What Is Option B?
Option B is a tiered life insurance program offered through the Federal Employees Group Life Insurance (FEGLI) system. Employees can choose a coverage amount that is a multiple of their annual basic pay, up to a maximum of 40 times that pay. The plan is designed to provide affordable protection for families while allowing employees to tailor the benefit to their needs.
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Eligibility and Enrollment
All active federal employees who qualify for FEGLI can enroll in Option B. New hires must apply within 60 days of their first day of service, and existing employees may add or adjust coverage during the open‑enrollment period or during a qualifying life event such as marriage, divorce, or the birth of a child. Employees cannot enroll in Option B while already enrolled in a higher‑coverage FEGLI option.
Cost Structure
Option B uses a graded premium schedule. The first $10,000 of coverage is the cheapest, and the premium increases progressively up to the maximum. Premiums are calculated based on age, gender, and health status at the time of enrollment, but the program does not require a medical exam for coverage up to $20,000. After that, a medical exam may be required. Premiums are deducted from the employee's pay each pay period and are tax‑free as a benefit.
Coverage Features
Key features include:
- Coverage amount is a multiple of annual basic pay, up to 40×.
- Optional rider for accidental death and dismemberment (AD&D) can be added for an additional premium.
- Survivor benefits are paid directly to the designated beneficiary.
- Coverage can be transferred or sold to a spouse or another eligible employee under the FEGLI Transfer Program.
Comparing Options
Below is a concise comparison of FEGLI options relevant to employees who might consider Option B.
| Option | Coverage Cap | Premium Basis |
|---|---|---|
| Option A | 1× basic pay | Lowest |
| Option B | 10–40× basic pay | Tiered |
| Option C | 10–100× basic pay | Higher |
| Option D | 10–300× basic pay | Highest |
How to Enroll or Adjust Coverage
Employees can manage their Option B coverage through the federal e‑services portal or by submitting a written request to the Office of Personnel Management (OPM). The portal provides real‑time premium estimates and allows employees to view their current coverage level, adjust amounts, or add the AD&D rider.
Benefits of Choosing Option B
Option B offers a balanced mix of affordability and flexibility. Employees who need moderate coverage without the higher premiums of Options C or D can use Option B to protect dependents and cover debts or mortgage payments. Because premiums are deducted automatically, the plan encourages consistent payment without the hassle of separate billing.