FEGLI Explained: How It Works
Plain English guide to FEGLI coverage types, premiums, enrollment, and what changes at retirement.
FEGLI provides group term life insurance for eligible federal employees and can continue into retirement when its requirements are met. It has no cash value, but coverage does not necessarily end after a fixed number of years.
The useful questions are how much coverage you have, which parts you can keep, how benefits and premiums change, and what the surviving household would need.
Start with your actual coverage record. Basic, Option A, Option B and Option C serve different purposes and follow different retirement rules.
What FEGLI Does
The Federal Employees’ Group Life Insurance program provides a death benefit under its coverage rules. Basic coverage is generally automatic for eligible employees unless waived; Optional insurance requires an election and Basic coverage. Not every federal position is eligible. Source: OPM FEGLI Overview
For most nonpostal employees, the government pays one third of Basic premiums and the employee pays two thirds. Employees pay the full cost of Optional insurance. USPS generally pays the entire Basic employee premium for eligible postal employees. Do not assume the subsidy applies equally to every coverage type.
FEGLI has no savings account, surrender value or policy loan. A qualifying Living Benefit is a separate provision, explained below.
Know the Four Coverage Types
| Coverage | Who is insured | Coverage amount |
|---|---|---|
| Basic | Employee | Annual basic pay rounded up to a whole $1,000, plus $2,000; generally at least $10,000. |
| Option A: Standard | Employee | An additional $10,000. |
| Option B: Additional | Employee | One to five multiples of annual basic pay rounded up to a whole $1,000. The Basic $2,000 addition does not apply. |
| Option C: Family | Eligible spouse and eligible dependent children | Each of one to five multiples provides $5,000 for a spouse and $2,500 for each eligible child. |
Option C is coverage on family members, not additional insurance on the employee. Eligible children generally must be unmarried and under 22; certain disabled children can remain eligible. Verify the family eligibility rules. Source: OPM Coverage and Rates
Employees under 45 with Basic also receive an Extra Benefit at no additional premium. It doubles Basic through age 35, then decreases by 10% of the Basic amount each birthday from 36 through 45, when it ends. This is part of Basic, not a fifth coverage option. Source: OPM Extra Benefit
Accidental death and dismemberment coverage is included for employees under Basic and Option A, subject to separate conditions and exclusions. It does not continue as retiree coverage. Do not confuse AD&D with the age based Extra Benefit. Source: OPM Employee Booklet
Calculate Coverage Before Comparing It
Assume annual basic pay of $87,500. Round up to $88,000, then add $2,000: Basic is $90,000. Three Option B multiples add $264,000, calculated as $88,000 × 3.
At 40, the Extra Benefit is 50% of Basic, or $45,000. Basic plus Extra plus three Option B multiples totals $399,000. At 45, the Extra Benefit ends, leaving $354,000 if salary and elections remain unchanged.
If the employee also has Option A, add $10,000 to coverage on the employee. Two Option C multiples separately cover an eligible spouse for $10,000 and each eligible child for $5,000.
This example excludes AD&D, assumes ordinary eligible coverage and does not calculate premiums or claims. Basic at a $125,000 annual basic pay rate would be $127,000. A salary already at a whole $1,000 does not round to the next higher thousand.
Enrollment and Changes During Employment
Eligible new employees generally receive Basic unless waived and have 60 days to elect Optional insurance. Employees can generally reduce or cancel unassigned coverage at any time, but restoring it later requires an available enrollment route and eligibility. Source: OPM Enrollment
Qualifying life events, including marriage, divorce, acquisition of an eligible child or death of a spouse, can permit elections without medical evidence. Submit the election within 60 days of the event and confirm the applicable limits and effective dates. Source: OPM Life Event Elections
Other routes can include an OPM announced FEGLI Open Season, which is not annual, or satisfactory medical evidence under the program’s rules. Medical evidence is an employee route for Basic, Option A and Option B, not Option C. Do not assume ordinary FEHB Open Season permits a FEGLI increase. Source: OPM FEGLI Handbook
A later increase can affect how much Optional coverage qualifies for retirement continuation. Check the coverage history before changing multiples near retirement.
Retirement Continuation Is Not Automatic
Generally, you must be entitled to an immediate civilian annuity, carry qualifying coverage for the five years of service immediately before the annuity starts or all opportunities if fewer than five years, and not have converted to an individual policy. The requirement applies separately to Basic and each Optional type. The number of Optional multiples eligible to continue also matters. Source: OPM Continuation Requirements
You must retain Basic to retain Optional retiree coverage. Ask your agency to confirm eligibility for every coverage type and multiple before selecting retirement elections. FEGLI’s continuation requirements cannot simply be waived because coverage would be useful.
