As a federal employee, you’ve likely relied on the Federal Employees’ Group Life Insurance (FEGLI) program throughout your career. But what happens to your coverage when you retire?
This blog explains your options and how to make informed decisions about FEGLI as you approach retirement.
Understanding FEGLI Coverage
FEGLI is a group term life insurance program available to most federal employees. It consists of:
- Basic Insurance
- Option A – Standard
- Option B – Additional (1–5x salary)
- Option C – Family Coverage
As long as you’re still working, the government pays one-third of the Basic coverage premium, and you pay the rest (plus full cost for any optional coverage).
FEGLI in Retirement: What You Need to Know
To keep your FEGLI in retirement, you must meet the following criteria:
- Be eligible to retire on an immediate annuity.
- Have been enrolled in FEGLI for at least 5 years immediately before retirement (or for your entire federal career if less than 5 years).
If you meet these requirements, here’s what happens:
Basic Coverage
- You choose between a 75% reduction, 50% reduction, or no reduction in coverage.
- 75% reduction: Premiums stop after age 65 (or retirement, if later), and your coverage reduces by 2% each month until it reaches 25% of the original amount—this option is free in retirement.
- No reduction: You continue paying higher premiums, but the full amount of coverage remains.
Option A
- Reduces to $2,500 after age 65 (or retirement, if later), with no further premium.
Option B and C
- You choose whether to keep full coverage or allow it to reduce by 2% per month for 50 months (until it reaches zero).
- If you choose no reduction, you’ll continue to pay full retiree rates, which increase with age.
Should You Keep FEGLI in Retirement?
FEGLI is term life insurance, meaning it gets more expensive as you age. Many retirees compare FEGLI rates to private permanent insurance, like guaranteed universal life, which may provide fixed premiums, lifetime coverage, and cash value options.
A personal consultation can help you evaluate:
- Cost vs. Benefit of keeping FEGLI options
- Alternative life insurance solutions
- Your family’s financial needs in retirement
Need Help Reviewing Your FEGLI Options?
We specialize in helping federal employees make confident decisions about FEGLI and overall retirement planning.
Book a Complimentary Retirement Session
We’ll break down your FEGLI choices, run cost comparisons, and help you decide what to keep, convert, or replace—so you retire with peace of mind.
