The Federal Employee Group Life Insurance (FEGLI) program is the largest group life insurance plan in the work, consisting of over 4 million federal workers and retirees. It is comprised of four components: Basic coverage, and three types of optional insurance that can be added to basic, known as “A,” “B,” and “C.” It can help to picture FEGLI like a tree with “Basic” being the trunk and options A, B, and C being the branches. As a brief review, option A provides an additional $10,000 in coverage, option B offers multiples of basic coverage (2x-5x), and option C is for family coverage.
When retiring, the four components are treated differently. With FEGLI Basic, you’ve got three options: drop coverage completely, keep full coverage, or reduce coverage. Keeping full coverage can become increasingly expensive, but if you have a life-threatening condition, maintain FEGLI-Basic can make a lot of sense. As for reducing it, FEGLI basic can be reduced by 50% with a lower premium, or decreased to 75%.
If you’re 65 or older, retired, and held the coverage for at least 5 years, though, the remaining 25% of coverage stays in effect at no additional cost. But this a no-brainer, no fed should irrevocably drop all of their FEGLI coverage when they leave federal service to retire. If you retire before reaching age 65, paying for FEGLI until you get there might be the only deterrent when deciding to keep at least ¼ of your Basic FEGLI in retirement. Same goes for option A coverage, but not options B and C.
Until Next Time,
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
The FedLife Podcast is your in-depth, biweekly deep dive into the world of federal benefits and retirement planning. Hosted by federal benefits expert Ed Zurndorfer and Dan Sipe of Serving Those Who Serve, each 30-minute episode unpacks the complexities of FERS and CSRS retirement, FEHB and Medicare, survivor benefits, tax planning, and more. Designed for federal employees and retirees who want more than just the basics, FedLife goes beyond the headlines to explore the rules, nuances, and strategies that can make a meaningful difference in your retirement. Remember: it’s your Fed life, make it a great one.
The Fed15 Podcast is your weekly 15(ish)-minute briefing on federal benefits and financial planning, built specifically for federal employees and retirees. Hosted by Dan Sipe and Katelyn Murray of Serving Those Who Serve, each episode delivers clear, actionable guidance on topics like FERS and CSRS retirement, TSP strategies, FEHB, survivor benefits, tax planning, and more! Whether you’re five years from retirement or already there, The Fed15 helps you cut through the noise, avoid costly mistakes, and make confident decisions about your federal benefits.
