On August 29, 1954, the Federal Employees’ Group Life Insurance (FEGLI) Program was created. With coverage for almost 4 million Federal workers and retirees as well as many of their family members, it is the biggest group life insurance program in the world.
The majority of workers qualify for FEGLI insurance. FEGLI offers term life insurance for groups. It does not accrue any cash value or paid-up value as a result. FEGLI coverage includes three alternatives (A, B, and C) in addition to basic life insurance coverage. To choose any of the optional coverage, you must have Basic insurance.
The government and the employee split the expense of Basic Federal Employee Insurance. The cost of Basic insurance is not impacted by age. Options A, B, and C are entirely covered by the employee and do not have any shared expenses.
Under a contract with the Office of Personnel Management, the Metropolitan Life Insurance Company (MetLife) is in charge of overseeing the whole program (OPM). Federal Employees’ Group Life Insurance Office (OFEGLI)
FEGLI Basic Life Insurance
Basic Coverage Amount for FEGLI
The yearly basic salary of a federal employee, rounded to the nearest thousand plus two thousand, determines the FEGLI Basic coverage amount. Cost of Living Adjustment (COLA) is not included in this. $10,000 is the minimal amount of basic life insurance for anyone earning $8,000 or less. Basic life insurance costs 15 cents every two weeks or 32.5 cents per thousand per month; postal workers are exempt from this fee.
FEGLI Life Insurance: Additional Advantage
You are qualified for the Extra Benefit option if you are 44 years of age or younger. Your Basic Life Insurance amount is multiplied by an age multiplier to determine the amount of this benefit (see table below). The coverage amount at your present age is then calculated by adding this amount to your Basic Life Insurance.
The baseline additional benefit insurance amount’s multiplication factor decreases by 10% year starting at age 36. At age45, the additional benefit expires.
| Age | Factor |
|---|---|
| 35 and Under | 1.0 |
| 36 | 0.9 |
| 37 | 0.8 |
| 38 | 0.7 |
| 39 | 0.6 |
| 40 | 0.5 |
| 41 | 0.4 |
| 42 | 0.3 |
| 43 | 0.2 |
| 44 | 0.1 |
FEGLI Selections
To be qualified for any of FEGLI’s three optional insurance products—Option A (Standard Optional Insurance), Option B (Additional Optional Insurance), and Option C (Family Optional Insurance)—you must have Basic Life Insurance coverage. You are required to proactively choose your optional coverage and to fund the entire cost of any coverage you decide to add.
FEGLI Option A (Standard Optional Insurance):
This option provides an additional $10,000 in coverage. The following table lists the expenses:
| Age Group | Bi-Weekly | Monthly |
|---|---|---|
| Under 35 | $0.20 | $.43 |
| 35-39 | $0.30 | $0.65 |
| 40-44 | $0.40 | $0.87 |
| 45-49 | $0.70 | $1.52 |
| 50-54 | $1.10 | $2.38 |
| 55-59 | $2.00 | $4.33 |
| 60 and over | $6.00 | $13.00 |
Option B (Additional Optional Insurance) of the FEGLI
The federal employee may choose to add up to five times their base income, rounded to the nearest thousand, in supplemental coverage under FEGLI Option B (supplemental Optional Insurance). The whole amount is due from the employee. The cost is determined by the age of the employee and is expressed in thousand dollars of coverage. Expenses rise every five years starting at age 35. View the chart below.
The following table lists the withholding charges per $1,000:
| Age Group | Bi-Weekly | Monthly |
|---|---|---|
| Under 35 | $0.02 | $.043 |
| 35-39 | $0.03 | $0.065 |
| 40-44 | $0.04 | $0.087 |
| 45-49 | $0.07 | $0.152 |
| 50-54 | $0.11 | $0.238 |
| 55-59 | $0.20 | $0.433 |
| 60-64 | $0.44 | $0.953 |
| 65-69 | $0.54 | $1.170 |
| 70-74 | $0.96 | $2.080 |
| 75-79 | $1.80 | $3.900 |
| 80+ | $2.64 | $5.720 |
Over time, FEGLI Option B costs may become prohibitively high. In order to possibly save costs, it is always vital to consider all of the possibilities available.