Postponed MRA+10 retirement can create a break in FEGLI, with eligible continuation when the annuity begins. Deferred retirement does not restore FEGLI. Confirm the retirement path rather than assuming a future pension guarantees life insurance continuation. Source: OPM Retirement Paths
Basic Coverage: Three Reduction Choices
| Election | How coverage changes | Premium treatment |
|---|---|---|
| 75% Reduction | Reduces by 2% of the original amount monthly until 25% remains. | Regular Basic premium before the applicable age 65 or retirement transition; afterward this coverage is premium free. |
| 50% Reduction | Reduces by 1% of the original amount monthly until 50% remains. | Regular Basic premium plus an additional premium initially; the additional premium continues after the regular premium stops. |
| No Reduction | Keeps the original Basic amount. | Regular Basic premium plus a larger additional premium initially; the additional premium continues afterward. |
For reducing Basic coverage, reductions begin in the second month after age 65 or retirement, whichever is later. Premiums for the 75% choice stop at the applicable transition while coverage is reducing; you do not wait until the final 25% amount is reached. Source: OPM Basic Retirement Choices
A 50% or No Reduction choice costs more because it preserves more coverage. Compare that benefit with the survivor’s needs, other resources and insurance availability. None is automatically the best choice for most households.
Options A, B and C Follow Different Rules
| Coverage | Reduction treatment | Premium and decision |
|---|---|---|
| Option A | Automatically reduces by 2% of the original amount monthly until $2,500 remains. | No choice of reduction schedule. Premiums cease at the applicable age 65 or retirement transition. |
| Option B | Full Reduction multiples fall by 2% monthly for 50 months to zero; No Reduction multiples retain their amount. | Full Reduction becomes premium free during the reduction period. No Reduction retains age based premiums. |
| Option C | Full Reduction multiples fall by 2% monthly for 50 months to zero; No Reduction multiples retain their amount. | Full Reduction becomes premium free during the reduction period. No Reduction retains age based premiums. |
The current OPM retirement guide states that reductions begin in the second month after age 65 or retirement, whichever is later. For B and C, eligible multiples can be allocated between Full Reduction and No Reduction. Confirm the exact dates and deductions with OPM. Source: OPM Retirement Guide
Assume $102,000 Basic at retirement, the 75% Reduction choice and eligible Option A. After the reductions are complete, Basic is $25,500 and Option A is $2,500: $28,000 of coverage on the retiree remains.
This is not the amount immediately at age 65. Coverage reduces over time after the applicable start date. Any Option B Full Reduction multiples eventually reach zero; Option C covers family members separately.
Understand What You Can Change Later
Do not describe every FEGLI retirement election as irrevocable. Retirees can generally reduce or cancel unassigned coverage, and Basic 50% or No Reduction can be changed to 75% Reduction. Increasing coverage or reversing a reduction is generally restricted. Source: OPM Retiree Coverage Changes
Optional elections have their own change rules, including any age 65 election notice and effective date. Confirm the rule for the specific option before assuming you can switch in either direction. Assignment of insurance can limit who has authority to make changes.
Use the current continuation form or retirement application instructions and keep copies of elections and confirmations. A premium deduction alone does not establish that every election was recorded correctly.
Start With the Survivor’s Needs
Identify the purpose of the benefit: replacing income, paying debts, supporting dependents, covering final expenses or preserving a legacy. Then compare the amount and duration needed with the coverage that will remain.
Include survivor pension income, Social Security, accessible assets and other insurance. Life insurance generally pays a lump sum; a pension survivor annuity supplies recurring income. They are different tools.
FEGLI cannot substitute for the pension survivor entitlement needed to continue a surviving spouse’s FEHB. Confirm family enrollment and survivor eligibility separately. Source: OPM Survivor Benefits
If considering private insurance, compare an actual offer, underwriting, premiums, duration, exclusions and guarantees with FEGLI. Health can affect availability. Keep existing protection until replacement coverage is issued, accepted and effective, and review any replacement requirements.
Check FEGLI beneficiary records using SF 2823 where appropriate. Assignment, court orders and statutory payment rules can affect who receives the benefit. Review records after family changes rather than relying on assumptions.
