The Federal Employees’ Group Life Insurance (FEGLI) Program was established by the United States Government in August of 1954.
With 2.1 million civilian federal employees according to the Office of Personnel Management (OPM), it is among the the largest group life insurance plans in the world.
FEGLI provides group term life insurance. It consists of Basic life insurance coverage and three supplemental options.
Unless coverage is declined by the employee, new federal employees are automatically covered by basic life insurance with premiums payroll deducted.
Basic life insurance coverage under FEGLI is equal to one year of base pay rounded up to the next thousand, plus $2000. This group life benefit is provided with no medical exam and is subsidized 33% by the government (100% in the case of postal employees).
The basic benefit, not tied to the insured’s age or health, is currently priced at .15 per thousand of coverage each pay period. Additionally, the basic plan is supplemented free of charge starting at age thirty five with a ten percent (10%) increase in benefit each year until age 45. The supplemental benefit is removed at age 45.
In addition to the basic coverage , there are three options to supplement coverage.
Option A of the federal employee group life insurance plan provides $10,000 of protection. This coverage is a well priced benefit and barring unusual circumstance should be kept in force.
Option B of the federal employee group life insurance plan offers up to 5x your basic salary. The cost of this insurance plan increases in five year increments. The incremental increases are significant after age 45. Beyond the age of 50, option B becomes prohibitively expensive and it is worth comparing with FEGLI2TERM’s no exam options for significant savings.