Comparison of FEGLI Option B
Here is an illustration of the possible cost reductions and a comparison of FEGLI Option B. Let’s use Jane Smith, a 45-year-old female federal employee who is in excellent health. Jane has five times selected Option B and her base pay is $50,001. In this case, Option B’s total coverage is $255,000. The chart below displays the costs of this coverage over time as well as as of right now:
| Age Group | Bi-Weekly Factor | Bi-Weekly Cost | Monthly Factor | Monthly Cost |
|---|---|---|---|---|
| 45-49 | .08 | 20.40 | .173 | 44.12 |
| 50-54 | .13 | 33.15 | .282 | 71.91 |
| 55-59 | .23 | 58.65 | .498 | 126.99 |
| 60-64 | .52 | 132.60 | 1.127 | 287.39 |
| 65-69 | .62 | 158.10 | 1.343 | 342.47 |
| 70-74 | 1.14 | 290.70 | 2.470 | 629.85 |
| 80+ | 2.40 | 612.00 | 5.200 | 1,326.00 |
Jane will spend a total of $31,824.60 over the next 20 years and $112,042.80 over the next 30.
Jane can save roughly $25,000 over the next 20 years and $96,000 over the next 30 years by comparing these expenses to those of a highly regarded insurance firm over the same time period.
To receive a FREE analysis, find out which alternatives you might be eligible for, and view your comparison, click this link.
Family Optional Insurance, or FEGLI Option C:
The federal employee may choose to provide coverage for their spouse and dependent children (spouse, acknowledged natural children, adopted children, or stepchildren who reside with you or are receiving significant assistance from you) under FEGLI Option C (Family Optional Insurance). A kid must be under 22 and single to be eligible for coverage, or if they are older, they must be unable to support themselves due to a medical or mental illness that they had before turning 22.
You may choose $5,000 in coverage for your spouse and $2,500 for each kid. The federal worker is allowed to choose up to five (5) coverage units.
The number of units selected and the age of the government employee determine the costs. Expenses rise every five years starting at age 35. View the chart below:
| Age Group | Bi-Weekly | Monthly |
|---|---|---|
| Under 35 | $0.22 | $.48 |
| 35-39 | $0.29 | $0.63 |
| 40-44 | $0.42 | $0.91 |
| 45-49 | $0.63 | $1.37 |
| 50-54 | $0.94 | $2.04 |
| 55-59 | $1.52 | $3.29 |
| 60-64 | $2.70 | $5.85 |
| 65-69 | $3.14 | $6.80 |
| 70-74 | $3.60 | $7.80 |
| 75-79 | $4.80 | $10.40 |
| 80+ | $6.60 | $14.30 |
Retirement Benefits from the Federal Government
We at American Benefits Exchange assist Federal Employees in comprehending their benefits and alternative private sector possibilities. Our staff will examine your particular objectives and give you choices that can assist you in achieving them.
The Essential Information Regarding Federal Government Retirement
When you retire as a government employee, you will have a lot of possibilities. These choices take effect on the first of the month that follows the month that you turn 65 or, if that occurs later, retire. Your rates stay the same under the 75% Reduction Plan; the 50% Reduction and No Reduction Plans have higher premiums.
75% Reduction Plan: The amount of your FEGLI drops by 2% every month once you retire or turn 65, until you have achieved 25% of the value of your Basic Life insurance. Up to the age of 65, you will pay the same premium as current employees. After that, your insurance will be free.
50% decrease: If coverage hits 50% of the base policy value, there will be a monthly decrease of 1% starting at age 65. The smaller decrease has a higher premium ($.71 for $1,000 of coverage beyond age 65 and $1.035 per $1,000 of coverage up to that point).
No Reduction: This option entails paying a higher premium ($2.455).
Standard Optional Insurance, or Option A:
After you reach retirement age or become 65, Option A (Standard Optional Insurance) coverage is no longer available. Starting in the month after your 65th birthday or retirement, whichever comes first, coverage will be lowered by 2% each month until it equals 25% of the pre-retirement level. There are no reduction plans available to you.
Option B: (Additional Insurance Options)
After you become 65, Option B (Additional Optional Insurance) is free. After that, for 50 months, your coverage will decline at a rate of 2 percent every month until it ends. When it comes time for you to retire, you can choose to keep your coverage in place. After that, you’ll have to pay the monthly premiums. You can call off this election.
Family Optional Insurance, Option C:
After you become 65, Option C, or Family Optional Insurance, is free. After that, for 50 months, your coverage will decline at a rate of 2 percent every month until it ends. When it comes time for you to retire, you can choose to keep your coverage in place. After that, you’ll have to pay the monthly premiums. This election may be canceled at a later time.
ABX has no affiliation with the national administration.
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