Most federal employees are enrolled in FEGLI from the moment they start their job. That automatic enrollment is one of the program’s biggest advantages. There’s no medical exam, no underwriting, just coverage. But convenience at the start does not mean the same choices serve you well throughout your career. FEGLI premiums increase as you age, and the decisions you make in your 40s and 50s can have real consequences for your retirement income.
Reach out to United Benefits to discuss your life insurance coverage options.
Early Career (20s–30s): Strong Coverage at an Affordable Price
In the early years of your federal career, FEGLI Basic is genuinely a good deal. Premiums are low, you are automatically enrolled, and the government covers one-third of the Basic premium cost. Your Basic coverage equals your annual salary rounded up to the nearest thousand, plus $2,000. At this stage, the cost to maintain it is minimal.
Option B, which lets you purchase additional multiples of your salary, is also relatively affordable in your 20s and 30s and even early 40s. If you have dependents, a mortgage, or limited savings, carrying additional coverage through FEGLI can make sense while you build financial footing. The key thing to understand is that Option B premiums are age-banded, meaning they increase every five years. What costs very little now will cost noticeably more by the time you reach your 40s, especially after 45.
Mid-Career (40s–50s): The Crossroads
This is the decade where FEGLI decisions carry the most weight. Option B premiums begin their steeper climb, and if you are in good health, private term life insurance may offer comparable or better coverage at a lower cost. This is the window where you are still healthy enough to qualify for favorable rates and to evaluate whether private life insurance coverage makes more financial sense than holding onto Option B.
Basic FEGLI is almost always worth keeping. The government subsidy, the guaranteed coverage, and the retirement reduction options make it a strong baseline for most federal employees. Option B is a different calculation. If cost is becoming a concern and your health allows you to qualify privately, this is the time to explore your options.
Not sure whether your current FEGLI coverage still fits your situation? A benefits review can help you see the full picture.
Pre-Retirement (55–62): A Closing Window for Important Decisions
As you approach retirement, three things matter most with FEGLI: the five-year rule, your reduction election, and survivor planning.
To carry FEGLI coverage into retirement, you must have been enrolled for the five consecutive years immediately before your retirement date, or for your entire federal career if it is shorter than five years. If you dropped coverage at any point and did not re-enroll in time, you cannot carry it into retirement.
At retirement, you will also choose how your Basic coverage reduces over time. The standard option reduces your coverage by 75% after age 65, which brings your premium to zero, so you get coverage for life without having to pay additional premiums. Other elections let you reduce by less, but come with higher ongoing costs.
Option B at this stage is often unsustainable for long-term coverage. Premiums spike significantly in the years approaching and following retirement, and if private insurance is still available to you, pre-retirement is typically your last practical window to secure it.
Your Benefits Deserve a Second Look
FEGLI is one piece of a retirement picture that also includes your FERS pension, TSP, FEHB, and Social Security. The right coverage level at retirement depends on all of those pieces working together. If you have not reviewed your life insurance alongside your full federal benefits picture, use the form below to connect with a specialist who can help you think it through.