I FEGLI is four policies, not one
The reason "is FEGLI worth it" produces such contradictory advice is that people answer it about different layers without saying which. The four coverages share a name and almost nothing else.
| Layer | Coverage | Priced on | Government pays? |
|---|---|---|---|
| Basic | Annual pay rounded up to next $1,000, plus $2,000 | Flat rate, no age banding | Yes — one third |
| Option A | Flat $10,000 | Age bands | No |
| Option B | 1× to 5× annual pay, rounded up | Age bands, per $1,000 | No |
| Option C | 1 to 5 multiples: $5,000 spouse, $2,500 per child | Age bands, per multiple | No |
Basic is automatic when you are hired unless you actively waive it. The three optional coverages require an affirmative election, and the window for making one without medical underwriting is narrow. Every optional layer is paid entirely by you.
FEGLI is renewable term insurance that re-prices every five years with no ceiling — which makes it a bargain in your thirties and a liability in your seventies, and the decision is not the same decision at both ends of a career.
II Basic — the only subsidized layer
Your Basic Insurance Amount is your annual rate of basic pay rounded up to the next whole $1,000, plus $2,000. Basic pay here means salary plus locality — the same figure that feeds your High-3, excluding overtime, bonuses, and awards. A salary already sitting exactly on a $1,000 boundary stays there before the $2,000 is added.
The employee rate is $0.16 per $1,000 biweekly, or $0.3467 monthly, and it does not change with age while you are employed. The government adds $0.08 biweekly per $1,000, so the true cost of the coverage is $0.24 and you pay two thirds of it.
Basic priced for a GS-13 Step 5
A GS-13 Step 5 in the Rest of U.S. locality area earns roughly $120,700 in 2026 basic pay. Rounded up to $121,000, plus $2,000, gives a Basic Insurance Amount of $123,000.
At $0.16 per $1,000 biweekly: 123 × $0.16 = $19.68 per pay period, or about $512 per year. The government contributes another $256 on top.
Employees under age 35 receive an Extra Benefit that doubles the Basic death benefit at no additional cost. It phases out by 10 percent per year between 35 and 45 and disappears entirely at 45. You never pay for it and there is nothing to elect — it is worth knowing about only so that you understand why the coverage figure on your benefits statement drops in your late thirties without your having changed anything.
III Option A — the flat $10,000
Option A is a fixed $10,000 of additional coverage at a flat biweekly dollar amount rather than a per-$1,000 rate. It runs $0.20 biweekly under 35 and tops out at $6.00 biweekly at 60 and over.
Judged strictly as insurance, $10,000 is not a meaningful death benefit for a household with a mortgage. Judged as what it becomes in retirement, it is one of the better small decisions in the program: under the full reduction election, Option A drops to a permanent $2,500 at no cost after 65 and stays there for life. That is a paid-up policy roughly sized to cover final expenses, acquired for a few dollars a pay period during your working years.
The only age band where the arithmetic gets questionable is 60 and over, where $6.00 biweekly is $156 per year for $10,000 of coverage. Even then, dropping it in your last few working years to save $156 forfeits the permanent $2,500 — so the usual answer is to keep it.
IV Option B — where the money actually goes
Option B is the layer that generates all the strong opinions, and it deserves them. You elect one to five multiples of your annual basic pay rounded up to the next $1,000 — note that the extra $2,000 added for Basic does not apply to Option B. The premium is charged per $1,000 of coverage, in five-year age bands.
The rate structure is what matters:
| Age band | Biweekly per $1,000 | Cost of $400,000 per year |
|---|---|---|
| Under 35 | $0.02 | $208 |
| 35 – 39 | $0.02 | $208 |
| 40 – 44 | $0.03 | $312 |
| 45 – 49 | $0.06 | $624 |
| 50 – 54 | $0.10 | $1,040 |
| 55 – 59 | $0.18 | $1,872 |
| 60 – 64 | $0.40 | $4,160 |
Under 45, Option B is genuinely cheap — a GS-12 carrying 5× coverage pays a couple of dollars a pay period. The curve turns at 45, doubles again at 50, nearly doubles at 55, and more than doubles at 60. The coverage amount never grows. Only the price does.
