Overview of Federal Life Insurance for Retirees
Federal retirees who were covered by the Federal Employees' Group Life Insurance (FEGLI) program can maintain their coverage after leaving service, but the options differ from active‑employee rules. Continuation of FEGLI is optional, requires annual premiums, and may be limited to certain plan tiers. Those without prior FEGLI coverage can still purchase private or group policies, often through associations that serve former federal employees.
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Continuing FEGLI After Retirement
Retirees may elect to keep their Basic (Level 1) FEGLI coverage and, if they previously elected optional coverage, the Option A, B, or C plans. To stay enrolled, they must fill out a continuation request within 60 days of retirement and pay the full premium each year. Premiums are calculated on the retiree's age and the amount of coverage, and they increase annually as the retiree ages.
Eligibility and Cost Factors
Eligibility for continuation hinges on having been covered at the time of retirement and not having a break in service longer than 30 days. Costs rise with age because premiums are no longer subsidized by the government. For example, a 65‑year‑old retiree with $100,000 Basic coverage may pay several hundred dollars annually, while optional coverage can add a few hundred more per $10,000 of benefit.
Alternative Life Insurance Options
Retirees who lose FEGLI eligibility or seek lower premiums can explore:
- Group life insurance through professional associations such as the American Association of Retired Federal Employees (AARFE).
- Term life policies from commercial insurers, which often offer fixed rates for a set period (10, 20, or 30 years).
- Whole life or universal life policies that build cash value, suitable for those wanting a permanent product.
Comparing FEGLI Continuation and Private Policies
| Feature | FEGLI Continuation | Private Term Policy |
|---|---|---|
| Eligibility | Must have been covered at retirement | Open to anyone meeting underwriting criteria |
| Premium trend | Increases with age annually | Fixed for term length |
| Coverage limits | Basic up to $10,000 × salary; optional up to $1 M | Typically $100,000–$1 M |
| Medical underwriting | None for continuation | Required for most new policies |
| Beneficiary flexibility | Standard designation | Customizable |
Enrollment Process for FEGLI Continuation
Retirees should log into the Office of Personnel Management's (OPM) portal within the 60‑day window, select the desired coverage levels, and set up automatic premium payments. Missing the deadline means losing the right to continue, and re‑enrollment later is not permitted. OPM sends annual reminders with premium amounts and payment due dates.
Key Considerations When Choosing Coverage
Assess your financial dependents, existing assets, and overall estate plan. If you have a spouse or adult children who rely on your income, maintaining at least Basic FEGLI may provide a low‑cost safety net. For larger estates, a private term policy can offer higher benefits at a predictable cost. Also compare the tax treatment: FEGLI premiums are paid with after‑tax dollars, while some private policies may allow premium deductions under specific circumstances.
Resources and Next Steps
Visit the OPM website for FEGLI continuation forms, contact the Federal Benefits Center for clarification, and use reputable insurance comparison tools to evaluate private options. Consulting a financial planner familiar with federal benefits can ensure the chosen policy aligns with your retirement goals.