The FEGLI

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.

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.

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.

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.

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.