Retirement does not end the escalation; under the No Reduction election it accelerates. The annuitant monthly rate reaches $1.040 per $1,000 at 65–69, $1.863 at 70–74, $3.900 at 75–79, and $6.240 at 80 and over. For a retiree holding $500,000 of Option B, that final band is roughly $3,120 per month — $37,440 a year — for a policy that pays $500,000 once.
A retiree carrying $500,000 of Option B under No Reduction pays cumulative premiums approaching the face value of the policy itself by their mid-eighties. At that point you are not insuring a risk; you are pre-paying your own death benefit on an installment plan, with the insurer keeping anything you overpay.
V Option C — family coverage
Option C insures your family rather than you. Each multiple provides $5,000 on your spouse and $2,500 on each eligible child, and you may elect one to five multiples. Premiums are charged per multiple, in the same five-year age bands, based on your age rather than your spouse's.
The rate runs $0.20 biweekly per multiple under 35 and reaches $2.43 at 60–64, then continues climbing in retirement to $7.80 biweekly at 80 and over. Children age off the coverage at 22, so a family with grown children is paying the child portion of the premium for nothing.
Option C makes the most sense for a household where the spouse has no independent income and the children are young. It makes the least sense for a dual-income household with adult children, where the $5,000 spousal benefit is not financially material and the premium is buying a rounding error. Review it whenever your youngest child turns 22.
VI The complete current rate tables
These are the published OPM rates, effective October 1, 2021 and still current. FEGLI premiums do not change annually the way FEHB premiums do; OPM revises them only after an actuarial study, and the last Option B change before 2021 was in 2005.
| Age band | Option A (biweekly) | Option B (per $1,000) | Option C (per multiple) |
|---|---|---|---|
| Under 35 | $0.20 | $0.02 | $0.20 |
| 35 – 39 | $0.20 | $0.02 | $0.24 |
| 40 – 44 | $0.30 | $0.03 | $0.37 |
| 45 – 49 | $0.60 | $0.06 | $0.53 |
| 50 – 54 | $1.00 | $0.10 | $0.83 |
| 55 – 59 | $1.80 | $0.18 | $1.33 |
| 60 – 64 | $6.00 | $0.40 | $2.43 |
| 65 – 69 | Free after 65 | $0.48 | $2.83 |
| 70 – 74 | Free | $0.86 | $3.83 |
| 75 – 79 | Free | $1.80 | $5.76 |
| 80 and over | Free | $2.88 | $7.80 |
Basic sits outside this table because it is not age-banded: $0.16 biweekly per $1,000 for employees at any age, with the government adding $0.08.
| Post-retirement Basic election | Monthly per $1,000 before 65 | Monthly per $1,000 after 65 |
|---|---|---|
| 75% reduction (default) | $0.3467 | No cost |
| 50% reduction | $1.0967 | $0.75 |
| No reduction | $2.5967 | $2.25 |
VII FEGLI Cost & Coverage Calculator
Enter your salary, age, and elections. The tool computes each layer's coverage and premium using the published OPM rates, totals your current cost, and projects what the same elections will cost in each future age band.
Price every layer
Uses the OPM rate tables effective October 1, 2021 — the rates currently in force. Basic is flat-rate; Options A, B, and C are age-banded.
Option B Annual Premium by Age Band — $400,000 of Coverage
Annual cost of holding four multiples on a $100,000 salary, from the under-35 band through age 80 and over. Employee bands use biweekly rates across 26 pay periods; annuitant bands use the monthly rates across 12 months. The coverage amount is identical at every point on this chart.