No Cash Value Does Not Mean No Living Benefit
FEGLI has no cash surrender value or policy loan. However, eligible terminally ill insured people with a documented life expectancy of nine months or less may elect a Living Benefit from Basic coverage under OPM’s rules. It changes the Basic benefit available afterward; it is not extra insurance. Source: OPM Living Benefits
Employees can elect a full or partial Living Benefit, while annuitants and compensationers can elect only a full one. Assignment can prevent an election. Confirm eligibility and claim instructions with OFEGLI.
When coverage terminates under qualifying circumstances, conversion to an individual policy may be available without a medical examination. Deadlines and eligible coverage matter. A retirement reduction alone does not create a conversion privilege; review the notice and OPM’s rules. Source: OPM Conversion
Prepare for a Useful Coverage Review
Bring your coverage codes and election records, annual basic pay, current deductions, Optional multiples, coverage history and beneficiary information. If retirement is near, include OPM calculator estimates for the choices you are considering.
Write down who needs protection, the expenses or income the benefit should cover, how long that need may last and which other resources are available. These facts make a coverage comparison useful.
See the Complete Guide to Federal Retirement for the connected benefit picture.
What would your household need if one income ended?
The complimentary Wealthspan Review™ is an approximately 45 minute conversation using an Asset Map to organize your income, accounts, benefits, insurance and household priorities. Together, we identify the connections and questions that deserve attention. Personalized coverage recommendations, policy comparisons and detailed retirement planning require a subsequent engagement.
Complimentary · Approximately 45 minutes. Requests are reviewed to ensure fit. Have your coverage records and account statements available if possible.
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Frequently Asked Questions
How is Basic FEGLI calculated?
Generally, round annual basic pay up to a whole $1,000 and add $2,000, with a minimum Basic amount of $10,000. At $87,500 annual basic pay, Basic is $90,000. Option B uses rounded pay without the Basic $2,000 addition.
What does Option C cover?
Option C covers an eligible spouse and eligible dependent children. Each multiple provides $5,000 for the spouse and $2,500 for each eligible child, up to five multiples. It does not add coverage on the employee.
Can I automatically keep every FEGLI option in retirement?
No. Continuation eligibility applies separately to Basic and each Optional type, including qualifying multiples. You generally need an eligible immediate annuity and the required coverage history. Retaining Basic is necessary to retain Optional coverage.
Does coverage immediately fall to 25% when I turn 65?
No. Under Basic 75% Reduction, coverage reduces monthly after the applicable start date until 25% remains. Reductions begin in the second month after age 65 or retirement, whichever is later.
Do Option B Full Reduction premiums continue until coverage reaches zero?
No. Full Reduction coverage becomes premium free at the applicable age 65 or retirement transition while the benefit reduces over 50 months. No Reduction multiples retain age based premiums.
Is the 75% Basic reduction always the best choice?
No. It preserves less coverage at a lower ongoing premium. Compare the survivor’s needs, other resources, insurance availability and the amount remaining under each choice before deciding.
Are all FEGLI retirement choices irrevocable?
No. Certain reductions and cancellations are permitted, and Basic 50% or No Reduction can be changed to 75% Reduction. Increasing or restoring coverage is restricted. Confirm the specific option’s rules with OPM.
Does FEGLI have a two year suicide exclusion?
No. OPM states that FEGLI life insurance benefits are payable regardless of the cause or location of death. Accidental death benefits do not pay for suicide because it is not an accidental death. Other beneficiary payment restrictions can apply.
Can I borrow from FEGLI or receive a Living Benefit?
FEGLI has no cash value or policy loan. A separate Living Benefit provision may allow eligible terminally ill insured people to receive Basic benefits before death under specific conditions. This changes the remaining Basic death benefit.
Does the Wealthspan Review recommend a FEGLI election?
The complimentary Review organizes your financial and protection picture and identifies priority questions. Personalized coverage recommendations and policy comparisons require further work. OPM and your agency determine FEGLI eligibility and applicable elections.
The cause of death explanation above follows OPM guidance. Source: OPM Claims Guidance
This article summarizes OPM FEGLI guidance reviewed September 30, 2026. Verify coverage, premiums, continuation eligibility, reduction dates and election changes with your agency benefits office or OPM. OFEGLI administers claims. Assignment, court orders, employment status and individual circumstances can affect coverage and payment. Examples are hypothetical and are not premium quotes, claims determinations or recommended elections.
This content is for general educational purposes only. It does not constitute personalized financial, insurance, or retirement advice. Federal employees should consult OPM representatives and qualified financial professionals regarding their specific FEGLI elections and retirement planning decisions.