FEGLI Guide 2026: How Federal Life Insurance Works (And What It Really Costs)

Last Updated: March 9, 2026 Reading Time: 12 min

Most federal employees enrolled in FEGLI as new hires without reading the fine print. That is understandable. But if you have been a fed for more than 15 years and have never reviewed your life insurance, there is a good chance you are either overpaying for Option B or leaving the 75% Basic reduction on the table at retirement.

This guide covers everything: how FEGLI works, what each option actually costs at every age, when it makes sense to keep it, and how to avoid the "over-insurance trap" that costs thousands of federal employees tens of thousands of dollars.

Key Takeaways

• FEGLI Basic is subsidized by the government (you pay only two-thirds) and is worth keeping for your entire career
• FEGLI Option B premiums increase 20-fold between ages 35 and 60 for the same coverage amount
• The optimal window to switch from Option B to private term life insurance is ages 45-50
• At retirement, elect the 75% reduction on Basic: coverage drops to 25%, but becomes completely free after age 65
• FEGLI has no annual open season. Outside of a new hire window or qualifying life event, changing coverage requires passing a physical exam

What FEGLI Is (And Is Not)

FEGLI, the Federal Employees' Group Life Insurance program, is a group life insurance program administered by the Office of Personnel Management and underwritten by MetLife. It is not optional on day one. You are automatically enrolled in Basic coverage when you start a federal job, and you have 60 days to add or waive optional coverage.

FEGLI is group term life insurance, which means:

• No cash value or investment component
• Premiums are based on age brackets, not your individual health (except for physical exam enrollments)
• Coverage ends if you separate from federal service, unless you convert it or retire on an immediate annuity

FEGLI is not a retirement account, not a savings vehicle, and not a substitute for FERS or TSP planning. It is pure death benefit insurance.

The Four FEGLI Coverage Types

Basic Insurance

Basic is the foundation of FEGLI and the only coverage the government subsidizes.

How it works:

• Coverage amount: your annual salary rounded up to the nearest $1,000, plus $2,000
• The government pays one-third of the premium
• You pay the remaining two-thirds
• Current rate: $0.16 biweekly per $1,000 of coverage (employee share)

Example: A federal employee earning $87,000/year gets $89,000 in Basic coverage. At $0.16 biweekly per $1,000, they pay about $14.24 per biweekly paycheck.

The Extra Benefit: If you die before age 36, Basic pays double your coverage amount. The doubling phases out by 10% per year from ages 36-45. After 45, you just get the base amount.

Verdict: Keep Basic. The government subsidy makes it genuinely valuable. Never waive it unless you have a specific financial reason.

Option A (Standard)

A flat $10,000 of additional coverage. Premiums are age-based but relatively modest.

Option A Biweekly Premiums:

Age Band	Biweekly Premium
Under 35	$0.20
35-39	$0.40
40-44	$0.60
45-49	$1.20
50-54	$2.00
55-59	$3.20
60-64	$4.40
65+	$6.00

At $10,000 of coverage, Option A is cheap enough to keep at most ages. A 55-year-old pays $3.20 biweekly ($83/year) for $10,000 of additional coverage. That is reasonable.

Verdict: Option A is affordable at most ages. Many employees keep it through retirement.

Option B (Additional)

This is where FEGLI gets complicated and expensive. Option B lets you elect 1x, 2x, 3x, 4x, or 5x your annual salary in additional coverage. Premiums reset every five years as you move into a new age band.

See the full cost breakdown in the next section.

Verdict: Requires active management. Cheap when young, expensive by 55+.

Option C (Family)

Coverage for your spouse ($5,000 per multiple) and eligible children ($2,500 per multiple per child). You can elect 1-5 multiples.

Option C Biweekly Premiums (per multiple):

Age Band	Biweekly Premium
Under 35	$0.20
35-39	$0.46
40-44	$0.72
45-49	$1.28
50-54	$2.00
55-59	$3.60
60-64	$5.20
65+	$7.80

Example: At 3 multiples, a 45-year-old covers their spouse for $15,000 and each child for $7,500 at $1.28 x 3 = $3.84 biweekly ($100/year). That is reasonable if you have dependents.

Verdict: Worth evaluating if you have a spouse or children without other life insurance coverage. Review at each age band jump.

