How FEGLI premiums work
The Federal Employees' Group Life Insurance program (FEGLI) has four components. Basic is automatic coverage equal to your salary (rounded up to the next $1,000) plus $2,000 — called the Basic Insurance Amount or BIA. The employee pays $0.16 biweekly per $1,000 of BIA; the government pays one-third, making the total rate $0.24 per $1,000. Basic uses a level/composite rate that does not change with age while you are employed.
Option A provides a flat $10,000 of additional coverage at age-banded rates. Option B provides multiples of your salary (1–5×) at age-banded rates paid entirely by the employee. Option C covers family members ($5,000 per multiple for a spouse, $2,500 per multiple for each eligible child) at age-banded rates.
Why Option B gets expensive (age bands)
Option B is term life insurance repriced every five years. The per-$1,000 biweekly rate jumps at each age band: it doubles from $0.03 to $0.06 at age 45, nearly triples from $0.06 to $0.14 at age 50, then more than doubles again from $0.14 to $0.29 at age 55. By ages 60–64 the rate is $0.46 — fifteen times the under-35 rate. Many employees elect 5× Option B in their 30s and then discover the bill in their 50s.
Enter your retirement age above to see the projected biweekly cost at each band crossing. The bar chart shows exactly where the escalation happens — the dark bar is Option B's share.
Basic vs. Optional coverage
Basic is usually the best value in FEGLI because the government subsidizes one-third of the cost and the rate does not rise with age while employed. Optional A, B, and C have no government contribution and escalate significantly.
The tradeoff at retirement is between FEGLI (which requires a survivor benefit election only in limited circumstances) and the FERS Survivor Benefit, which provides your spouse with a portion of your annuity after you die. These are separate decisions — many retirees who keep high FEGLI Option B may be over-insuring for a risk the Survivor Benefit already covers. See the FedHorizon Timeline for a complete view of your survivor planning options.
FEGLI in retirement — reduction elections
At retirement, you elect how Basic coverage will behave after age 65:
- 75% reduction: Coverage reduces by 2% per month starting at age 65 until it reaches 25% of your original BIA. Premium becomes free. Most common election.
- 50% reduction: Coverage reduces by 1% per month starting at age 65 until it reaches 50%. A reduced premium continues for life.
- No reduction: Full coverage continues indefinitely — at the full premium for life, which escalates. The most expensive long-term option.
Options B and C can be continued in retirement at the in-service age-banded rates. OPM recalculates premiums at retirement based on your salary at the date of retirement, not future pay raises — so your premium is locked to that base when you separate.