Basic Life Insurance (FEGLI) Explained

Did you know that your job as a federal or postal employee offers you access to one of the most widely used life insurance programs in the U.S.? The Federal Employees’ Group Life Insurance (FEGLI) program provides financial peace of mind for you and your loved ones. But how much do you really know about what FEGLI covers, and are you getting the most out of it?

Let’s break it all down so you can better understand your options and make decisions that suit your needs.

What Is Basic Life Insurance (FEGLI)?

FEGLI is the largest group life insurance program in the world, established to give federal and postal employees affordable life insurance options. The program offers several levels of coverage, starting with Basic, which is automatically available to eligible employees.

What Does Basic FEGLI Cover?
Basic coverage includes:

1. Your Annual Salary Rounded Up to the Next $1,000
   Plus an additional $2,000. For example, if you earn $47,500 per year, your Basic coverage would be $49,000 + $2,000, totaling $51,000.
2. Extra Benefits for Employees Under 45
   Younger employees receive an automatic doubling of the coverage amount at no additional cost. This added value decreases by 10% each year after age 35.
3. Accidental Death and Dismemberment (AD&D) Protection
   AD&D provides extra payments if you die or are seriously injured in an accident.

How Much Does Basic FEGLI Cost?

The cost of Basic FEGLI is shared between you and the federal government. You pay $0.15 for every $1,000 of coverage biweekly, while your agency covers any administrative expenses. This makes FEGLI Basic one of the most cost-effective life insurance options available.

Should You Stick with Basic FEGLI or Add More Coverage?

Basic FEGLI is a great starting point, but it might not fully meet your family’s needs. Here’s how to decide if you need additional coverage:

1. Evaluate Your Family’s Financial Needs
   Ask yourself: If something happens to me, will my family have enough to cover daily expenses, debts, and future plans like college tuition?
2. Understand Optional Coverage
   FEGLI also offers optional plans, including:
   • Option A: Standard
     Adds $10,000 to your coverage.
   • Option B: Additional
     Lets you purchase up to five times your annual salary.
   • Option C: Family
     Covers your spouse and eligible children.
3. Compare with Private Life Insurance
   While FEGLI is convenient and affordable, private policies may provide greater flexibility and more competitive rates for long-term coverage.

What Happens to FEGLI After You Retire?

Many federal employees worry about losing their FEGLI benefits after retiring. The good news is that if you meet specific criteria, you can carry Basic coverage into retirement.

Here’s how it works:

• You must have been enrolled in FEGLI for at least five years before retirement.
• Your premiums will depend on the level of coverage you select. For example:
  • 75% Reduction Option: Your coverage decreases by 75% after age 65, but there are no premiums after this age.
  • 50% Reduction Option: Your coverage decreases by 50% but comes with a small premium.
  • No Reduction Option: Your coverage amount stays the same, though premiums are higher.

This flexibility allows you to customize your post-retirement coverage based on your family’s needs and budget.

Key Benefits of FEGLI Basic Life Insurance for Federal Employees

1. Automatic Enrollment
   If you’re eligible, you’re automatically enrolled in Basic FEGLI unless you opt out.
2. No Medical Exams
   Unlike many private life insurance plans, FEGLI doesn’t require a medical exam, making it accessible for employees with pre-existing health conditions.
3. Convenient Payroll Deductions
   Your premiums are automatically deducted from your paycheck, so you never have to worry about missing a payment.
4. Supplemental Coverage Options
   You can tailor your coverage by adding options that fit your family’s financial goals.

Common Questions About Basic FEGLI

Can I Change My FEGLI Coverage?
Yes, but only during life events like marriage, divorce, or the birth of a child, or during designated Open Seasons. Keep an eye on announcements to make adjustments when needed.

What Happens If I Leave Federal Service?
If you leave your federal job, your FEGLI coverage ends, though you may have the option to convert your policy to an individual one through a private insurer.

Take Action: Maximize Your FEGLI Benefits Today

Understanding FEGLI is the first step toward ensuring your family’s financial security. Take a moment to:

• Review your current coverage by checking your SF-50 form or contacting your HR department.
• Assess whether you need additional coverage based on your family’s needs.
• Explore private insurance options if you’re nearing retirement and want long-term coverage flexibility.

For expert advice and personalized support, visit The Benefit Coordinators. We’re here to help federal and postal employees like you make informed decisions about your benefits.

Ready to Learn More?

If you’re still unsure about your life insurance options, don’t wait! Contact us today to speak with a benefits expert who can guide you step-by-step. With the right information, you can confidently protect what matters most.