FEGLI Facts On Basic And Optional Coverage

Federal Employees’ Group Life Insurance (FEGLI) is the largest group life insurance program in the world, covering over 4 million federal employees and retirees. FEGLI can be broken into four components – Basic Insurance, Option A (Standard Optional Insurance), Option B (Additional Optional Insurance), and Option C (Family Optional Insurance).

Basic Insurance

You are automatically enrolled in Basic insurance when you are hired. You have the right to decline it, but most people don’t. Your Basic insurance amount equals your annual basic salary rounded up to the next $1,000 plus $2,000. So, if your salary is $61,500, your coverage would be ($62,000 + $2,000) $64,000. The government foots the bill for a third of the bi-weekly premiums and you pay the remainder. Your Basic policy also includes Accidental Death and Dismemberment coverage.

Option A (Standard Optional Insurance)

Option A gives any employee who is covered by Basic insurance the choice to purchase an additional $10,000 of life insurance coverage. Enrollment isn’t automatic, and you’ll pay the full amount of the premium, but keep in mind that the government has negotiated a lower rate than you would likely find on your own.

Option B (Standard Optional Insurance)

If you want a higher level of coverage than Option A allows, you can explore Option B. It lets you elect additional coverage amounts equal to one, two, three, four, or five times your rate of basic pay, rounded to the next higher $1,000. Just like Option A, enrollment in Option B is not automatic, you must be enrolled in Basic insurance to qualify, and you will pay the full premium.

Option C (Family Optional Insurance)

For those of you with families, Option C lets you purchase coverage for your spouse and any unmarried dependent children under age 22 (or, if age 22 or over, incapable of self-support before reaching age 22). You must be enrolled in Basic insurance to sign up for Option C, and the amount of coverage can be up to five multiples of $5,000 ($25,000) for a spouse and $2,500 for each eligible child. Note that with this insurance, you are the beneficiary, not the individual covered. As with the other optional insurance coverage, you will pay the full premium.

As you approach retirement, you should evaluate your current insurance coverage to ensure it’s sufficient and appropriate for your needs. A certified FRC® can provide an assessment to determine if the premiums you’re paying could be more effectively allocated within your retirement portfolio.