Federal Employees Life Insurance (FEGLI)

The Federal Employees’ Group Life Insurance (FEGLI) Program, established on August 29, 1954, is the largest group life insurance program in the world. Serving over 4 million federal employees, retirees, and their families, FEGLI provides essential coverage with options tailored to meet individual and family needs.

The Federal Employees Group Life Insurance (FEGLI) Program is the world’s largest group life insurance initiative, with over four million enrollees, including more than 720,000 Department of Defense (DOD) employees as of December 2020. Representing 18% of total government-wide enrollments, FEGLI provides term life insurance coverage tailored for federal employees.

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Administered by the Office of Personnel Management (OPM) and supported by Metropolitan Life Insurance Company (MetLife) and the Office of Federal Employees’ Group Life Insurance (OFEGLI), the program offers a blend of Basic and Optional coverage options to meet diverse needs. With limited enrollment opportunities, FEGLI highlights the importance of timely education and guidance for eligible employees through HR practitioners, training programs, and policy updates.

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This blog will walk you through the essentials of FEGLI, including coverage types, costs, eligibility, and important considerations for federal employees and retirees.

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Understanding the Cost of FEGLI Basic Insurance

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Basic Insurance Coverage under the Federal Employees' Group Life Insurance (FEGLI) Program offers affordable and accessible protection for federal employees. The coverage amount, known as the Basic Insurance Amount (BIA), is calculated as follows:

• Your annual basic pay is rounded up to the next $1,000.
• An additional $2,000 is added to this total.

For instance, if your annual salary is $25,486, it is rounded to $26,000. Adding $2,000 brings your total coverage to $28,000.

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Cost Breakdown

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The cost of Basic Insurance is shared between you and the Government:

• Employee Contribution: $0.16 biweekly for every $1,000 of coverage.

For example, with $28,000 in coverage, your biweekly contribution would be $4.48 ($28 x $0.16).

• Government Contribution: The Government covers one-third of the total premium cost.

If your pay schedule is not biweekly, your contribution will be prorated and adjusted accordingly.

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What is The Federal Employees Group Life Insurance?

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Federal employees life insurance is a group term life insurance program offering federal employees affordable life insurance. Unlike permanent life insurance policies, FEGLI does not accumulate cash or paid-up value. It includes:

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Basic Life Insurance

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• Automatic Enrollment: Most new federal employees are automatically enrolled in Basic Life Insurance unless they explicitly waive it.
• Coverage Amount: The amount of coverage is typically a multiple of your annual salary.
• Cost-Sharing: The cost of Basic Life Insurance is shared between you and the government.

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Unlock Your Golden Years: A Brighter Financial Future for Federal Employees and Retirees

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Coverage Options Under FEGLI

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Best life insurance for federal employees can not be define just like that as, FEGLI offers a mix of Basic and Optional coverage, allowing flexibility in choosing insurance amounts.

1. Basic Life Insurance

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For federal employees, the federal employees life insurance Basic Insurance provides core life insurance coverage designed to support their needs both during their careers and into retirement.

This coverage is generally equal to an employee’s annual basic pay (rounded up to the next $1,000) plus an additional $2,000, with a minimum benefit of $10,000. Cost-sharing is available, with the government covering one-third of the premium while the employee pays the remaining two-thirds.

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Extra Benefits for Younger Employees  

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Federal employees life insurance Basic Insurance includes an Extra Benefit for employees under age 45. This additional coverage doubles the basic insurance amount until age 36 and then reduces by 10% each year, ending entirely at age 45. For younger employees, this feature provides enhanced security during crucial early career years.

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Accidental Death and Dismemberment (AD&D) Coverage  

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The Federal Employees Group Life Insurance Basic also includes Accidental Death and Dismemberment (AD&D) benefits, providing extra financial support in the event of accidental death or the loss of limbs or eyesight. These benefits, however, are exclusive to active employees and do not extend into retirement.

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Options for Retirees: Retaining or Adjusting Coverage  

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Federal employees who retire after maintaining their life insurance for federal employees benefits for five years or more are eligible to retain or modify their Basic Insurance in retirement. There are three main options available:

• 100% Coverage: Retirees can keep the full amount of their Basic Insurance, though premiums increase significantly.
• 50% Coverage: Retirees retain 50% of their Basic Insurance benefits, paying half the increased premium of the 100% option.
• 75% Reduction Option: A unique choice, the 75% reduction option allows a retiree under 65 to maintain the same premium payments until age 65. At that point, coverage reduces by 2% monthly, stopping at 25% of the original amount. This final benefit amount remains fixed for life without further cost to the retiree. This option allows retirees to retain lifetime coverage without the financial burden of increased premiums, making it a valuable choice for many entering retirement.

For federal employees, life insurance for federal employees Basic Insurance offers foundational coverage that grows alongside them, providing flexible options for secure, lasting protection well beyond their federal careers.

