What the conversion option does
The Federal Life Insurance Conversion Option lets eligible federal employees switch their Group Life Insurance (GLI) coverage to an individual whole‑life policy when they separate from service, preserving the same amount of coverage without needing a medical exam.
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Eligibility requirements
To qualify, you must:
- Be a current federal employee covered by GLI (or Federal Employees' Group Life Insurance, FEGLI).
- Leave federal service voluntarily or involuntarily (including retirement, resignation, or termination).
- Apply within the conversion window, typically 30 days after separation; some agencies allow up to 60 days.
Employees who were covered under the "basic" tier only may convert that portion; those with "supplemental" coverage can convert both tiers if they meet the same timing rules.
How the conversion works
When you submit a conversion application, the agency calculates the premium based on your age at the time of conversion and the amount of coverage you held. The policy becomes a non‑group whole‑life insurance contract that:
- Provides lifelong coverage as long as premiums are paid.
- Does not require a new health underwriting process.
- May have higher premiums than the original GLI because group rates no longer apply.
Cost considerations
Premiums increase with age, so converting earlier generally reduces long‑term cost. The conversion premium is usually higher than the group rate but lower than buying a comparable individual policy from the open market because the insurer already knows you were insurable under GLI.
| Age at conversion | Approx. monthly premium (per $100,000) | Notes |
|---|---|---|
| 30 | $5‑$7 | Lowest cost bracket |
| 45 | $12‑$15 | Premiums roughly double from age 30 |
| 60 | $30‑$35 | Significant increase; consider alternatives |
Timing and deadlines
The conversion window is strict. Missing the deadline means you lose the right to convert and must seek new coverage, which may involve medical underwriting. Some agencies issue a reminder notice, but ultimate responsibility lies with the employee.
Alternatives to conversion
If you miss the window or find premiums unaffordable, you have other options:
- Portability: Some agencies allow you to keep GLI coverage for a limited time after separation, usually up to 12 months, with premiums paid directly.
- New individual policy: Purchase a fresh life insurance policy; you will undergo health underwriting, which could result in higher rates or denial.
- Spousal or employer group coverage: If you have a new employer, check whether they offer group life insurance that meets your needs.
Steps to complete a conversion
1. Receive your separation notice and confirm the conversion deadline.2. Obtain the conversion application form from your agency's HR or benefits office.3. Fill out personal information and indicate the amount of coverage to convert.4. Sign and return the form within the deadline.5. Review the premium quote; set up automatic payments to avoid lapse.6. Keep a copy of the policy for future reference.