FEGLI Calculator

How FEGLI Basic coverage is calculated

The math is simple but easy to misread. Take your annual salary, round it up to the nearest $1,000, then add $2,000. A GS-12 earning $87,500 gets $88,000 + $2,000 = $90,000 in Basic coverage. Someone earning exactly $88,000 gets the same $90,000. Someone at $88,001 rounds up to $89,000, giving them $91,000.

The government pays one-third of the total Basic premium cost. You pay the other two-thirds. The employee share is a flat $0.16 per $1,000 of coverage biweekly, regardless of age. That $90,000 policy costs $14.40 per pay period at any age. This makes Basic coverage a good deal at every age.

Age-banding is the central fact of FEGLI's optional coverages, not Basic. Options A, B, and C all have premiums that rise steeply with age. The coverage amount stays constant while the cost climbs.

Options A, B, and C

Basic coverage is automatic for most new hires unless they waive it. The three optional coverages require affirmative election, typically within 60 days of hire or during open seasons.

Option A adds a flat $10,000 of coverage. The biweekly premium is a flat dollar amount (not per $1,000) that ranges from $0.20 under age 35 to $6.00 at age 60-64. Employees still working at 65 keep paying $6.00. Once you're retired and 65, Option A becomes free and shrinks 2% a month until $2,500 is left. It's modest coverage at modest cost for most age bands.

Option B is where federal employees face real decisions. You choose 1x to 5x your annual salary in coverage. The cost scales with both your salary and your age band. At 5x on a $90,000 salary, you're insuring $450,000. Under age 35, that costs $9.00 per pay period. At age 55-59, the rate is $0.18 per $1,000 biweekly, putting that same policy at $81.00 biweekly, or $2,106 per year. If you make it to 60-64 still carrying 5x Option B, you're paying $0.40 per $1,000 biweekly. That's $180.00 per pay period, over $4,680 annually, for a policy you could have replaced with a 20-year term at 40 for a fraction of that cost.

Option C covers family members. Each multiple provides $5,000 of coverage for a spouse and $2,500 for each eligible child. You can elect up to 5 multiples, giving a maximum of $25,000 for a spouse and $12,500 per child. You pay one premium per multiple, set by your age band, no matter how many family members it covers. Under 35 that's $0.20 per multiple biweekly; at 55-59 it's $1.33.

The Option B math at age 55 vs. private term

A 55-year-old federal employee with a $95,000 salary carrying 3x Option B has $285,000 in Option B coverage. The biweekly premium at age 55-59 is $285,000 / 1,000 * $0.18 = $51.30 biweekly, $1,334 per year. A 20-year term policy of $285,000 purchased at age 40 in good health would have cost roughly $400-600 per year. The same person at 55, if they need to buy new term coverage now, might pay $1,200-2,500 per year on the private market depending on health. FEGLI Option B is roughly cost-competitive at older ages for people in average or worse health, but remains more expensive than term for healthy employees who planned ahead.

The problem is that most federal employees don't do this comparison at 40. They carry Option B on autopilot, and by 55 they're paying significantly more than they would have if they'd bought term at 40 and saved the difference. If you're under 50 and healthy, the calculation almost always favors buying term and reducing or dropping Option B.

The three Basic reduction choices at retirement

At retirement, you lock in how your Basic coverage will behave for the rest of your life. There are three options.

The 75% Reduction option costs $0.3467 per $1,000 a month until 65. On a $90,000 Basic policy that's $31.20 a month. After you turn 65 it's free, and coverage decreases 2% of the original per month until 25% is left. That takes 37.5 months. You end up with $22,500 for life and pay nothing for it.

The 50% Reduction option costs $1.0967 per $1,000 a month until 65: $98.70 a month on that $90,000 policy. After 65 it costs $0.75 per $1,000, or $67.50 a month, for life, while coverage drops 1% a month until it settles at $45,000. Retire at 62 and you pay $2,430 more than the 75% path before 65, then $810 a year after, to keep an extra $22,500 of coverage. For most people the 75% option is still the right answer.

The No Reduction option costs $2.5967 per $1,000 a month until 65 and $2.25 after, for life. On that $90,000 policy that's $233.70 a month before 65 and $202.50 a month ($2,430 a year) after. Retire at 60 and live to 85, and you pay about $60,750 more than the 75% path to keep the full $90,000 instead of $22,500. The extra $67,500 of death benefit costs nearly that much in premiums. The math rarely works out in the No Reduction direction.

One practical consideration: do you actually need life insurance in retirement? If your mortgage is paid, your children are grown and self-supporting, and your surviving spouse has their own pension income, the answer may be no. Carrying expensive FEGLI coverage into a retirement where you have no dependents is paying for something nobody needs.

The five-year rule

You must have been covered under FEGLI for the 5 years immediately preceding retirement to carry any coverage into retirement. This is often called the five-year rule, and it trips up employees who waived coverage early.

If you waived Basic coverage when you were first hired and never enrolled, you don't have the 5 years of enrollment and cannot carry FEGLI into retirement regardless of how long you've worked for the government. The same applies to Optional coverages: you need 5 continuous years of that specific option to carry it forward.

FEGLI open seasons are rare. OPM authorized the most recent one in 2016. There's no guarantee of another before you retire. If you've been without FEGLI coverage for a while and care about keeping it, the only reliable path is a qualifying life event, which lets you enroll without a medical exam within 60 days.

Option C: when family coverage makes sense

Option C is often overlooked, but it has a specific use case. If your spouse has a medical condition that makes private life insurance unaffordable or unavailable, FEGLI Option C provides coverage without underwriting. Five multiples give your spouse $25,000. That won't replace an income, but it covers funeral costs and a few months of bills. At younger ages the cost is minimal: $1.00 biweekly for all 5 multiples if you're under 35.

For families with healthy spouses who can qualify for private term insurance, private coverage typically wins on both price and flexibility. A healthy spouse can often buy far more private term coverage than Option C's $25,000 maximum for a similar premium. But FEGLI Option C is the right call when health issues eliminate private market access.

FEGLI and your FERS retirement decision

Life insurance and retirement income interact in ways that aren't obvious. If you elect the FERS survivor benefit for a spouse, they receive a portion of your pension for life after you die. That benefit partly substitutes for life insurance. A spouse with guaranteed survivor annuity income needs less of a death benefit than a spouse with no guaranteed income.

The survivor benefit costs 10% of your pension (for the full election). On a $30,000 annual FERS pension, that's $3,000 per year you're giving up to provide a $15,000 annual survivor annuity. Stacking full FEGLI No Reduction coverage on top of that survivor benefit is paying for two forms of spouse protection simultaneously. For most federal retirees, the survivor annuity plus Social Security survivor benefits plus 75% Reduction Basic FEGLI is more than adequate protection.

No waiver of premium, but a living benefit

FEGLI has no waiver of premium for disability. If you retire on disability and meet the 5-year rule, you keep your coverage, but you keep paying for it at annuitant rates. Many private term policies sell a waiver-of-premium rider; FEGLI doesn't offer one.

What FEGLI does have is a living benefit. If you're diagnosed as terminally ill with a life expectancy of nine months or less, you can take your Basic insurance as a cash payment while you're alive. Employees can take all or part of it; annuitants can take only the full amount. Options A, B and C can't be paid as a living benefit.