Life Insurance for Federal Employees 2026: FEGLI vs. Private Term Coverage
If you work for the federal government, life insurance for federal employees probably arrived in your benefits packet before you finished your first week on the job. The Federal Employees’ Group Life Insurance (FEGLI) program automatically enrolls most new federal employees in Basic coverage, and that automatic enrollment makes it easy to assume you are set for life. But is FEGLI actually the best deal for you — or are you overpaying for coverage you could replace with a cheaper private policy? In this 2026 guide, we break down exactly how FEGLI works, what it costs under the current official rates, where it falls short, and how to compare it against private term life insurance so you can make a confident decision.
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What Is FEGLI and How Does It Work?
The Federal Employees’ Group Life Insurance program was established by Congress on August 29, 1954, and it has grown into the largest group life insurance program in the world, covering more than 4 million federal employees, retirees, and their family members. FEGLI is administered by the U.S. Office of Personnel Management (OPM), while a private contractor — the Office of Federal Employees’ Group Life Insurance (OFEGLI) — processes and pays claims.
FEGLI is group term life insurance. That means it provides pure death protection with no cash value, no investment component, and no paid-up value. If you stop paying premiums, the coverage stops. That simplicity is a feature, not a bug: the money you save by not paying for cash value can go toward more coverage or other goals.
Most new federal employees are automatically covered by Basic life insurance unless they formally waive it in writing. Your payroll office deducts the premium from your paycheck. Basic coverage is a group term policy based on your salary, and the government pays one-third of its cost while you pay the remaining two-thirds. Your age does not affect the price of Basic — everyone pays the same rate per $1,000 of coverage.
On top of Basic, FEGLI offers three optional layers you must actively elect: Option A (Standard), Option B (Additional), and Option C (Family). You must carry Basic before you can add any of the options, and unlike Basic, none of the options are automatic. The full cost of all options is paid by you, and the price depends on your age.
The Four Layers of FEGLI Coverage Explained
Understanding how much life insurance for federal employees you actually have starts with decoding the four FEGLI components. Your Standard Form 50 (SF-50) lists your coverage as a two-character code in Block 27 — that code tells you and your HR office exactly which layers you carry.
- Basic: Your annual basic pay rounded up to the next $1,000, plus $2,000. For example, a GS-12 earning $90,400 would carry roughly $93,000 in Basic coverage.
- Option A — Standard: A flat $10,000 of additional term coverage. One flat price per age band.
- Option B — Additional: One to five multiples of your annual basic pay, rounded to the nearest $1,000. This is where most federal employees add meaningful coverage.
- Option C — Family: One to five multiples for your dependents. Each multiple provides $5,000 for your spouse and $2,500 for each eligible dependent child.
Because Basic and Option B are tied to your salary, your coverage grows automatically as you climb the pay scale — no medical exam and no underwriting required. That is a genuinely valuable feature for anyone whose health has changed since they were hired.
FEGLI Premium Rates for 2026: What You Actually Pay
OPM publishes official FEGLI premium rates on its website, and the rates below are the current employee rates in effect. Basic life insurance costs 16 cents per $1,000 of coverage biweekly, or $0.3467 per $1,000 monthly — the same price for every age. That flat pricing is the key to understanding whether FEGLI is a bargain or a drain for you personally.
| FEGLI Option B (Additional) — Monthly Cost per $1,000 | Biweekly | Monthly |
|---|---|---|
| Under 35 | $0.02 | $0.043 |
| 35–39 | $0.02 | $0.043 |
| 40–44 | $0.03 | $0.065 |
| 45–49 | $0.06 | $0.130 |
| 50–54 | $0.10 | $0.217 |
| 55–59 | $0.18 | $0.390 |
| 60–64 | $0.40 | $0.867 |
| 65–69 | $0.48 | $1.040 |
| 70–74 | $0.86 | $1.863 |
| 75–79 | $1.80 | $3.900 |
| 80 and over | $2.88 | $6.240 |
Option A (the flat $10,000 Standard policy) runs $0.43 per month for employees under 40, $1.30 monthly in the 45–49 band, and jumps to $13.00 per month once you pass 60. Option C family coverage costs between $0.43 and $16.90 per multiple per month depending on your age band, with one multiple equal to $5,000 of spouse coverage plus $2,500 per child.