FEGLI Option B Premiums by Age: The Full Picture

This is where most federal employees get surprised. Option B premiums look trivial at age 30 but become significant by age 55 and punishing by age 65.

Option B Biweekly Rate per $1,000 of Coverage

Age Band	Biweekly Rate	Annual Cost per $100K	Annual Cost for $500K (5x on $100K)
Under 35	$0.02	$52	$260
35-39	$0.02	$52	$260
40-44	$0.03	$78	$390
45-49	$0.06	$156	$780
50-54	$0.10	$260	$1,300
55-59	$0.18	$468	$2,340
60-64	$0.40	$1,040	$5,200
65-69	$0.48	$1,248	$6,240
70-74	$0.86	$2,236	$11,180
75-79	$1.80	$4,680	$23,400
80+	$2.88	$7,488	$37,440

Source: OPM FEGLI Premium Tables

What This Looks Like in Monthly Dollars

For a federal employee with a $100,000 salary carrying 5x Option B ($500,000 coverage):

Age	Monthly Cost	Annual Cost	vs Age 35
35	$22	$260	Baseline
45	$65	$780	3x higher
50	$108	$1,300	5x higher
55	$195	$2,340	9x higher
60	$433	$5,200	20x higher
65	$520	$6,240	24x higher
70	$932	$11,180	43x higher

The premiums do not gradually creep up. They jump. From 55 to 60, the monthly cost goes from $195 to $433 for the same coverage. That one age-band shift alone adds $2,860 per year to your insurance costs.

The Over-Insurance Trap: Why Most Feds Pay Too Much

Here is what happens to most federal employees:

1. You start your career and enroll in 5x Option B because it costs $22/month. Barely noticeable.
2. You get busy with work, promotions, and life. FEGLI goes on autopilot.
3. At age 55, you look at your pay stub and see $195/month going to life insurance.
4. You check private insurance. A 20-year term policy at 55 costs $130-$160/month.
5. But your kids are grown, your mortgage is almost paid off, and your spouse has their own income.
6. You realize you have been paying for $500,000 of coverage you may not even need anymore.

The trap is not just the premium increase. It is paying for coverage that no longer matches your actual financial obligations.

The over-insurance occurs when:

• Your children are grown and financially independent
• Your mortgage is paid or nearly paid
• Your spouse has their own retirement income (FERS pension, TSP, Social Security)
• Your net worth has grown to where survivors could manage without a large death benefit

Most federal employees need maximum life insurance in their 30s and 40s, when obligations are high and savings are still building. By 55-60, many have enough assets and reduced obligations that $500,000 of coverage is genuinely excessive.

The Critical Window: Ages 45-50

If you are between 45 and 50 and have Option B, this is the most important section for you.

Why 45-50 is the right time to evaluate:

• Option B premiums are starting to climb (you are at $65-$108/month) but not yet punishing
• You are still young enough to qualify for competitive private term rates
• A 20-year term policy would cover you to age 65-70, when you are likely retired and have reduced insurance needs
• After 50, both private and FEGLI rates rise steeply

What to do:

1. Assess your actual coverage need. Add up your mortgage balance, spouse income shortfall if you died, remaining child dependency years, and desired estate transfer. That is your real coverage need.
2. Get private term quotes. Use any major insurance marketplace (Policygenius, SelectQuote, Haven Life). Get quotes for the exact coverage you need on a 15 or 20-year term.
3. Compare the 20-year total cost. Calculate what FEGLI Option B will cost from now to age 65 versus locking in a private term rate today.
4. Apply first, cancel second. Never drop FEGLI coverage until your private policy is fully approved and you have paid your first premium.
5. Keep Basic, always. The decision to switch applies only to Option B (and possibly Option C). Keep Basic regardless.

Private term rates for healthy non-smokers ($500,000, 20-year term):

Age	Approximate Monthly Premium
45	$55-75
50	$77-100
55	$130-160

A 45-year-old who locks in $75/month for 20 years pays $18,000 total. FEGLI Option B from ages 45 to 65 on the same coverage would cost roughly $34,000+, and that assumes no rate increases.

When FEGLI Beats Private Insurance

Switching to private term is not the right move for everyone. FEGLI is the better choice in these situations:

You Have Pre-Existing Health Conditions

FEGLI is guaranteed issue with no medical underwriting during your initial enrollment window or qualifying life events. Private insurance medically underwrites every applicant.

