FEGLI stands for the Federal Employee Group Life Insurance plan. FEGLI is a group policy meaning that in order to be insured by it, you must be a member of the group. The group in this occasion is a federal employee. Because it’s a group policy there are no medical requirements as long as a person elects coverage when they are first starting their service with the government.
Basic FEGLI and what it does and means to you
There are 4 different accounts available with the FEGLI. However, for the purposes of this article we will focus on one account the Basic.
When you start in the Government you have the basic coverage by default This coverage changes throughout your time as a FED. When you’re between the ages of 18-35 2x your salary rounded up to the nearest $1000 and an additional $2000. After the age of 35 your additional coverage decreases annually until you reach 45 which then you only have your salary rounded to nearest $1000 and then the additional $2000 and this formula stays the same until you retire.
So for example 33 year old making $100,500 would have a basic FEGLI amount of $ 203,000
A 45 year old making $ 100,500 would have a basic FEGLI amount of $103,000
Basic in retirement: In retirement you have 4 different options
Free= 75% reduction. In this case after 65 your coverage will began to drop to 75% of your last salary.
Example: An employee making $100,000 at retirement age will have a policy of $25,000 after the deductions are finished.
Your are also able to get a No deduction, or a 50% deduction. These deductions cost you to keep them. You can explore these options. They are very valuable to those individuals that have health concerns that would prevent them from getting anything outside the government. Otherwise it makes more sense to get your own private coverage because the cost are much less.
Basic FEGLI is excellent for younger people with young children and a home with health issues. It is not so excellent for younger people with excellent health just because coverage can be gotten at a much better rate on the private market.
To learn more about how to get started, take our five-minute FEGLI quiz.