What are FEGLI Option A, FEGLI Option B and FEGLI Option C?

What is FEGLI Option A, FEGLI Option B and FEGLI Option C?

It’s not uncommon for young federal employees to simply follow defaults when it comes to the options for Federal Employees Group Life Insurance (FEGLI). After all, government retirement is not even on the horizon, and federal employees insurance is just one of those pesky payroll deductions the government collects from you.

But the fact of the matter is that it does make a big difference later on, and the best way to handle it is to understand all the FEGLI options right from the start. To be specific, you need to find out what is FEGLI Option A, Option B and Option C.

Coverage under Basic FEGLI is adjusted annually based on your salary and your age, and will provide tax-free life insurance benefits as a single payment to your designated beneficiary. In order to receive benefits through FEGLI Basic, you need to have kept your government employee life insurance coverage active for a minimum of five consecutive years.

 

Enhancing Federal Life Insurance with FEGLI Options

 

You can then add to it with one or more options and combinations of options. FEGLI Option A, also referred to as the Standard Option, provides $10,000 in additional coverage and may be continued into retirement. Premiums have to be paid until age 65, and there is no cost after that. Option A coverage will reduce by 2% per month after that, until there is $2,500 left.

FEGLI Option B provides additional coverage of up to five times the individual salary. If you reduce Option B coverage or opt out of it, the federal insurance company gets to keep 100% of the premiums you have already paid in.

FEGLI Option C adds family coverage, offering life insurance for family members including the federal employee’s spouse and children. The coverage is up to five multiples of $5,000 for a spouse and up to five multiples of $2,500 for each child.

So FEGLI Option C coverage for your family with three multiples means $15,000 coverage for your spouse and $7,500 for each child. The insurance company once again gets to keep the premiums already paid in if you opt out of this option later on.