Federal Employee Life Insurance (FEGLI) Program

The Federal Employees' Group Life Insurance (FEGLI) program is the largest group life insurance program in the United States, covering approximately 4 million federal employees, retirees, and their family members (U.S. Office of Personnel Management, FEGLI Program). Administered by the U.S. Office of Personnel Management (OPM) and underwritten by Metropolitan Life Insurance Company (MetLife) under a contract with OPM, FEGLI provides term life insurance — not whole life — without a cash value component. Understanding how FEGLI is structured, priced, and adjusted at retirement is essential to evaluating it alongside the broader federal employee benefits overview that shapes total compensation for the federal workforce.

Definition and scope

FEGLI is authorized under the Federal Employees' Group Life Insurance Act of 1954, codified at 5 U.S.C. Chapter 87. Coverage is available to most full-time and part-time permanent federal civilian employees in the executive, legislative, and judicial branches, as well as to certain employees working for the District of Columbia government. Temporary employees in positions lasting fewer than one year are generally excluded, as are certain intermittent workers.

The program operates through four distinct coverage categories:

1. Basic Insurance — Automatically offered to all eligible employees; the coverage amount equals the employee's annual basic pay rounded up to the next $1,000, plus $2,000. Basic coverage is the foundation upon which all optional coverage is layered.
2. Option A (Standard Optional) — Adds a flat $10,000 of additional coverage.
3. Option B (Additional Optional) — Allows employees to elect 1, 2, 3, 4, or 5 multiples of their annual basic pay rounded to the nearest $1,000.
4. Option C (Family Optional) — Covers eligible family members; employees may elect 1 through 5 multiples, with each multiple providing $5,000 on a spouse and $2,500 on each eligible dependent child.

Coverage for Basic insurance is automatic upon entry into an eligible position unless the employee actively waives it within 31 days.

How it works

Premium costs under FEGLI are shared between the employee and the federal government. For Basic insurance, employees pay two-thirds of the total premium and the government pays one-third (OPM FEGLI Premium Rates). For Options A, B, and C, employees pay the full premium without any agency contribution.

Premium rates for Basic and Option A are age-banded and increase as employees move into higher age brackets — particularly after age 35, with steeper increases at ages 40, 45, 50, 55, 60, and beyond. Option B and Option C rates follow similar age-banded structures based on five-year age brackets.

Enrollment outside of the initial eligibility window requires a Qualifying Life Event (QLE) or a medical examination to demonstrate insurability, unless OPM opens a special enrollment period. This makes initial enrollment decisions consequential: employees who waive Optional coverage at hire and later develop health conditions may be unable to re-enroll without passing medical underwriting.

At retirement, coverage continuation is available under specific rules. Retirees who have been enrolled in Basic insurance for the five consecutive years immediately before retirement may continue coverage, but the cost structure and benefit amounts change materially. Under the standard reduction schedule, Basic insurance reduces by 2% per month beginning 30 days after retirement until it reaches 25% of the pre-retirement face value — a reduction that continues over approximately 37 months. Retirees can elect a 50% reduction or no reduction, but the no-reduction election carries substantially higher premiums.

The federal retirement systems governing CSRS and FERS participants each interact with FEGLI continuation rules in identical ways — the retirement system itself does not alter FEGLI continuation eligibility, only years of enrollment matter.

Common scenarios

New hire default enrollment: An employee entering a GS-9 position with a $55,000 annual salary is automatically enrolled in Basic FEGLI coverage of approximately $57,000 (salary rounded up plus $2,000). If that employee takes no action within 31 days, Options A, B, and C are not added — active elections are required for all Optional coverage.

Salary increase effect on Option B: Because Option B is tied to multiples of annual basic pay, a promotion or within-grade increase automatically adjusts the face value of Option B coverage upward. An employee at the GS-12 step 1 level in Washington, D.C., earning locality-adjusted pay above the base GS rate will have Option B coverage calculated on the higher locality-adjusted figure.

Pre-retirement planning: An employee nearing retirement under FERS who elected the "no reduction" option for Basic FEGLI will pay premiums calculated at the post-65 age band but retain the full face value of the policy. This contrasts sharply with the standard reduction path, which preserves a 25% residual benefit at no cost after age 65.

Family coverage gap: Option C terminates coverage for a dependent child who reaches age 22, regardless of student status. An employee whose child ages out of Option C does not need to take action — coverage simply ceases — but the employee's premium is automatically reduced accordingly.

Decision boundaries

Choosing between FEGLI coverage levels versus outside term life insurance involves comparing the age-banded FEGLI premiums directly against market rates. FEGLI Option B at 5× salary can become expensive in the 50–59 age band relative to comparable commercially available term policies for healthy individuals — but FEGLI carries no medical underwriting at initial enrollment, which has significant value for employees with health conditions.

Key decision thresholds:

• Waiving coverage at hire is effectively irreversible without a QLE or medical exam; this is the highest-stakes decision point in FEGLI participation.
• Approaching retirement with Option B at 5× requires explicit evaluation of whether to reduce multiples before retirement, since reducing Options B and C during employment does not require medical evidence, while re-enrolling in higher multiples does.
• Survivor needs vs. self-insurance capacity — employees who accumulate substantial assets through the Thrift Savings Plan may find declining levels of Optional FEGLI appropriate as they approach financial independence.
• Spousal coverage under Option C is not portable to the spouse's own employer plan; Option C only pays upon the covered family member's death, not as a health or income-replacement benefit.

Employees managing benefits questions across FEGLI and related programs can use the Federal Employee Authority home as a structured reference point for connecting life insurance decisions to the full benefits framework, including dental and vision insurance and flexible spending accounts.