Learn About Basic and Optional Life Insurance Coverage

Overview of FEGLI Federal Employee Life Insurance

 

The Federal Employees’ Group Life Insurance (FEGLI), a group term insurance program, was established by the Federal Government in 1954, and since then it is considered to be the largest group insurance package globally and covers more than 4 million federal employees, retirees and their families.

FEGLI comes with two types of coverage – FEGLI basic and FEGLI optional Coverage. While the basic federal employee life insurance coverage is automatically issued in your name as soon as you start working, you need to elect the three optional coverage choices that best fit your needs. Both full time and part time federal employees can participate in the program, however, it is voluntary and the plan can be cancelled if you already have an insurance coverage or don’t require it at the moment.

The Basic FEGLI Coverage

 

The basic federal employee insurance coverage under FEGLI automatically gets issued in your name as you start service and acts as immediate protection for your beneficiaries in case of your death.

• The total amount for this federal employee life insurance is a sum of your annual basic pay rounded to the next $1000 plus an additional $2000.

• Two thirds of the costs of this insurance is payable by you while the rest is paid by the Government (postal employees receive 100% paid for by the USPS).

 

Fegli Optional Coverage

 

Apart from the basic FEGLI plan, there are three optional FEGLI plans that you can elect under FEGLI. However, you must have basic FEGLI in the first place to go for any of these options. The cost of this FEGLI coverage depends upon your age and is payable by you alone without any contribution by the government.

Here are the three types of optional FEGLI coverage you can go for:

FEGLI Option A – Standard Optional Insurance

• This FEGLI coverage amounts to a total of $10,000.

• The FEGLI cost is decided as per your age, and specific FEGLI age bands are defined that help decide the rate you are eligible for.

FEGLI Option B – Additional Optional Insurance

• While FEGLI Option A came with a fixed amount of coverage, FEGLI Option B comes in five multiple (1, 2, 3, 4 or 5) of your annual pay (after being rounded to the nearest next $1000).

• The cost for this FEGLI insurance too depends upon the age bands defined at 35, 40, 45, 50, 55, 60, 65, and 70, etc. (participants are responsible for the FEGLI Rates that are applicable to their given age band)

FEGLI Option C – Family Optional Insurance

• This type of group term insurance program provides coverage for your family i.e. your spouse and any dependent children. The FEGLI coverage is decided in the multiples of 1, 2, 3, 4, or 5 as per your choice.

• The FEGLI multiples are equal to $5000 for your spouse and $2,500 for the eligible children. For example, if you selected a multiple of 4, you will receive $20,000 in case of death of spouse and $10,000 in the event of death of any child.

• The cost of this FEGLI insurance is decided as per your age not of your family member(s). The same age bands are used for allocating the total FEGLI costs.

Aside from these three types of FEGLI coverage, FEGLI group term insurance program also comes with additional benefits such as the FEGLI Accidental Death and Dismemberment Benefit, FEGLI Basic Life Extra Benefit and much more.

In case of your accidental death or dismemberment, the FEGLI coverage of both FEGLI Basic and FEGLI Option A federal employee life insurance are doubled. On the other hand, the FEGLI Basic Life Extra Benefit doubles your basic FEGLI insurance amount payable if your age is less than 35. This benefit decreases by 10% with every passing year, finally stopping at the age of 45.