FEGLI vs. Private Term Life Insurance: The Real Comparison
Here is the honest math every federal employee should run before assuming FEGLI is the best option. For a healthy 35-year-old, a private 20-year term policy with $500,000 of coverage typically costs $20 to $35 per month on the open market. The same employee maxing out FEGLI Option B at five times a $75,000 salary ($375,000 of coverage) pays roughly $0.043 × 375 = $16.13 per month — competitive, but only at younger ages.
The picture flips as you age. Because Basic’s premium never rises with age, FEGLI Basic becomes a relative bargain for employees in their 50s and 60s compared with the open market. But Option B’s age-band pricing climbs steeply: a 60-year-old pays $0.867 per $1,000 monthly, and an 80-year-old pays $6.24 per $1,000. At those prices, a private policy with locked level premiums may beat FEGLI — if you can still qualify medically.
| Factor | FEGLI | Private Term Life Insurance |
|---|---|---|
| Medical underwriting | None — guaranteed issue for most employees | Health questions and often a paramedical exam |
| Premium stability | Basic never rises; Options rise by age band | Level for the full term (10–30 years) |
| Portability | Carries into retirement, with reductions at 65 | Owned by you; goes wherever you go |
| Cash value | None — pure group term | None with term (whole life builds cash value) |
| Best for | Older employees, impaired-risk workers, quick coverage | Younger healthy employees who want level long-term pricing |
When FEGLI Makes Sense — and When It Doesn’t
The smartest approach to life insurance for federal employees is rarely “all FEGLI” or “no FEGLI.” Most financial planners recommend a blend. FEGLI deserves a place in your plan when any of these describe you:
- You have health issues. FEGLI requires no medical exam and no health questions for most employees, making it one of the few ways to get coverage if you have diabetes, heart disease, or another condition that complicates private underwriting.
- You are 50 or older. Basic’s flat rate looks better every year, and converting to a private policy gets more expensive as you age.
- You want instant coverage. There is no waiting period and no exam — your protection starts with your first payroll deduction.
- You want to cover a gap quickly. FEGLI is a solid bridge while you shop, underwrite, and fund a private policy.
On the other hand, FEGLI is usually the wrong primary choice for younger, healthy employees. The reasons are concrete: private term policies lock in level premiums for 20 or 30 years, FEGLI Option B premiums climb with every age band, and Basic’s flat rate is actually expensive relative to private quotes for someone in their 20s or 30s. A 30-year-old paying $0.3467 per $1,000 for Basic is paying more than the going rate for a private policy — with far less flexibility.
There is also the retirement trap. FEGLI coverage automatically reduces after age 65 unless you elect to continue it at a higher premium: Basic and Option A reduce by 2% per month (down to 25% of the original amount) if you do not elect the “no reduction” option, and Option B follows a similar post-65 reduction schedule. Many federal retirees discover their coverage has quietly shrunk just when final expenses and estate costs loom largest. A private level-term policy avoids that surprise entirely.
How Much Life Insurance Do You Actually Need?
Before you decide between FEGLI and private coverage, run the numbers on your actual need. A widely used rule of thumb is 10 to 15 times your annual income, but the real answer depends on your debts, dependents, mortgage, college plans, and how much income your family would need to replace. Federal employees often have a pension and survivor benefits that reduce the gap — but Social Security survivor benefits and a FERS annuity rarely replace 100% of your take-home pay.
Use our how much life insurance do I need guide to work through the DIME method (Debt, Income, Mortgage, Education) and arrive at a coverage target. Once you know the number, compare what FEGLI gives you against the cost of closing the gap with a private policy.
Leaving Federal Service: Your 31-Day Conversion Window
If you leave federal service — whether for a private-sector job, retirement, or a career change — you do not simply lose your FEGLI coverage. You get 31 days of free coverage after your separation, and during that window you can convert your FEGLI to an individual policy without a medical exam. That conversion right is valuable if your health has deteriorated, because it bypasses underwriting entirely.
The catch is price: FEGLI-converted individual policies are priced on individual rates that are often less competitive than what a healthy person would get on the open market. The standard advice is to shop a private term policy before you separate, get medically underwritten while you are still healthy and employed, and only use the FEGLI conversion as a fallback if that underwriting comes back with bad news.
