The Federal Employees’ Group Life Insurance (FEGLI) program provides group term life insurance to eligible Federal Government employees. Unlike whole life insurance products, the FEGLI policy does not build up any cash value, and you cannot borrow from your policy. There are four policy options: Basic life coverage and three forms of Optional coverage.
Eligibility
Most Federal employees are eligible for FEGLI coverage; however, you must have the Basic coverage to enroll in any Optional policies.
FEGLI Coverage Options
As mentioned, there are four policy options: The Basic coverage and three Optional coverage choices, which are Option A (Standard), Option B (Additional), and Option C (Family). The policy details are as follows:
BASIC Life
Amount of Coverage: Your annual salary rounded up to the next $1,000, plus $2,000. The policy also includes Accidental Death and Dismemberment coverage at no additional cost and additional coverage for enrollees under age 45 called the Extra Benefit. The Extra Benefit doubles the coverage amount of enrollees age 35 or younger and decreases each year by 10% until there is no additional coverage at age 45 or older.
Who is Covered: You
Cost: Biweekly, you pay 15¢ per $1,000 of coverage (Free for postal employees), and the cost does not increase with age.
OPTION A (Standard)
Amount of Coverage: $10,000
Who is Covered: You
Cost: Biweekly, you pay 20¢ per $1,000 of coverage, and the cost does increase with age.
OPTION B (Additional)
Amount of Coverage: 1 to 5 times your salary rounded up to the next $1,000.
Who is Covered: You
Cost: Biweekly, the cost starts at 2¢ per $1,000 of coverage, and the cost does increase with age.
OPTION C (Family)
Amount of Coverage: 1 to 5 multiples equaling $5,000 for your spouse and $2,500 for each eligible child. The multiple selected is applied to both the spouse’s and the child’s coverage; choosing a different multiple for your spouse and children is not allowed.
Who is Covered: Your spouse and unmarried dependent children under age 22 (or children 22 and older with a qualifying medical condition). Keep in mind that you are the only eligible beneficiary for this policy; no other beneficiary can be designated.
Cost: Biweekly, the cost starts at 22¢ per multiple, and the cost does increase with age.
Key FEGLI Facts
- FEGLI is term insurance; there is no cash or paid-up value, and you cannot borrow from your policy.
- There are four policy options: Basic coverage, Option A (Standard), Option B (Additional), and Option C (Family).
- Generally, you are automatically enrolled in Basic life insurance when newly hired.
- You must have the Basic coverage to enroll in any of the Optional policies.
- You have 60 days after becoming eligible to enroll in any Optional coverage.
- You may decrease FEGLI coverage at any time.
Enrollment
Generally, you are automatically enrolled in Basic life insurance when you are hired, and your premiums are deducted from your paycheck unless you decline coverage. But unlike the Basic insurance policy, enrollment in Optional insurance is not automatic, and you must elect the options you want. The following are the only periods you can enroll or increase your coverage of FEGLI:
- First 60 days after becoming eligible
- Within 60 days after a Qualifying Life Event (marriage, divorce, death of a spouse, acquiring an eligible child)
- Life insurance Open Season (not annual –a rare occurrence)
- After you pass a physical examination (Option C excluded)
Final Thoughts
Determining which policy is right for you and your family will depend on many factors, including your family’s composition, funds your family will need for immediate expenses, and the amount of support you would like to leave to your family. Additionally, you should reevaluate your life insurance needs periodically or when certain life events occur (birth of a child or marriage, etc.). This guide is meant to support your evaluation and shouldn’t be your only method of analysis. You should also review the OPM website and consult with your human resource personnel. If you have a complex need or want a professional opinion, you should consult with a qualified financial planner.
