Understanding FEGLI: Basic Coverage, Optional Insurance, and What It Costs You

This is the first in a series of columns on life insurance to help federal employees understand their need for life insurance coverage, and how they can at least partially meet that need by enrolling in the Federal Employees Group Life Insurance (FEGLI) program.

Purpose of Life Insurance Ownership

Before discussing the specifics of the FEGLI program, it is important to discuss why most federal employees have a need to buy life insurance at some point in their lives. The following are some life events that will most likely trigger a need for life insurance:

• Income replacement. A working individual with dependents (spouse, children) they financially support via a paycheck that is used to pay family expenses. What if something were to happen to the individual and they died? What is going to replace the individual’s salary income? The death proceeds from life insurance can help cover at least some of that lost income.
• Paying off a large long-term debt. Working individuals at some time in their lives will take on long-term debt, most commonly a 15-year or 30-year mortgage. With the high price of housing, most individuals do not have a sufficient amount of cash to purchase a principal residence outright. They must apply for a mortgage, usually a 15- or 30-year mortgage. If approved, the individual will make monthly payments in order to pay down the mortgage and eventually pay off the mortgage. But what happens if the individual dies before paying off the mortgage? This is especially important for married individuals when both the individual and spouse have co-signed for a mortgage. A spousal life insurance policy on each spouse in which, at the death of the first spouse, the life insurance proceeds can be used to pay the mortgage balance means the surviving spouse is not burdened with paying off the remaining balance of the mortgage.
• Estate and inheritance taxes. When an individual dies, the individual’s heirs may face estate and inheritance taxes. If the individual is worried about their heirs getting hit with a large estate and/or inheritance tax bill, then the death proceeds from a life insurance policy can help pay any estate and inheritance taxes.

The Federal Employees Group Life Insurance Program

FEGLI is a group-sponsored life insurance program administered by the U.S. Office of Personnel Management (OPM). The “group” is federal employees and retirees, and the group sponsor is the federal government.

FEGLI life insurance is term-life insurance, meaning the insurance does not build up any cash value. A newly hired permanent employee is eligible to enroll in FEGLI with “guarantee issue,” meaning the newly hired employee does not have to file an application, nor does the newly hired employee have to prove they are insurable through a medical exam.

As stated, FEGLI program participation is voluntary. However, a newly hired employee will be automatically enrolled in the FEGLI program and in particular the “basic life” insurance coverage (see below for more information on the different coverages within the FEGLI program). A newly hired employee can waive automatic FEGLI coverage by filling out and submitting Standard Form 2817 (Life Insurance Election).

The advantage of being enrolled in a group life insurance plan such as FEGLI is that there is guarantee issue (no underwriting) and premiums may be cheaper compared to an individual term life insurance policy issued by a private insurance company. This is especially true if the individual is older than 45. The disadvantage to being enrolled in a group life insurance program is that when the insured leaves the group, the insured loses the group life insurance coverage. On the other hand, an individually owned life insurance policy remains with the policyowner as long as the policy is in force, no matter where the policyowner works and lives.

The following discussion focuses on the different parts of the FEGLI program.

Basic Amount Insurance (BIA)

An employee’s FEGLI “basic insurance amount” (BIA) is equal to the greater of: (1) an employee’s annual adjusted basic pay as shown on the employee’s current year Standard Form 50 (Notice of Personnel Action) rounded up to the next $1,000 plus $2,000; and (2) $10,000.

The following example illustrates:

Example 1. Peter, aged 43, is a federal employee whose current year Standard Form 50 salary is $147,250. Peter is enrolled in the FEGLI program BIA. His current year BIA coverage is equal to:

FEGLI offers an extra benefit at no cost to employees under age 45. The extra benefit doubles the amount of BIA life insurance payable if the employee is under age 36. Once the employee reaches age 36, the extra benefit decreases 10 percent each year until age 45, at which age the extra benefit disappears.

The following table summarizes the extra coverage:

The following two examples illustrate the extra benefit under FEGLI BIA.

Example 2. Michelle, aged 28, is a federal employee with a Standard Form 50 salary of $48,920. Michelle’s BIA equals:

$48,920 (rounded up to next $1,000 equals $49,000) + $2,000 = $51,000

$51,000 x 2.0 (extra benefit) = $102,000.

Example 3. Francine, age 41, is a federal employee with a Standard Form 50 salary of $102,300. Francine’s BIA equals:

$102,300 (rounded up to next $1,000 equals $103,000) plus $2,000 equals $105,000

$103,000 times 1.4 (extra benefit for a 41-year-old) equals $147,000.

Accidental Death and Dismemberment (AD&D)

There is also accidental death and dismemberment (AD&D) insurance. AD&D provides additional life insurance death proceeds in the event of death due to a fatal accident or an accident which results in the loss of a limb or eyesight. For benefits to be paid, the death or loss must occur within 90 days after the accident and be a direct result of a bodily injury sustained from that accident, independent of other causes.

AD&D insurance is automatically included in the BIA at no additional premium cost. AD&D is also automatically included in Option A (FEGLI Standard) at no additional cost.

The AD&D schedule of losses is presented in the following table.

¹The Principal amount is the full amount of AD&D insurance. For employees not enrolled in Option A, it is equal to their Basic Insurance amount. For employees enrolled in Option A, it is equal to the sum of their BIA plus $10,000. The Principal amount is paid in addition to the regular payment for loss of life.

²A Member is a hand, foot, or the sight in one eye. Note: for all losses resulting from any one accident, no more than the Principal amount is payable.

