FEGLI optional life insurance is a supplemental policy that federal employees can purchase to increase their death‑benefit beyond the basic coverage provided by the Federal Employees' Group Life Insurance (FEGLI) program. It offers higher face amounts, flexible term lengths, and the ability to tailor coverage to personal financial needs, such as mortgage protection or income replacement for dependents.
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How FEGLI Optional Coverage Works
When you enroll in FEGLI, you automatically receive Basic coverage equal to your salary (up to a statutory limit) and a Service‑plus coverage option that adds a multiple of your salary. Optional coverage is an extra layer you can buy in increments of $1,000, up to $1 million, and you can choose the term (usually 1‑to‑30 years) that aligns with your financial obligations.
Key Features and Benefits
- Customizable face amounts – select only the amount you need.
- Portable coverage – you can keep the policy if you leave federal service, subject to conversion rules.
- Level premiums – rates are fixed for the chosen term, making budgeting easier.
- Tax‑advantaged – premiums are paid with after‑tax dollars, but the death benefit is generally income‑tax free.
Premium Calculation
Premiums are based on three factors: age at the time of purchase, chosen face amount, and term length. Rates increase with age because the insurer assumes higher risk. For example, a 35‑year‑old buying $100,000 of coverage for a 20‑year term will pay a lower monthly premium than a 55‑year‑old purchasing the same amount.
Eligibility and Enrollment
All active federal employees, retirees, and certain annuitants are eligible. Enrollment periods include the annual open season, a special enrollment window after a qualifying life event (marriage, birth, or promotion), and a one‑time initial election when you first become eligible for FEGLI. Outside these windows, you can only make changes if you experience a qualifying event.
When Optional Coverage Makes Sense
Consider adding optional coverage if you have:
- Significant debt (mortgage, student loans) that would burden a surviving spouse.
- Young children or dependents who rely on your income.
- Limited personal savings or other life‑insurance policies.
If you already have adequate private coverage or your financial obligations are modest, the basic FEGLI plan may be sufficient.
Comparison of Basic, Service‑plus, and Optional Coverage
| Coverage Type | Maximum Face Amount | Cost Structure | Portability |
|---|---|---|---|
| Basic | Salary up to $130,000 (2024 limit) | Employer‑paid | Not portable |
| Service‑plus | 1‑3 × salary | Employee‑paid (age‑rated) | Not portable |
| Optional | Up to $1 million | Employee‑paid (age‑rated, term‑rated) | Portable via conversion |
Conversion and Continuation After Leaving Federal Service
If you separate from federal employment, you have a 31‑day window to convert your optional coverage to an individual term policy without evidence of insurability, preserving the face amount and term you selected. After conversion, premiums are paid directly to the insurer and may differ from the original FEGLI rates.
Steps to Add or Adjust Optional Coverage
1. Review your current financial obligations and existing life‑insurance policies.2. Use the FEGLI online calculator or consult your HR benefits office to estimate premiums for desired face amounts.3. Submit the optional coverage election form during an open season or qualifying event window.4. Keep a copy of the confirmation and note the conversion deadline if you later leave federal service.