The Federal Employees’ Group Life Insurance (FEGLI) program is a federal life insurance program administered by the federal Office of Personnel Management (OPM). The Office of Federal Employees’ Group Life Insurance (OFEGLI) has been established to process and pay claims and perform other administrative and FEGLI basic functions needed to run the program.
All full-time and part-time federal employees who have an appointment of more than one year are eligible to participate in the federal life insurance plan.
Participation is entirely voluntary. However, eligible employees are automatically covered under FEGLI Basic life insurance unless they waive this coverage. The decision to waive or elect life insurance coverage should be based on the employee’s evaluation of his or her personal needs (including long- and short-term plans), family situation, and other existing life insurance coverage.
FEGLI Basic and FEGLI Options
There are a number of different coverage options under FEGLI.
FEGLI Basic Life – An amount equal to the employee’s annual salary rounded up to the next $1,000, plus $2,000.
FEGLI Option A – Standard $10,000 coverage for the employee
FEGLI Option B – 1, 2, 3, 4, or 5 times multiples of the employee’s annual salary.
FEGLI Option C – Coverage for eligible family members. The employee may elect FEGL Option C – Family Life Insurance to provide coverage for his or her spouse and eligible children. When an employee elects FEGLI Option C, all of his or her eligible family members are automatically covered. Coverage multiples of 1, 2, 3, 4, or 5 times the employee’s salary are available. Each multiple is equal to $5,000 for the employee’s spouse and $2,500 for each eligible dependent child.
Enrollment in FEGLI
For new employees, Basic FEGLI coverage is effective on the first day the employee enters a pay-and-duty status, unless they waive coverage before the end of the first pay period. Optional FEGLI coverage for new employees is effective from the first day the employee is in a pay-and-duty status following the day the employee’s form to elect coverage is received by the employing office.
If there has been a break in service, and if you have returned to work within less than 180 days, you will automatically be covered under the federal life insurance coverage, if any, that you had before leaving the government. But you will not have the opportunity at that time to make a new election to increase coverage. You may, however, cancel or decrease coverage at any time.
There is an exception to this rule: If there was a qualifying change in family status (e.g., marriage, divorce, death of spouse, or giving birth to a child) during your separation from covered service or during the 60-day period immediately before separation, you will have 31 days from the date of your reinstatement or 60 days after the date of the qualifying event to increase your coverage.
If you return to work after a break in service of 180 days or more, any previous waiver of federal life insurance is automatically canceled. Unless a new waiver is filed, FEGLI Basic Life insurance becomes effective on the first day of your pay-and-duty status. You may elect any amount of Optional insurance available within 31 days of reemployment regardless of the coverage you held previously. If at the time you return to work, you fail to elect FEGLI Optional insurance coverage, the Optional federal life insurance you carried (if any) immediately prior to the break in service will be reinstated.
Additional Aspects of FEGLI Basic
Here are some additional aspects of the FEGLI program:
Accidental Death & Dismemberment
Accidental Death & Dismemberment (AD&D) benefits are a feature of both FEGLI Basic Life and Option A. This feature doubles the amount of these coverages at no additional cost to the employee.
FEGLI Extra Benefit
This benefit doubles the amount of Basic FEGLI payable if the employee’s age is 35 years or less. Beginning on his or her 36th birthday, the FEGLI extra benefit decreases by 10% each year until, at age 45 and beyond, there is no FEGLI extra benefit. This is an automatic benefit for which there is no additional cost.
Leave Without Pay
If you take a leave without pay, your federal life insurance coverage continues automatically at no cost for the first 12 months of your non-pay status. The 12 months may be continuous or broken by periods of less than 4 consecutive months of pay status.
There is an exception, however: If you are receiving workers’ compensation benefits during the first 12 months of your leave, your continued coverage will not be free. The Department of Labor will withhold the FEGLI premiums from your compensation payments. FEGLI coverage as an employee will terminate after 12 months of non-pay status or separation from the agency, whichever is earlier. At that time, you will have the right to convert your coverage to an individual policy or to continue coverage as a “compensationer” if you’re eligible. The employee or his or her assignee(s), if applicable, will have the right to convert this coverage to FEGLI Option B, if they are eligible.
A terminally ill employee who has a documented medical prognosis that his or her life expectancy is 9 months or less, can elect to receive a lump sum partial or full payment of their Basic FEGLI. If a partial payment is elected, the employee cannot later elect to receive the remaining Basic Life insurance as a living benefit. An employee’s decision to receive a Living Benefit is irrevocable.
Employees may irrevocably assign their life insurance to another person or persons, including an individual, a corporation or an irrevocable trust. Assignment means that the employee agrees to give up ownership of his or her Basic, Standard and Additional FEGLI Optional coverage forever. The employee can never change or cancel this assignment. When an employee makes an assignment, he or she must assign all their FEGLI coverage (except FEGLI Option C). They cannot assign only a portion of their coverage.FEGLI Option C — Family Coverage — cannot be assigned.
Post-65 Reduction in the Amount of Coverage
Basic Insurance Reduction: After you turn 65 if you are eligible, and choose to continue your insurance as an annuitant or compensationer, you must complete a Continuation of Life Insurance Coverage form (SF-2818) selecting the amount of Basic Life insurance you want after age 65 (or after retirement, if later). The choices are (1) 75% Reduction, (2) 50% Reduction, or (3) No Reduction. There is an exception: You must elect No Reduction if you previously elected partial living benefits.
How the Reduction Works:
If you selected:
75% FEGLI Reduction: The amount of Basic life insurance in force reduces by 2% of the original amount each month until the original amount has been reduced by 75%; only 25% of the Basic Life insurance. The amount is payable as a death benefit once the full reduction is reached.
50% FEGLI Reduction: The amount of Basic life insurance in force reduces by 1% of the original amount each month until the original amount has been reduced by 50%; 50% of the FEGLI Basic life insurance amount is payable as a death benefit once the full reduction is reached.
No FEGLI Reduction: There is no reduction in the amount of life insurance after your 65th birthday; 100% of the Basic life insurance amount is payable as a death benefit.