VIII The age-65 cliff
At the later of age 65 or your retirement date, all four layers change at once. This is the moment most federal employees discover what they actually elected, and by then the elections are locked.
| Layer | What happens at 65 | Cost after |
|---|---|---|
| Basic (75% reduction) | Drops 2% of face per month until it reaches 25% of the original amount | Free for life |
| Basic (50% reduction) | Drops 1% per month until it reaches 50% | $0.75/mo per $1,000 |
| Basic (no reduction) | Stays at full value | $2.25/mo per $1,000 |
| Option A | Drops to a permanent $2,500 | Free for life |
| Option B (full reduction) | Drops 2% per month for 50 months, to zero | Free, then gone |
| Option B (no reduction) | Stays at full value | Escalating age-band rates to $6.240/mo per $1,000 |
| Option C | Full reduction to zero, or continue at full value | Free, or escalating to $7.80 biweekly per multiple |
The Option B full-reduction path is worth reading twice, because it differs from Basic in an important way. Basic under the 75 percent election settles at 25 percent and stays there permanently. Option B under full reduction goes to zero. After 50 months there is nothing left. If your plan depends on Option B being there at 75, full reduction is not the election you want — but no reduction is the one that costs $37,440 a year at 80.
The elections are made on SF 2818 when you retire, and they are one-time and irrevocable. You can split Option B and Option C multiples between full reduction and no reduction, which is the flexibility most retirees do not know they have — keeping one multiple at full value while letting the rest reduce to zero produces a modest permanent benefit at a manageable premium.
IX The three Basic elections at retirement
Basic is the layer most retirees get right by accident, because the default is usually correct. Still, understanding the three options prevents the single most common FEGLI mistake.
75 percent reduction. The default. Between retirement and 65 you pay $0.3467 per month per $1,000 — the same rate you paid as an employee. After 65 the coverage steps down 2 percent of the face amount monthly until it reaches 25 percent of your Basic Insurance Amount, and you pay nothing further, ever. On a $123,000 BIA that is roughly $43 a month for a few years, in exchange for $30,750 of paid-up coverage for life.
50 percent reduction. Costs $1.0967 monthly per $1,000 before 65 and $0.75 after, for life. Coverage settles at half the original amount. You are buying an extra 25 percent of your BIA at a permanent monthly cost.
No reduction. Costs $2.5967 monthly per $1,000 before 65 and $2.25 after, for life. On a $123,000 BIA that is $277 per month forever — $3,320 a year, rising in real terms as your COLA-limited annuity fails to keep pace.
Dropping Basic entirely at retirement to avoid the interim premium. You save roughly $41 a month for a handful of years and permanently forfeit 25 percent of your Basic Insurance Amount, free for life. There is no way back in — no open season, no proof of insurability, nothing. Once Basic is gone at retirement it is gone.
X FEGLI versus private term
The honest comparison depends on your age and your health, and the answer flips somewhere in the mid-forties.
Under 45, FEGLI Option B is hard to beat. At two to three cents per $1,000 biweekly, a 40-year-old carrying $400,000 pays around $312 a year. Level-premium private term at that coverage and age is often in the same neighborhood or higher, and FEGLI required no medical exam.
From the mid-forties, the structural difference starts to dominate. A private 20-year level term policy locks one rate for the entire term. Option B re-prices every five years, forever, with no cap. A 45-year-old who buys 20-year level term pays the same premium at 64 that they paid at 45. The same person on Option B pays roughly seven times more at 60–64 than at 45–49.
The same $400,000, two structures
A federal employee at 45 carrying four Option B multiples on a $100,000 salary pays $624 in the 45–49 band, $1,040 at 50–54, $1,872 at 55–59, and $4,160 at 60–64.
Over those twenty years, Option B totals roughly $38,500 — and the cost keeps climbing after 65 if they keep it.
