What Is FEGI Life Insurance and How Does It Work?

What Is FEGI Life Insurance?

FEGI life insurance is the Federal Employees Group Life Insurance program, a group term life insurance coverage offered to U.S. federal employees. It provides a death benefit to beneficiaries if the insured employee dies while covered, and it is administered by the Office of Personnel Management (OPM) in partnership with carrier companies.

Key Features of FEGI Coverage

• Basic coverage is automatically provided to eligible employees, with premiums deducted from pay.
• Optional supplemental coverage allows employees to increase their death benefit up to certain limits.
• FEGI covers full-time and part-time federal employees, including those in competitive service, excepted service, and certain postal workers.
• Beneficiary designations are made by the employee and can be updated at any time.

Basic vs. Optional Coverage

Basic FEGI coverage equals the employee's annual salary rounded to the next $1,000, plus $2,000, with a maximum cap. Optional coverage, known as FEGI Option A, B, and C, lets employees add supplemental amounts for family or additional financial protection. Each option has its own premium rate and coverage limits.

Eligibility and Enrollment

Most new federal employees are automatically enrolled in Basic FEGI within 31 days of their start date, unless they waive coverage. During this window, employees can also elect Optional coverage. Late enrollment outside the initial period typically requires evidence of insurability.

What FEGI Does Not Cover

FEGI is strictly a term life insurance program. It does not include a cash value component, investment feature, or living benefits such as accelerated death benefits for terminal illness, though some supplemental options may offer limited living benefit riders.

FEGI vs. Other Federal Benefits

FEGI is distinct from the Federal Employees Retirement System (FERS) and Thrift Savings Plan (TSP). While FERS and TSP focus on retirement savings and income, FEGI addresses income replacement for dependents in the event of the employee's death.