Life Insurance
for Federal Employees
Most working Americans today carry some amount of group life
insurance offered by their employer. That is also true for employees
of the federal government. The government insurance plan is known
as the Federal Employees Group Life Insurance Program and is
commonly referred to as FEGLI.
According to the US Government, “the purpose of the Federal
Employees Group Life Insurance program is to provide federal
employees, retirees and their families with access to life insurance
benefits coverage to help meet their individual insurance needs,
and the federal government's recruitment and retention needs.”
The FEGLI program is the world’s largest group life insurance
plan and offers several different coverage options to eligible
employees. The following information covers some of the major
features of the Federal Employees Group Life Insurance program.
Federal
Employees Group Life Insurance Overview
The Federal Employees Group Life Insurance program is underwritten
by a group of several large private insurance companies. It offers
group term life insurance to all eligible employees including
part-time workers and currently insures over 4 million federal
employees.
FEGLI
Coverage Choices
The FEGLI program offers multiple plan options including Basic
Insurance as well as 3 additional levels of Optional
Insurance: Standard (Option A) , Additional (Option B) and
Family (Option C).
Basic Insurance
The Basic Insurance option
begins on the first day of service and is automatic unless you
opt-out or waive coverage. The Basic
Insurance Amount (BIA) is
calculated based on your annual base pay rounded up to the nearest
$1,000 plus an additional $2,000. The federal government pays
1/3 of the premium while you pay the remaining 2/3 premium. The
bi-weekly employee cost for basic insurance is $0.15 per $1,000
of insurance or $0.325 per $1,000 on a monthly basis. Basic coverage
never increases in price as long as employee eligibility is maintained.
Any employee carrying basic insurance that is under the age
of 45, will automatically have a multiple of additional insurance
at no additional cost. For more information see the FEGLI
Booklet.
Optional Insurance
Optional insurance plans offered by FEGLI include: Standard
(Option A), Additional (Option
B) and Family Coverage (Option C). Optional coverage
is paid for 100% by the employee. There is no premium contribution
from the federal government.
Standard (Option A) Insurance
The Standard Insurance (Option
A) is only available if you have the Basic
Insurance option. To qualify for Option A coverage,
you must enroll within the first 31 days of employment. Otherwise,
if you wish to add it later, you will have to prove your good
health to qualify as there is rarely an open
season for enrollment.
Standard optional insurance provides $10,000 of life insurance
coverage. The costs will vary based on your age and rates will
increase every five years beginning at age 35. Actual costs for
Option A coverage can be found in the FEGLI
Handbook under cost information.
Additional (Option B) Insurance
Additional Insurance (Option B) is
also only available if you have Basic
Insurance and you must elect the coverage within the first
31 days of service to avoid proving your health. Option B coverage
is available in multiples up to 5 times your annual pay. In other
words, you can choose 1,2,3,4 or 5 times your annual pay (rounded
up to the next $1,000) in additional insurance.
Costs for Option B coverage are based on rates that will increase
every 5 years beginning at age 35. Age bands for Option B coverage
are as follows: under age 35, 35 through 39, 40 through 44, 45
through 49, 50 through 54, 55 through 59, 60 through 64, 65 through
69, 70 through 74, 75 through 79 and ages 80 and older.
Generally speaking, the cost for Option B insurance is reasonable
up to age 45. However, if you are over age 45 and in better than
average health, there is a strong likelihood that low cost level
term life insurance offered through the open market will be more
cost effective. Once you reach age 55, the costs for Option B
are excessive even if you are in only average health. For a chart
detailing the specific cost information for Additional Option
B insurance see, the FEGLI
Handbook.
Family Insurance (Option C)
Family Insurance (Option C) is
elective coverage that provides life insurance for your spouse
and all dependent children. As with Option A and Option B insurance,
you must elect Option C coverage within the first 31 days of
employment to avoid proving your health. With Option C insurance,
you may choose coverage levels in multiples of 1, 2, 3, 4 or
5. Each multiple of coverage equals $5,000 for your spouse and
$2,500 for each eligible dependent child. Normally, a child’s
eligibility ends at marriage or age 22 whichever comes first,
but there may be exceptions.
The cost for Family Insurance works in much the same way as
Option B insurance. Premiums increase every 5 years based on
age bands. For the exact cost of Family coverage see, “How
Much Does Option C Cost?”.
Other
FEGLI Program Benefits
The Federal Employee’s Group Life Insurance plan also
provides accidental death and dismemberment (AD & D) coverage
automatically with both Basic Insurance as
well as with Standard Insurance.
There is no additional cost for AD & D insurance. Coverage
with basic insurance equals the one time annual pay rounded to
the next $1,000. The AD & D benefit under the standard option
is equal to $10,000. There are no AD & D benefits with Option
B or Option C.
For information on how AD & D benefits are paid and what
is covered see, accidental
death and dismemberment benefits in the FEGLI Handbook.
Conclusion
The FEGLI insurance program provides valuable group term life
insurance protection for eligible employees as well as optional
spousal and dependent children coverage. At younger age groups,
under age 45, coverage is especially good because costs are relatively
low and the federal government provides extra benefits at no
charge. However, at age 45 and beyond,
FEGLI coverage is not as competitively priced as ordinary term
life and has some shortcomings. For a custom price comparison, get
a quote here or call MEG Financial
today at (877) 583-3955. You can also get more information
about the Federal Employees Group Life Insurance program by visiting
the links below.
 Related
Insurance Articles for a Federal Employee
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