The catch is underwriting, and it is a serious one. FEGLI asks no health questions during your initial 60-day window. Private term requires a medical exam and prices on your health. For a federal employee with a chronic condition, a cancer history, or a family history that triggers a rating, FEGLI may be the only coverage available at any price — which makes the comparison academic. Never cancel FEGLI coverage until a replacement policy is issued and in force, not merely applied for.
Federal-employee association products such as WAEPA and FEEA offer another middle path with group underwriting that is often lighter than fully individual policies. They are worth pricing alongside both options rather than treating the choice as FEGLI-or-nothing.
XI Enrollment windows — the asymmetry that matters
FEGLI is easy to leave and hard to join, and that asymmetry should drive your decisions at every stage.
- New-hire window — 60 days. Elect any optional coverage with no medical underwriting. This is the single most valuable window in the program, and it does not come back.
- Qualifying life events. Marriage, divorce, death of a spouse, or the birth or adoption of a child open a limited window to add or increase coverage.
- Proof of insurability. Available any time via SF 2822, but it means medical underwriting — the exact thing FEGLI's new-hire window let you skip.
- Open seasons. Genuinely rare and not held on a schedule. Do not plan around one.
- Reducing or cancelling. Any time, no restrictions.
To carry any layer into retirement you must have been enrolled in that specific coverage for the five years immediately before you retire, or for all periods it was available if shorter, and you must retire on an immediate annuity. It is not waivable. Dropping Option B at 58 to save money and re-electing at 61 means you cannot carry it at all — the clock restarts.
The same five-year rule governs FEHB continuation, and the two are worth checking together well before you file. The full separation checklist is in Topic 04 on benefits at separation, and the retirement-date mechanics that determine whether you have an immediate annuity at all are in Topic 11 on FERS accrual.
XII The verdict, layer by layer
| Layer | Verdict | Reasoning |
|---|---|---|
| Basic | Keep, at every stage | The only subsidized layer, flat-rate while working, and free for life at 25% after 65 under the default election. |
| Option A | Keep unless cash is genuinely tight at 60+ | Cheap for most of a career and becomes a permanent free $2,500 after 65. |
| Option B, under 45 | Keep — often the best value available | Two to three cents per $1,000 biweekly with no medical underwriting. |
| Option B, 45 to 60 | Price alternatives while you are still insurable | The escalation is about to steepen sharply. This is the decision window. |
| Option B in retirement | Full reduction for most; split multiples if you need some permanent benefit | No reduction can approach the face value in cumulative premiums by the mid-eighties. |
| Option C | Situational — review when your youngest turns 22 | Sensible with young children and a non-earning spouse; marginal otherwise. |
Underneath all of it sits a question the rate tables cannot answer: how much life insurance do you actually need? The standard framing is income replacement — enough to cover the years of earnings your household would lose. But federal employees have something most workers do not, and it changes the math considerably. If you elect a full FERS survivor annuity, your spouse receives 50 percent of your unreduced annuity for life, inflation-adjusted, plus continued FEHB coverage. That is a substantial replacement stream on its own, and it means the insurance gap you are filling with FEGLI may be smaller than a generic calculator suggests.
What to check this pay period
- Pull your LES and find the FEGLI deduction. Confirm which layers you are actually paying for — many employees are carrying options they elected years ago and forgot.
- Compute your Basic Insurance Amount: annual basic pay rounded up to the next $1,000, plus $2,000. Verify it matches what you are being charged at $0.16 per $1,000 biweekly.
- Identify your age band and the band you enter next. If you turn 45, 50, 55, or 60 this year, your Option B premium is about to step up.
- If you are between 45 and 60 and in good health, price level-premium private term and association products now — insurability is a wasting asset.
- Never cancel FEGLI until a replacement policy is issued and in force. Not applied for. Issued.
- If you are within five years of retiring, do not drop any coverage you intend to carry into retirement. The five-year clock restarts.
- If your youngest child has turned 22, re-evaluate Option C — you may be paying for coverage on people who aged off it.
- Plan your SF 2818 elections before you retire, not at the retirement counseling session. They are one-time and irrevocable.
