salary multiplied by a fixed factor, typically 10 × annual salary. Premiums are paid as a percentage of the employee's salary, capped at 1 % for active duty and 0.5 % for retirees. The plan includes a voluntary rider for accidental death and dismemberment, which can be added for an extra premium.
Option B: Supplemental Coverage
Option B builds upon Option A by adding a supplemental death benefit that increases the coverage amount. The benefit is calculated as the higher of either the employee's salary or a flat $200,000, whichever is greater. Premiums for Option B are typically 1.5 % of salary for active employees and 0.75 % for retirees. This option is suited for those who need a higher death benefit without purchasing a separate policy.
Option C: The Flexible Choice
Option C is a flexible, term‑based policy that allows employees to choose a coverage amount up to a maximum of $500,000. The term length can be 5, 10, 15, or 20 years, after which the policy can be renewed or converted to a permanent plan. Premiums are fixed for the chosen term and are generally lower than Options A and B for equivalent coverage, making it attractive for younger employees or those with tighter budgets.
Eligibility and Enrollment
All active federal employees, retirees, and certain family members are eligible. Enrollment occurs during the annual benefits enrollment period or through a qualifying life event such as marriage or birth. Employees can change their option or adjust coverage at any time, but premium adjustments apply only at the next enrollment cycle.
Key Comparisons
| Attribute | Option A | Option B | Option C |
|---|---|---|---|
| Death Benefit | 10× Salary | Higher of Salary or $200k | Up to $500k |
| Premium Rate | 1 % / 0.5 % | 1.5 % / 0.75 % | Fixed per term |
| Term Length | Permanent | Permanent | 5–20 years |
| Flexibility | Low | Medium | High |
Choosing the Right Option
Deciding among the three options depends on financial goals, family responsibilities, and risk tolerance. Those seeking a low‑cost, lifelong plan may prefer Option A. Employees needing a larger death benefit without a separate policy often choose Option B. Younger workers or those who want a customizable coverage level typically opt for Option C. Consulting a benefits advisor or financial planner can help match coverage to personal circumstances.