How much does FEGLI cost in retirement?

Basic FEGLI reduces by 75% in retirement but remains free (no premium). Optional coverages are where costs can become problematic. Option A continues at $10,000 of coverage, and premiums increase with age. Option B (1-5 times salary) continues at full value, but premiums increase dramatically — often several hundred dollars per month for older retirees. Option C (family coverage) also continues with age-based premium increases. The key issue: while coverage continues, you're paying much higher rates in retirement when you may no longer need the same coverage level you had during your working years.

Should I keep FEGLI or get private insurance?

It depends on your health, age, and coverage needs. FEGLI's advantages: no medical underwriting, guaranteed issue, and convenience. Private insurance advantages: often lower premiums (especially for healthy individuals), fixed-term coverage that ends when you no longer need it, and potentially larger death benefits. Many federal employees benefit from keeping Basic FEGLI (it's free in retirement anyway) while replacing expensive Option B coverage with a lower-cost private term policy. We recommend getting a private insurance quote to compare — if you're healthy, you may be paying far more than necessary.

What is Option B and why is it expensive?

Option B is additional life insurance coverage equal to 1, 2, 3, 4, or 5 times your annual salary. During your working years, it's relatively affordable. The problem arises in retirement: Option B continues at full value (based on your salary at retirement), but premiums are based on your age and increase every 5 years. For a 70-year-old retiree with high Option B coverage, premiums can exceed $500-800 per month. By that age, many retirees no longer have the same coverage needs (mortgage paid off, kids financially independent), making these premiums difficult to justify.

Can I get private life insurance instead of FEGLI?

Yes. You're not required to keep FEGLI, and you can cancel optional coverages at any time (though you may not be able to re-enroll later without a life event). Many federal employees choose to keep Basic FEGLI since it's free in retirement, but replace costly Option B with a private term life insurance policy that ends when coverage is no longer needed. Private insurance requires medical underwriting, so your health, age, and lifestyle affect eligibility and pricing. We can help you compare options and determine if private coverage makes sense for your situation.

When should I review my FEGLI coverage?

You should review FEGLI at major life events: marriage, divorce, birth of children, home purchase, mortgage payoff, and as you approach retirement (ideally 5-10 years before). Many federal employees elect Option B early in their career when they have young children and a mortgage, then never revisit the decision. By retirement, circumstances have changed dramatically — kids are grown, the house is paid off, and the need for large life insurance coverage has diminished. Reviewing coverage every few years ensures you're not over-insured and overpaying for protection you no longer need.

FEGLI PLANNING

FEGLI Life Insurance: What Federal Employees Need to Know

The Federal Employees Group Life Insurance program is the largest group life insurance program in the world — but many federal employees are over-insured during working years and face skyrocketing premiums in retirement. Understanding your options can save you thousands.

REVIEW MY FEGLI COVERAGE →

Federal employee reviewing life insurance coverage options

"FEGLI gets expensive in retirement. Most feds should reduce or drop it — but not everyone."

— Mike Stevens, IAR

Coverage Types

Basic, Option A, B, C

Analysis

Cost vs. need in retirement

Alternatives

Private insurance comparison

Reduction Options

75% or 50% reduction

Cost

Included

THE PROBLEM

Does This Sound Familiar?

You were automatically enrolled and never reviewed it

Basic FEGLI coverage is automatic for most federal employees — but you may have elected optional coverages years ago without understanding the long-term cost implications.

Your FEGLI premiums skyrocket in retirement

Basic coverage reduces by 75% but remains free in retirement. Optional coverages (A, B, and C) continue at full value — but premiums increase dramatically with age, potentially costing hundreds per month.

You don't know if you're over-insured

Option B can provide up to 5 times your annual salary in coverage. That might make sense while raising kids with a mortgage, but do you still need it at age 65 with a paid-off house and grown children?

You've never compared FEGLI to private insurance

FEGLI was established in 1954 and offers guaranteed coverage without medical underwriting — but if you're healthy, private term life insurance can often provide better coverage at lower cost, especially as you approach retirement.

THE SOLUTION

How We Help

FEGLI Analysis & Insurance Optimization

We analyze your FEGLI coverage — Basic, Option A, Option B, and Option C — to determine if you have the right amount of coverage for your current life stage, and project what your premiums will cost in retirement.

According to OPM.gov, FEGLI covers more than 4 million federal employees and retirees. While FEGLI offers convenience and guaranteed issue, the cost structure changes significantly in retirement. We compare your FEGLI coverage to private alternatives and help you make informed decisions about what to keep, reduce, or replace.

Our FEGLI Planning Includes:

Complete FEGLI coverage review (Basic, A, B, C)
Lifetime premium projection into retirement
Coverage needs analysis based on your debts, dependents, and goals
Private term life insurance comparison and quotes
Option B reduction strategies (phased reduction vs full cancellation)
Post-retirement cost analysis and optimization
Beneficiary designation review
Estate planning coordination for life insurance proceeds

How it Works

It's just three steps

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Step 1) Coverage Review ▾

Analyze your current FEGLI elections, calculate what you’re paying now, and project costs through retirement.

Step 2) Needs Analysis ▾

Determine how much life insurance you actually need based on your debts, income replacement needs, and family situation.

Step 3) Optimize Coverage ▾

Compare FEGLI to private insurance options, model different coverage scenarios, and recommend the most cost-effective strategy.

COMMON QUESTIONS

FEGLI Planning FAQ

Everything you need to know about FEGLI life insurance and your options.

Schedule FEGLI Review