- Model your FERS survivor annuity first, then size FEGLI to the remaining gap rather than to a generic multiple of income.
Frequently asked questions
Employees pay $0.16 per $1,000 of Basic coverage biweekly, which works out to $0.3467 per $1,000 monthly. The rate is the same at every age while you are working. The government pays an additional one-third on top, bringing the total to $0.24 biweekly per $1,000. Basic is the only FEGLI layer where the government contributes anything. Your Basic Insurance Amount is your annual basic pay rounded up to the next whole $1,000, plus $2,000. For a $95,400 salary that is $98,000 of coverage, costing $15.68 biweekly or roughly $408 per year.
Option B is priced in five-year age bands and behaves like renewable term insurance that re-prices every five years with no cap. The employee rate per $1,000 of coverage biweekly runs $0.02 under age 35, $0.06 at 45 to 49, $0.10 at 50 to 54, $0.18 at 55 to 59, and $0.40 at 60 to 64. In retirement under the No Reduction election the monthly rate reaches $1.040 per $1,000 at 65 to 69, $1.863 at 70 to 74, $3.900 at 75 to 79, and $6.240 at 80 and over. That is a 144-fold increase from the under-35 rate. Coverage never grows; only the price does.
Several things happen at once, at the later of age 65 or your retirement date. Under the default 75 percent reduction, Basic coverage begins dropping 2 percent of the face amount per month until it reaches 25 percent, and you pay nothing further. Option A drops to a permanent $2,500 at no cost. Option B and Option C either begin a 2 percent per month reduction to zero over 50 months at no further cost, or continue at full value under escalating age-banded premiums, depending on the election you made. These elections are made on SF 2818 at retirement and cannot be changed later.
The 75 percent reduction is the default. Coverage drops 2 percent per month after 65 until it reaches 25 percent of the original amount, and it costs nothing once the reduction begins. The 50 percent reduction drops coverage 1 percent per month until it reaches half the original amount, and costs $0.75 per month per $1,000 of Basic Insurance Amount after 65. No Reduction keeps the full amount for life at $2.25 per month per $1,000 after 65. Before 65 the monthly rates are $0.3467, $1.0967, and $2.5967 per $1,000 respectively.
Only if you were enrolled in that coverage for the five years of service immediately before your retirement, or for all periods during which the coverage was available to you if that is shorter, and you retire on an immediate annuity. This five-year rule applies separately to Basic and to each optional coverage. It is not waivable. An employee who drops Option B at 58 and tries to pick it back up at 61 will not be able to carry it into retirement, because the five-year clock restarts.
It depends on your age and your health. Under roughly age 45, FEGLI Option B is genuinely inexpensive and competitive because the rate is only two to six cents per $1,000 biweekly. From the mid-forties onward, level-premium private term frequently wins, because a private policy locks a single rate for the full term while Option B re-prices upward every five years forever. The catch is medical underwriting: FEGLI requires none during your initial 60-day window, so employees with health conditions may find FEGLI is the only coverage available to them at any price.
New employees have 60 days from their appointment to elect any optional coverage with no medical underwriting. That is the single most valuable enrollment window in the program. Outside of it, you generally need a qualifying life event such as marriage, divorce, death of a spouse, or the birth or adoption of a child, or you must submit proof of insurability. FEGLI open seasons are rare and are not held on a schedule. You can always reduce or cancel coverage at any time; increasing it is the hard direction.
For most retirees the 75 percent reduction election is worth keeping. You pay the pre-65 rate of $0.3467 per month per $1,000 for the years between retirement and 65, then nothing at all for the rest of your life while retaining 25 percent of your Basic Insurance Amount as a permanent death benefit. On a $98,000 Basic Insurance Amount that is roughly $34 per month for a few years, in exchange for $24,500 of paid-up coverage for life. Dropping Basic entirely to avoid that interim premium is the most common and most regretted FEGLI mistake.