The Basic Life is free for most USPS employees ( with the exception of USPS-OIG employees and non executive level Postal Inspectors who must pay for this coverage). Other Federal Employees pay 2/3 of the cost and the government pays 1/3 of the cost. In other words, it's Government subsidized. Currently, the rate is a flat $.15/$1000 coverage bi-weekly, no matter what age you are. Because life insurance typically gets more expensive as you age, it becomes a better value at the older ages.
The amount of coverage provided by FEGLI Basic is equal to your annual salary rounded up to the next highest $1000 plus $2,000. If you are under age 45, this amount of coverage is multiplied by the following factor (age multiplier):
age 35 or less - 2.0 age 37 - 1. 8 age 39 - 1.6 age 41 - 1.4 age 43 - 1.2
age 36 - 1.9 age 38 - 1.7 age 40 - 1.5 age 42 - 1.3 age 44 - 1.1
If an employees dies in an accidental death prior to retirement and extra benefit of the employees annual salary rounded up to the next $1000 plus $2000 is included. ( No"age multiplier" is used on the accidental death portion of this benefit).
FEGLI "Basic" can be taken into retirement in 3 ways:
1. 75% reduction in benefit at age 65 - Usually the best value since it's government subsidized.
2. 50% reduction in benefit at age 65 - Often not a good value.
3. No reduction in benefit at age 65 - Often no a good value.
Option A is and additional $10,000 of coverage. It includes an additional $10,000 of coverage if death occurs as a result of an accident. It's rates increase every 5 years as shown below. These rate increases become effect the pay period after they reach the ages shown below:
Age Bi-Weekly
Under age 35 $.20
35-39 $.30
40-44 $.40
45-49 $.70
50-54 $1.10
55-59 $2.00
60 & up $6.00
Employees may elect one, two, three, four or five times their annual basic pay rounded to the next highest $1000. The cost of this coverage increases the pay period after reaching the next age group. The cost per $1000 of option B is shown below:
Age Bi-Weekly
Under age 35 $.02
35-39 $.03
40-44 $.04
45-49 $.07
50-54 $.11
55-59 $.20
60-64 $.44
65-69 $.54
70-74 $.96
75-79 $1.80
80 & up $2.64
Employees may elect up to 5 multiples of this coverage. Each multiple is $5,000 on the employee's spouse and $2500 on eligible children. The cost of this coverage increases the pay period after reaching the next age group The rate is based on the age of the employee, not their family members. The cost per multiple of option C is shown below:
Age Bi-Weekly
Under age 35 $.22
35-39 $.27
40-44 $.41
45-49 $.59
50-54 $.92
55-59 $1.48
60-64 $2.70
65-69 $3.14
70-74 $.3.83
75-79 $5.26
80 & up $7.20
1. All Federal Employees pay the full cost of the any FEGLI options. It's not government subsidized.
2. It is underwritten by private industry insurers who expect to make a profit.
3. It is administered by a government office (OFEGLI) which adds another layer of cost that is passed along to you.
4. Your premiums increase significantly every 5 years as you age.
5. Most importantly, no evidence of insurability is required upon your initial enrollment or during a life event or open season. In
essence, FEGLI accepts everyone regardless of health history, smoking status, build, and other factors which may affect ones
longevity. If you are a male, smoker, in below average health, this may be the best value you can find in life insurance, However, if you
are a non-smoker in average to above average health, you may benefit tremendously by replacing FEGLI "option B" with a plan we offer.
Better Than Fegli
FEGLI stands for Federal Employees Group Life Insurance. This is the life insurance plan offered to all full time civilian Federal Employees. It consists of four different components, Basic, Option A, Option B and Option C. Each component has a separate cost (premium). Employees are automatically eligible for this coverage upon hire and employees can add or increase their coverage without having to provide evidence of insurability during "life events" or periodic "open seasons". The last open season was in September of 2004 and there will be an open season coming up in September of 2016. You must elect FEGLI basic in order to be able to add any of the options. You may elect any combination of options you find suitable. Click here for more information on FEGLI and its rates.
First of all, the FEGLI Basic Life is free for most USPS employees and the Government pays a portion of the Basic Life premiums for all other career Federal Civilian Employees. In many cases, Federal Employees are better off retaining this coverage and replacing the optional coverage with outside coverage.
The Optional FEGLI is the expensive part, more specifically "Option B" which allows an employee to elect up to 5 times their pay in additional coverage.
Here are the major reasons why FEGLI "Option B" is so expensive:
Also keep in mind that your FEGLI premiums are paid bi-weekly, which can be a lot more costly than it appears.
"Specializing in the Life Insurance and Retirement Needs of Federal Employees".