Federal Employees Group Life Insurance

What it is

The Federal Government established the Federal Employees' Group Life Insurance (FEGLI) Program in 1954 to provide group termlife insurance. FEGLI can help you meet your life insurance needs and is especially cost effective early in your career. Federal employees, Federal retirees (if they meet certain criteria to continue the coverage into retirement), and their family members can be covered under Basic and Optional insurance.

If you are an eligible employee you are automatically covered for Basic insurance, and have three Optional insurances you can elect.

Option A-Standard equals $10,000;

Option B-Additional equals 1-5 multiples of your salary;

Option C-Family equals 1-5 multiples of coverage for your eligible family members.

----Opt C: Each multiple equals $5,000 for a spouse, $2,500 for each child.----

What it isn't

The Premiums associated with the FEGLI increase each time the employee enters a new age bracket (every 5th year).  Since it is term coverage, it is pure death insurance, meaning that it has no potential for Cash Value Accumulation nor the necessary flexibility of Accelerated Living Benefits.  

Who's it for

FEGLI group term coverage is offered to eligible Federal Employees without a medical exam or any other limitations on participation.  This can make it an attractive option for those individuals with preexisting health conditions, poor driving records, unhealthy habits, or dangerous jobs.  For Postal Employees the Basic coverage is paid for by USPS.  As the individual ages, the costincrease associated with each new age bracket will continue to climb dramatically .  From age 50-60 the cost of the FEGLI increases 200%, just to keep the same amount of protection.  It is during this 10 year window that many Federal Employees attain their MRA and required years of service to be eligible for retirement.  When living on your retirement income, the increased cost is often to high to maintain the desired level of coverage.