Federal Employees Group Life Insurance (FEGLI): Coverage and Options

Federal Employees Group Life Insurance (FEGLI) is the largest group life insurance program in the United States, covering approximately 4 million federal employees, retirees, and their family members (OPM FEGLI Program Overview). Administered by the U.S. Office of Personnel Management (OPM) under 5 U.S.C. Chapter 87, the program provides term life insurance through a contract with Metropolitan Life Insurance Company (MetLife). Understanding FEGLI coverage tiers, cost-sharing mechanics, and enrollment windows is essential to building an effective federal employee benefits strategy.

Definition and scope

FEGLI provides group term life insurance to eligible federal civilian employees as a statutory benefit under Title 5 of the U.S. Code. Coverage is organized into four distinct components:

1. Basic Insurance — Automatically provided to eligible employees upon appointment unless waived. The Basic coverage amount equals the employee's annual base pay rounded up to the next $1,000, plus $2,000 (OPM FEGLI Handbook). The government pays one-third of the Basic premium; the employee pays two-thirds, deducted biweekly from salary.

2. Option A – Standard — An additional flat $10,000 of coverage. The employee pays the full premium, which increases with age.

3. Option B – Additional — Coverage in multiples of 1 through 5 times the employee's annual base pay (rounded up to the next $1,000). The employee pays the full premium, and costs escalate sharply at ages 35, 40, 45, 50, 55, 60, and 65.

4. Option C – Family — Coverage for the employee's spouse and eligible dependent children. Spouse coverage is available in multiples of 1 through 5 times $5,000 (up to $25,000); each eligible child is automatically covered at $2,500 per multiple elected.

Eligibility extends to most federal civilian employees working half-time or more in a position not excluded by statute. Temporary employees in positions lasting fewer than 1 year and intermittent employees are generally excluded from automatic enrollment (5 U.S.C. § 8716).

How it works

Upon entering a FEGLI-eligible position, an employee is automatically enrolled in Basic coverage. Opting into Options A, B, or C requires affirmative action within the first 60 days of employment. Outside that initial window, enrollment or increases in coverage ordinarily require a Qualifying Life Event (QLE) — such as marriage, divorce, or the birth of a child — or satisfactory evidence of insurability (a medical underwriting process).

Premium structure contrast — Basic vs. Option B:

Premium amounts for Option B and Option C are published in OPM's biweekly premium tables and adjust upward significantly after age 50. An employee at age 55 carrying 5× Option B coverage on a $100,000 salary pays materially more per pay period than the same employee at age 40 — a structural cost that causes some employees to reduce or waive Optional coverage before retirement.

At retirement, Basic coverage continues into retirement under three post-retirement reduction options:

• 75% Reduction — Coverage reduces by 2% per month after age 65 until 25% of the pre-retirement amount remains. No premium is charged after age 65 for this option.
• 50% Reduction — Coverage reduces to 50% of the pre-retirement amount. A small premium continues post-retirement.
• No Reduction — Full coverage amount is maintained, but the employee pays the highest continuing premium.

Options A, B, and C also carry post-retirement continuation provisions, but all Optional coverage under Option B reduces to zero at age 65 unless the employee elects paid continuation (OPM FEGLI Handbook, Chapter 7).

Common scenarios

Scenario 1: New hire, age 28, GS-9 ($49,025 base pay)
Automatic Basic enrollment yields approximately $51,000 in coverage ($49,025 rounded to $50,000 + $2,000). Adding 5× Option B produces an additional $245,000. Total coverage: approximately $296,000. The employee pays zero government premium for Optional coverage; OPM's biweekly rate tables show low per-pay-period costs at this age bracket.

Scenario 2: Mid-career employee, age 52, GS-14 ($122,530 base pay)
Option B at 5× equals $615,000 in additional coverage, but at age 52 the biweekly premium per $1,000 of coverage is significantly higher than at age 28. The employee may find that federal employee long-term care insurance or private-market term policies offer more cost-effective supplementation.

Scenario 3: Employee approaching retirement
The choice among the 75% Reduction, 50% Reduction, and No Reduction post-retirement options for Basic coverage is irrevocable once retirement begins. An employee who elects No Reduction to maintain estate-planning coverage must weigh the ongoing post-65 premium against the value of maintaining the full amount.

Scenario 4: Family coverage through Option C
An employee with a spouse and two dependent children electing 5 multiples of Option C secures $25,000 in spouse coverage and $12,500 per dependent child. Option C is one of the few life insurance mechanisms under FEGLI that extends protection beyond the employee themselves.

Decision boundaries

Several structural thresholds determine which FEGLI elections are available and when changes can be made:

1. 60-day initial enrollment window — The only period during which Optional coverage (Options A, B, C) can be added without medical underwriting. Missing this window limits future enrollment to QLEs or evidence of insurability review.

2. Open Season — OPM declares FEGLI Open Seasons infrequently and by separate regulatory action; unlike the Federal Employees Health Benefits Program, FEGLI does not have an annual open season.

3. Salary-linked coverage caps — Option B is capped at 5 times annual base pay. Employees whose coverage needs exceed this ceiling must look to private supplemental insurance outside the FEGLI program.

4. Age-based cost inflection — The Option B premium schedule creates a decision point at age 55–60 for many employees, where the cost per $1,000 of coverage begins to exceed comparable private-market term rates for the remaining working years.

5. Retirement irrevocability — Post-retirement reduction elections for Basic coverage cannot be changed after the retirement application is finalized. This makes the decision a permanent structural commitment with no correction mechanism.

6. Waiver and reinstatement rules — An employee who waives Basic coverage may only reinstate it by obtaining a medical examination and providing satisfactory evidence of insurability, or by experiencing a QLE that triggers an automatic reinstatement right under OPM regulations (5 C.F.R. Part 870).

Employees enrolled in the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS) — the two primary federal employee retirement systems — are both eligible for FEGLI, though retirement benefit calculations and survivor annuity options interact with life insurance needs differently under each system.