FEGLI Options

Understand Your FEGLI Options for Total Coverage

The Federal Employees’ Group Life Insurance (FEGLI) is a government-funded benefits program. Created in 1954, FEGLI ensures federal employees receive proper life insurance options at reduced, group rates. Provided through the government agency you work for, your family will receive cash benefits in the event that you pass away. There are two main types of FEGLI life insurance, and we offer both: basic and optional. To learn more about each type, and which could be best for you, keep reading.

A Breakdown of Your Basic FEGLI Options

1. Choose 75% reduction. Basic coverage reduces 2% per month until it reaches 25% of its pre-reduction amount. You pay no further premiums once the reduction begins.

2. Choose 50% reduction. Basic coverage reduces by 1% per month until it reaches 50%. You pay an additional premium or switch to 75% reduction or cancel.

3. Choose no reduction. Basic coverage remains. You pay a larger premium, or switch to 75% or cancel.

4. Federal employees insured for the basic insurance coverage may elect options to cover family members, including your spouse and unmarried children under the age of 22.

5. The coverage amount is equal up to multiples of $5,000 for a spouse and up to five multiples of $2,500 for each covered child. The premium depends on your age and increases every 5 years. You pay the full cost for this coverage.


Get More Coverage with Optional FEGLI Insurance

Federal employees covered under basic insurance have the option to purchase additional insurance. This allows you to maximize your coverage, while paying premiums that fall in line with your budget. If you find that your basic insurance isn’t comprehensive enough, these additional options are worth considering.

Option A
An additional $10,000 of coverage. This coverage reduces by 2% per month after age 65 until it reaches $2,500.

Option B
Choose 1,2,3,4, or 5 times your salary. The cost for this coverage increases every 5 years, and you pay the full cost. Once you’re a retiree at age 65, you no longer have to pay premiums, however the coverage begins to decline at a rate of 2% per month for 50 months at which point the coverage ceases. It’s important to note, at the time of retirement you have an option to keep this coverage and continue to pay premiums.

For a point of reference, here’s an example of Option B’s costs:
An employee aged 35 who earns $80,000 per year and chooses coverage for 5 times ($400,000) their salary would pay:

Age 35 = $ 26.00 per month
Age 50 = $112.80 per month
Age 65 = $537.20 per month
Age 75 = $1560 .00 per month
Age 80+ = $2080.00 per month

To learn more about the financial decisions you can make to maximize your FEGLI benefits, contact us today and schedule a consultation.

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Thomas & Thomas Advisors

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