Step-by-Step: Building Your Federal Employee Coverage Plan
Follow these steps to turn FEGLI from a default deduction into a deliberate part of your financial plan:
- Decode your SF-50. Find Block 27 and look up your coverage code to see exactly which FEGLI layers you carry today.
- Run the FEGLI calculator. OPM’s official FEGLI calculator shows your current coverage, your premium withholdings, and how coverage changes into retirement.
- Calculate your coverage gap. Total your debts, income replacement needs, mortgage, and education costs, then subtract your FEGLI and any survivor benefits.
- Get private quotes. Shop level term policies for the gap — especially if you are under 50 and healthy, where private pricing beats FEGLI.
- Compare apples to apples. Compare each FEGLI layer against the private policy’s total lifetime cost before you waive or reduce anything.
- Keep Basic if it makes sense. For many employees, keeping Basic (which is subsidized one-third by the government) while layering private term on top is the optimal structure.
Frequently Asked Questions
Is FEGLI life insurance free?
No. You pay two-thirds of the cost of FEGLI Basic coverage through payroll deductions, and the federal government pays the remaining one-third. All optional FEGLI layers (Options A, B, and C) are paid entirely by you. The premium is simply deducted from your paycheck, which makes it easy to forget you are paying for it.
Can I have both FEGLI and a private life insurance policy?
Yes, and many federal employees do exactly that. FEGLI and private term life insurance are completely independent — there is no rule limiting your total coverage. A common strategy is keeping FEGLI Basic (subsidized and guaranteed) while adding a private level-term policy for the bulk of your coverage needs. Just make sure your total coverage matches what your family would actually need, not what your benefits package happens to offer.
Does FEGLI require a medical exam?
No. FEGLI is a group term program with guaranteed issue for most employees — there are no medical exams or health questionnaires when you enroll during your initial eligibility period or a FEGLI open season. That makes it extremely valuable for employees who could not qualify for private coverage due to health conditions. The trade-off is that FEGLI generally costs more than a healthy person would pay on the private market.
What happens to my FEGLI when I retire?
You can carry FEGLI into retirement as long as you have been covered for the five years before retirement or the full period since your first eligibility. The important catch is post-65 reduction: if you do not elect the “no reduction” option, Basic and Option A reduce by 2% per month after age 65 until they reach 25% of the original amount, and Option B reduces on a similar schedule. Election decisions are made at retirement, so review them carefully.
What happens to FEGLI if I leave my federal job?
You receive 31 days of free FEGLI coverage after separating, and you may convert to an individual policy without a medical exam during that window. The conversion premium is based on your attained age and is often more expensive than a private term policy for healthy applicants. If you are leaving for the private sector, shop private coverage before you go so you are never uninsured.
How do I change my FEGLI beneficiary?
Complete Standard Form 2823 (Designation of Beneficiary, Federal Employees’ Group Life Insurance) and submit it to your HR office if you are an active employee, or to OPM’s Retirement Office if you are an annuitant. Keep a copy for your records, and update the form after major life events such as marriage, divorce, or the birth of a child so your coverage goes to the people you intend.
Is FEGLI term or whole life insurance?
FEGLI is pure group term life insurance. It has no cash value, no paid-up value, and no investment component — coverage exists only while premiums are being paid. If you want a policy that builds cash value, you would need a separate whole life or universal life policy, which is a different product with a much higher premium. For most federal employees, term coverage — FEGLI or private — is the right building block.
Video: FEGLI Options Explained for Federal Employees
This video walks through FEGLI Options and how they apply to your federal benefits:
Related Resources
- OPM — Federal Employees’ Group Life Insurance (official program page and premium tables)
- OPM FEGLI Calculator — estimate your coverage and premiums
- NAIC Consumer Information — state insurance regulator resources
Get Your Free Life Insurance Quote
FEGLI is a great baseline, but it should never be the whole conversation. Whether you are a 30-year-old GS-9 looking for cheap level term coverage or a 58-year-old executive trying to lock in rates before retirement, comparing FEGLI against private quotes takes five minutes and can save you thousands over the life of your policy. Get your free life insurance quote today and see exactly where FEGLI fits — and where a private policy closes the gap.
Related reading: term life vs. whole life insurance · no medical exam life insurance · convertible term life insurance · life insurance for new parents · life insurance for seniors over 80
