When planning for retirement, understanding your Federal Employees’ Group Life Insurance (FEGLI) coverage is essential to making informed financial decisions. Many federal employees rely on FEGLI throughout their careers, but it’s equally important to evaluate how coverage continues and how costs may change after retirement. At United Benefits, our experts specialize in helping federal employees maximize their insurance benefits and plan for a financially secure future. Below, we’ll explore your FEGLI options after retirement, cost considerations, and strategies to ensure peace of mind in your next chapter.
Understanding FEGLI and Its Core Benefits
FEGLI is the largest group life insurance program in the world, providing basic and optional coverage to millions of federal employees and retirees. Managed by the Office of Personnel Management (OPM) and underwritten by MetLife, FEGLI offers a range of protections during employment and into retirement. The program is structured around four components—Basic coverage and Options A, B, and C. Each option provides different levels of financial protection for you and your family.
One of FEGLI’s most attractive features is its group-based structure, which allows employees to access affordable coverage with no medical exam when first eligible. However, after retirement, the structure of these benefits changes, and understanding these changes is crucial to maintaining the right level of protection while managing costs effectively.
How FEGLI Coverage Continues After Retirement
To continue FEGLI coverage after retirement, you must meet a few important conditions:
- You are entitled to an immediate annuity.
- You were enrolled in FEGLI for five continuous years immediately before retirement or since your first opportunity to enroll.
- You did not elect to convert to an individual policy when you left federal service.
Once you qualify, your FEGLI coverage continues into retirement under various reduction options. Retirees typically choose among three cost structures for Basic insurance reduction: 75% reduction, 50% reduction, or no reduction. The right choice depends on your financial goals and the lasting coverage your beneficiaries may need. Understanding these distinctions helps ensure that your premiums and benefits align with your overall retirement strategy.
Cost Considerations in Retirement
While FEGLI provides valuable peace of mind, the cost dynamics shift once you leave federal service. Premiums for Optional coverages—particularly Options B and C—can increase significantly with age. For instance, the cost of Option B (which provides multiples of your annual salary) increases in five-year age brackets after retirement. According to data from OPM, retirees can see premiums increase from a few cents per thousand dollars of coverage when under age 35 to several dollars per thousand by age 80 or older (source: OPM).
With these rising costs, many retirees find that continuing all FEGLI coverage may not be the most cost-effective choice. However, FEGLI’s Basic insurance often remains affordable, particularly under the 75% reduction plan, which allows your premiums to stop after age 65 while retaining 25% of the original coverage amount for life.
Evaluating FEGLI Alternatives in Retirement
Careful analysis of your insurance needs can identify whether FEGLI alone will serve your long-term goals. Private life insurance policies or annuity-based strategies can complement or even replace certain aspects of FEGLI coverage, depending on your financial situation. Many retirees prefer supplemental coverage options that stabilize premiums and provide additional benefits for estate planning, debt coverage, or legacy transfers.
At United Benefits, our advisors assess each client’s unique circumstances—including age, health, and family dynamics—to recommend tailored insurance solutions. We understand that insurance decisions in retirement are not one-size-fits-all. A personalized review ensures that your coverage grows with your evolving needs, not against them.
How to Calculate Your Ideal Coverage Level
The key to balancing cost and coverage lies in determining exactly how much life insurance you need. Start by evaluating:
- Outstanding debts, including mortgages or loans.
- Income replacement needs for your spouse or dependents.
- Future obligations, such as education costs or healthcare expenses.
- Legacy or charitable goals.
Once you have a clear view of these factors, our financial specialists can help you project future costs and identify gaps in existing coverage. Through solutions like term life policies, permanent insurance, or hybrid long-term care policies, it’s possible to secure stable premiums and predictable benefits while maintaining flexibility.
Optional FEGLI Coverage: Is It Worth Keeping?
FEGLI Option B and Option C (family coverage) deserve special attention in retirement. Option B’s cost structure—based on your starting salary multiplier—can rapidly outpace your budget if kept too long. Many financial planners suggest reviewing this option before age 60 to determine whether an individual policy might provide better value. Option C, designed to protect family members, may also become less necessary as dependents reach financial independence.
Transitioning away from these options doesn’t mean losing protection. Instead, it’s an opportunity to customize solutions better suited to your current stage in life. Our insurance solutions include products that help maintain stability, reduce premium volatility, and strengthen overall retirement planning.
Planning for the Long Term
As you plan for retirement, think beyond immediate needs. Evaluate potential healthcare costs, inflation risks, and estate transfer strategies. FEGLI coverage should work as one part of your comprehensive financial safety net. Diversifying with supplemental insurance can give you control over your legacy and financial freedom in later years.
According to the U.S. Government Accountability Office, life insurance and annuity products can play a valuable role in stabilizing income and preserving assets during retirement. Partnering with experts who understand federal benefits ensures you make informed, data-driven decisions about which products integrate seamlessly with your existing FEGLI coverage.
Expert Support to Optimize Your Benefits
Navigating life insurance after retirement involves analyzing multiple options, understanding government regulations, and projecting long-term costs. It’s a complex process—but you don’t have to go through it alone. United Benefits has worked for decades with federal employees and retirees, offering precise guidance and trusted expertise to help them secure their future with confidence.
By connecting with our financial specialists, you’ll gain insights into FEGLI conversion options, private market strategies, and available supplemental products. Our goal is to make the process transparent, accessible, and aligned with your goals for a safe, prosperous retirement.
Contact United Benefits
When it comes to retirement planning and FEGLI analysis, expert advice can make all the difference. Let our team at United Benefits evaluate your coverage options, project future premium costs, and identify smart alternatives designed to enhance your financial security.
Reach out to us today:
United Benefits
3295 County Road 47
Florence, AL 35630
Phone: 866-558-2121
Website: https://unitedbenefits.com/
Our mission is clear—to help every client transition smoothly into retirement with confidence, knowledge, and protection. Whether it’s optimizing FEGLI coverage or building a diversified insurance portfolio, United Benefits is your trusted partner for a lifetime of financial security.