Cost of FEGLI BIA

The cost of the FEGLI BIA is shared by the employee and the employee’s federal agency. The total cost is 24 cents per $1,000 of BIA coverage per person. Of the 24 cents per $1,000 of coverage, employees pay two-thirds, or 16 cents per $1,000 of BIA coverage, and the employee’s agency pays 8 cents per $1,000 of BIA coverage. Returning to Example 1, in which Peter currently has $150,000 of BIA coverage, Peter pays 150 (number of $1,000 units of coverage) times $0.16 per $1,000 of coverage times 26 pay dates = $624 per year in premiums.

In addition to the BIA, the FEGLI program offers three optional insurances: (1) Option A — Standard Insurance; (2) Option B — Multiple of Salary; and (3) Option C — Family Coverage. Note that an employee must be enrolled in FEGLI BIA in order to choose any of the optional coverages.

Employees pay the full premium cost for all optional insurance. There is no federal government contribution towards premium cost. Unlike FEGLI BIA, the optional insurance is not automatic when an employee is newly hired. Within 31 days of entering federal service, a newly hired employee must submit Life Insurance Election Form SF 2817 (Life Insurance Election, FEGLI). Like the FEGLI BIA, there is guarantee issue — no underwriting or medical exams — when an employee elects to enroll in the FEGLI optional insurances.

The three optional insurances are discussed below.

Option A (Standard)

Option A — Standard is equal to $10,000 of life insurance. Employees pay the full premium cost for Option A (no federal government premium contribution). Premiums depend on an employee’s age. The following table summarizes the current (2026) biweekly and monthly premium rates. Note that premium rates may increase in the future — always verify current rates on the OPM FEGLI rate charts.

Note: for payroll withholding purposes, an employee will attain an age in the first pay period after the employee’s birthday.

The following example illustrates Option A coverage premium cost:

Example 4. Walter, age 49, is a federal employee enrolled in FEGLI BIA and Option A. Walter’s annual premium cost for Option A is computed as follows, using the “Rates for Option A” table above for an employee age 45 to 49:

$0.60 per pay period times 26 pay periods equals $15.60 (annual premium cost)

Note that Walter’s premium cost for Option A will increase to $1.00 per pay date, or $26.00 per year, effective the first pay period after he becomes age 50.

Option B — Additional

Option B coverage comes in 1, 2, 3, 4, or 5 multiples of an employee’s current year Standard Form 50 adjusted salary. The adjustment is the employee’s salary rounded up to the next thousand. It does not include the extra $2,000 added for the BIA insurance and does not include an Extra Benefit. The following table presents current (2026) biweekly and monthly premium rates. Note that premium rates may increase in the future.

Note: for payroll withholding purposes, an employee will attain an age in the first pay period after the employee’s birthday.

The following example illustrates Option B coverage premium cost.

Example 5. Darlene is a federal employee, aged 54. She is enrolled in FEGLI BIA and Option B (four multiples). Darlene’s current salary is $84,600, and her Option B coverage is equal to 4 x $85,000, or $340,000. Darlene’s annual premium cost for Option B is computed as follows, using the “Rates for Option B” table above for an employee age 50 to 54:

$0.10 per $1,000 of coverage/pay date times 26 pay dates equals an annual cost of $2.60 per $1,000 of coverage

With $340,000 in Option B coverage, Darlene’s annual premium cost is:

340 (number of $1,000 units of coverage) times $2.60/$1,000 of coverage = $884.

Note that Darlene’s premium cost for Option B will increase to $0.18 per $1,000 per pay date, or $4.68 per $1,000 of coverage, effective the first pay period after she becomes 55. If you’re within a few years of retirement and weighing whether to keep Option B at these escalating rates, running your numbers through the FEGLI Calculator can show how the premium and payout change under each retirement reduction election.

Option C — Family Coverage

An employee may choose Option C (Family Coverage) to provide coverage for a spouse and eligible dependent children and stepchildren. When electing Option C, all of an employee’s eligible family members are automatically covered. 1, 2, 3, 4, or 5 multiples of coverage may be selected. Each multiple is equal to $5,000 of life insurance coverage for a spouse and $2,500 of life insurance coverage for each dependent child. A spouse will have the same multiple as a dependent child. The employee is always the beneficiary of the FEGLI Option C life insurance.

For example, if an employee elects four multiples, then if a spouse dies, the employee is the beneficiary of $20,000 (4 x $5,000). If a dependent child dies, the employee is the beneficiary of $10,000 (4 x $2,500).

Eligible dependent children must be unmarried and under age 22, or if age 22 or over, incapable of self-support because of a mental or physical disability that existed before the child reached age 22. Eligible dependent children include natural, adopted, and stepchildren (if they are in a normal parent-child relationship), recognized natural children, and foster children if they live with the employee in a normal parent-child relationship.

The following table presents current (2026) biweekly and monthly premium rates for Option C. Note that premium rates may increase in the future.

The following is an example of Option C, Family Coverage:

Example 6. Jose, age 39, is a federal employee and is enrolled in FEGLI BIA, Option A, and Option C. Option C is for his wife and two children. Jose has elected a multiple of five for Option C coverage. Jose’s Option C life insurance is therefore:

5 times $5,000 equals $25,000 life insurance on his spouse; and

5 times $2,500 equals $12,500 life insurance on each of his children.

The biweekly cost to Jose (age 39) from the table above is:

15 multiples (5 for his spouse, 5 on each of his children) times $0.24 (cost per multiple) equals $3.60 per pay date.

With 26 pay dates, the annual cost is 26 times $3.60 equals $93.60.

Note that when Jose becomes age 40, the biweekly cost for each multiple will increase to $0.37. Jose’s cost per pay date will be 15 times $0.37, or $5.55. Annual cost for Option C will increase to 26 times $5.55 equals $144.30.