If you have diabetes, a heart condition, cancer history, obesity, or other conditions, you may face:

• 25-50% higher premiums on private policies
• Policy exclusions for specific conditions
• Denial for coverage

FEGLI does not care. Everyone pays the same age-banded rate.

You Are a Smoker

Private insurers charge smokers 200-300% more than non-smokers for identical coverage. FEGLI charges everyone the same premium regardless of tobacco use. If you smoke, FEGLI Option B may be genuinely cheaper despite the age increases.

You Are Over 55 with Health Issues

If you waited past 55 and have health problems, private term insurance may be out of reach or prohibitively expensive. A 58-year-old with high blood pressure and borderline diabetes might pay $400-$600/month for private coverage. FEGLI charges $195/month at 55-59 for the same amount. In this scenario, FEGLI wins.

You Need Coverage to Continue Into Retirement

Private group life insurance at most employers terminates when you separate or retire. FEGLI is different: it can continue for life if you meet the requirements. That portability has real value, especially if your health changes before you retire.

FEGLI at Retirement: Your Three Decisions

When you retire on an immediate FERS annuity, you must make three elections if you are carrying FEGLI. Get these right. They are permanent (with one exception noted below).

Decision 1: Basic Insurance Reduction Election

You choose one of three options for your Basic coverage:

Election	Post-65 Premium	Coverage After 65	Best For
75% Reduction	FREE	25% of original amount	Most retirees
50% Reduction	$0.31/month per $1,000	50% of original	Moderate needs, moderate cost
No Reduction	$1.16/month per $1,000	100% of original	High need, can afford ongoing premium

Example with $100,000 Basic coverage ($102,000 after rounding):

• 75% Reduction: Free after 65. Coverage drops to $25,500.
• 50% Reduction: $31.62/month. Coverage stays at $51,000.
• No Reduction: $118.32/month. Coverage stays at $102,000.

Recommendation: Choose 75% reduction for nearly everyone. You get free coverage at 25% of original for the rest of your life. For most retirees with a FERS pension and Social Security, $25,000-$30,000 in death benefit is adequate funeral and estate coverage.

Decision 2: Option B Election

You choose between two options:

Election	What Happens
Full Reduction	Coverage reduces 2% per month over 50 months starting at 65, then is free at $0 coverage
No Reduction	You keep paying the age-based premium to maintain full coverage

The warning: If you elect "No Reduction" for Option B at retirement and later change your mind, you get one more chance to switch. OPM sends a reminder letter shortly before you turn 65. That is your final window. Miss it and you are locked into paying premiums for life.

Most retirees should elect Full Reduction on Option B unless they have a specific reason to maintain a large death benefit in retirement (special needs dependent, estate planning, etc.).

Decision 3: Option C Election

Same two choices as Option B: Full Reduction or No Reduction. Your decision should depend on whether your spouse has other coverage and your ongoing family obligations.

How to Change FEGLI Coverage: Open Seasons and Life Events

This is one of FEGLI's least-understood features. You cannot just call OPM and change your coverage whenever you feel like it.

The ways to change FEGLI coverage:

1. New hire window: 60 days from your start date. You can elect or waive any options, no questions asked.
2. Qualifying Life Event (QLE): Marriage, divorce, death of a spouse, or birth/adoption of a child. Submit SF 2817 within 60 days. You can enroll or increase Basic, Option A, up to 5 multiples of Option B, and up to 5 multiples of Option C.
3. Physical examination: You can enroll in or increase Basic, Option A, Option B, or Option C at any time by passing a physical exam administered by an OPM-approved physician. This requires scheduling through your agency HR.
4. Open Season: FEGLI open seasons are rare and not scheduled regularly. The last open season was September 2016. Before that was 2004. Do not count on an open season to make changes.
5. Cancellation: You can cancel (waive) any FEGLI coverage at any time without a reason. Canceling is easy. Reinstating canceled coverage requires a QLE, physical, or open season.

The cancellation trap: Many federal employees cancel Option B thinking they can reinstate it later if needed. But if your health declines before a QLE or open season, you may be stuck without coverage. Never cancel without a replacement policy in place.