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2. Optional Insurance Options

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To elect optional insurance, employees must first have Basic coverage. The three options available are:

Option A: Standard Optional Insurance  

Option E in the Federal Employees' Group Life Insurance (FEGLI) program provides a specific level of coverage, in this case, $10,000. The cost of this coverage is determined by your age.   

Age-Based Premiums  

The premium for Option E increases as you age, reflecting the increased risk of mortality. This is a common practice in life insurance.   

Here's a breakdown of the age bands and their corresponding biweekly premiums:

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Important Considerations:

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• Age Band Transition: You'll move to the next age band on the pay period in which your birthday falls.
• Pay Period Adjustments: If you're not on a biweekly pay period, your premium will be prorated and rounded to the nearest cent.   
• Enrollment and Changes: You can enroll in or change your life insurance for federal employees coverage during open enrollment periods or due to qualifying life events.

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Option B: Additional Optional Insurance

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Option B coverage is available in 1, 2, 3, 4, or 5 multiples of your annual salary (rounded up to the nearest thousand). This coverage does not include the additional $2,000 provided with Basic Insurance. Costs vary based on age bands and increase as you enter a new band.

The age bands are as follows: 35, 40, 45, 50, 55, 60, 65, 70, 75, and 80. You are placed in a new age band during the pay period when your birthday occurs.

For individuals under 35, the cost is $0.02 per $1,000 of coverage every two weeks. If you are paid on a schedule other than biweekly, the deduction from your pay will be adjusted proportionately to the nearest one-tenth of a cent.

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Option C: Family Optional Insurance

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Option C provides life insurance coverage for your spouse and eligible dependent children. When you choose Option C, all eligible family members are automatically covered. You can select 1, 2, 3, 4, or 5 multiples of coverage. Each multiple equals $5,000 for your spouse and $2,500 for each eligible dependent child.

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For example, selecting 3 multiples provides $15,000 of coverage for your spouse and $7,500 for each dependent child. The cost is based on your age, not the age of your family members, and it increases as you enter a new age band.

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The age bands are: 35, 40, 45, 50, 55, 60, 65, 70, 75, and 80. You move to the next age band during the pay period in which your birthday occurs. For instance, if you are under 35 and select 3 multiples, the cost is $0.20 per multiple, totalling $0.60.

Each multiple applies equally to your spouse and each child. For instance, electing 2 multiples means both your spouse and each dependent child have 2 multiples of coverage. You cannot choose a different number of multiples for your spouse and children.

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To calculate the total cost of your life insurance, combine the costs of Basic coverage and any Optional coverage you select.

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Eligibility and Enrollment  

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Who is Eligible?  

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Most federal employees are automatically covered by Basic Life Insurance unless they waive it. Optional coverage requires proactive enrollment.

Enrollment Opportunities

• New Hire Period: Automatically enrolled in Basic Life Insurance. Optional coverage must be elected within 60 days.
• Qualifying Life Events (QLEs): Such as marriage, birth, or death.
• Request for Insurance (SF-2822): Approved within a 60-day window.
• FEGLI Open Seasons: Rarely held, these periods allow employees to make changes to coverage.

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FEGLI for Federal Retirees  

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Retirees can maintain federal employees group life insurance coverage if they meet specific requirements at retirement. The Office of Personnel Management (OPM) can verify a retiree’s enrollment status.

Benefits for Retirees  

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Retirees can continue Basic and selected Optional coverage into retirement. However, accidental death and dismemberment coverage is only available for active employees.

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Order of Precedence for Life Insurance Benefits

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In the event of a claim, FEGLI benefits are paid according to a statutory order of precedence:

• Designated beneficiary.
• Surviving spouse (if no beneficiary).
• Children and descendants of deceased children.
• Surviving parents.
• Executor/administrator of the estate.
• Next of kin as determined by state laws.

Exceptions apply for assigned coverage or court orders specifying a different order.

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How to claim group life insurance?  

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1. Gather the Required Documents  

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You will need the policy number, a certified copy of the death certificate, and any other relevant information. The original death certificate will be required once it becomes available. Additionally, you’ll need to provide information about the deceased employee, including their date of birth, National Insurance number, and the cause of death.

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2. Contact the Insurance Provider  

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Reach out to the insurance company promptly to initiate the claim process. They will guide you through the specific steps and requirements.

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3. Complete the Claim Forms  

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The insurance company will supply claim forms that need to be completed. These forms will request details about the deceased employee, the beneficiaries, and their relationship to the employee.

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4. Submit the Claim Forms  

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Send in the completed claim forms as soon as possible to proceed with the claim process.

Conclusion

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The federal employees group life insurance program offers valuable life insurance options tailored for federal employees and retirees. By understanding the program’s features, costs, and benefits, you can make informed decisions to secure financial protection for yourself and your loved ones.