FEGLI Life Insurance at Age 55

The age of 55 is a critical milestone when it comes to federal retirement benefits and plans. If you have put in 30 years of service, this is the age when you become eligible to retire early and take full retirement benefits through the Federal Employees Retirement System (FERS) or Civil Service Retirement System (CSRS). Age 55 is also when you can start withdrawing your Thrift Savings Plan (TSP) fund investments without triggering the 10 percent penalty, but still have the opportunity of FEGLI Life Insurance at Age 55
But when it comes to the Federal Employees Group Life Insurance  (FEGLI)   Program, it’s the reverse. The more you age, the less appealing it is to federal employees and annuitants. Take a look at what happens to your  FEGLI premium rates for Options A, B, and C when you hit age 55.

FEGLI Life Insurance at Age 55 and Its Increase Premium Rate

As per the new premium rates effective from the first pay period beginning on or after January 1, 2016, your FEGLI Option A premium rate for $10,000 of Insurance jumps from $2.38 for the age band 50-54 to $4.33 for the 55-59 age band.

For Option B, the premium rate per $1,000 of Insurance increases from $0.238 to $0.433. For Option C, (per multiple of Insurance), the premium rate increases from $1.99 to $3.21.

And the rate is going to increase even more as you age, ending with $13 for $10,000 of Option A Insurance after age 60.

The point here is that federal employees who have or are about to hit the Minimum Retirement Age (MRA) should start looking to buy life insurance from other insurers who might have more affordable and flexible products. It’s no secret that by comparison, FEGLI is a costly product for older, healthy federal employees who are eligible for full retirement benefits.