Calculating Whether FEGLI Is Worth It for You

Use this framework to evaluate your situation:

Step 1: Determine your coverage need

Add up:

• Mortgage balance remaining: $______
• Spouse income shortfall per year x years to financial independence: $______
• Child dependency years x estimated annual support: $______
• Desired estate transfer or final expenses: $______
• Total coverage needed: $______

Step 2: Calculate your current FEGLI cost

• Basic: Monthly paycheck deduction x 26 / 12 = $____/month
• Option B: (Your salary x multiples / 1,000) x (biweekly rate from table above) x 26 / 12 = $____/month
• Option A: Biweekly premium x 26 / 12 = $____/month
• Total monthly FEGLI cost: $______

Step 3: Get private quotes

• Go to Policygenius, SelectQuote, or Haven Life
• Request quotes for your exact coverage need on a 20-year term
• Compare the locked-in rate to what FEGLI will cost from now to your projected retirement

Step 4: Factor in health status

• Are you a healthy non-smoker? Private term almost always wins for Option B.
• Do you have significant health conditions? FEGLI's guaranteed issue may be essential.

Step 5: Make the decision

• If private saves you $10,000 or more over 20 years and you are healthy: switch
• If FEGLI is your only viable option due to health: keep it
• If you are within 10 years of retirement and already have adequate assets: consider whether you need $500,000 of coverage at all

Calculate Your Full Retirement Picture

Life insurance is one piece of a larger retirement plan. Your FERS pension, TSP balance, and Social Security all affect how much life insurance you actually need in retirement.

Use our free FERS Retirement Calculator to estimate your pension, FERS Supplement, and projected retirement income. Knowing your income picture helps you decide how much coverage your survivors would actually need.

Frequently Asked Questions

What does FEGLI Basic cover?

FEGLI Basic covers your annual salary rounded up to the nearest $1,000, plus $2,000. The government pays one-third of the premium. Basic also includes an extra benefit that doubles coverage if you die before age 36, then phases out through age 45. Most federal employees should keep Basic for their entire career.

How much does FEGLI Option B cost per month?

FEGLI Option B costs vary dramatically by age. At 35, you pay about $22/month for $500,000 coverage (5x on a $100,000 salary). At 50, that rises to $108/month. At 60, it is $433/month for the same coverage. By 65, you would pay $520/month. The premiums reset every five years based on your age band.

Is FEGLI worth it after age 50?

FEGLI Basic is worth keeping at any age since the government subsidizes one-third of the premium. FEGLI Option B, however, becomes very expensive after 50. A healthy 50-year-old may save $15,000 to $30,000 over the next decade by switching to a private 20-year term policy. The critical window to act is ages 45-50.

Can I keep FEGLI after I retire?

Yes, if you retire on an immediate annuity and have been enrolled for at least 5 years. At retirement, you must elect a reduction option for Basic: 75% reduction (free after 65), 50% reduction ($0.31/month per $1,000), or no reduction ($1.16/month per $1,000). Most retirees choose 75% reduction, which eventually gives them free coverage at 25% of the original amount.

When is the next FEGLI open season?

There is no scheduled FEGLI open season. Unlike FEHB, FEGLI does not have an annual open season. The last FEGLI open season was in 2016. Outside of open seasons, you can only change coverage within 60 days of a new hire, after a qualifying life event (marriage, divorce, birth or adoption, death of a spouse), or by passing a physical exam.

What is the FEGLI Option B over-insurance trap?

Most federal employees enroll in 5x Option B as new hires when premiums are $22/month for $500,000 coverage. They forget about it for 20 to 30 years. By age 55-60, they discover Option B now costs $195-$433/month for the same coverage. Private insurance has also gotten expensive by then, leaving them feeling stuck. The trap is waiting too long. The solution is evaluating at ages 45-50 when private alternatives are still affordable.

Related Resources

• FERS Retirement Calculator: Estimate your pension income and how much life insurance you actually need in retirement
• FEGLI vs Private Life Insurance Guide: Side-by-side comparison of total 20-year costs
• FEHB Guide 2026: Federal health insurance options and open season guide
• FERS Retirement Guide: Complete guide to federal retirement eligibility, pension calculations, and planning

Sources

• OPM FEGLI Program Information and Premium Tables
• OPM FEGLI FastFacts
• OPM Basic Insurance in Retirement
• OPM Option B in Retirement
• OPM FAQ: When is the next FEGLI open season?
• MoneyGeek 2026 Life Insurance Rates
• NerdWallet Average Life Insurance Rates