7 Ways to Reduce Your FEGLI Premiums as You Get Older Without Losing Necessary Coverage

Missy E
November 14, 2025

Key Takeaways:

Federal Employees’ Group Life Insurance (FEGLI) premiums increase significantly with age, but there are ways to manage costs without sacrificing essential coverage.
Understanding your coverage options and making strategic adjustments can help you balance affordability and protection as you approach retirement.

Understanding Why Your FEGLI Premiums Keep Rising

If you’ve noticed that your FEGLI premiums seem to climb every five years, you’re not alone. FEGLI coverage is age-based, meaning your rates automatically increase as you enter new age brackets. These hikes can become substantial in your 50s, 60s, and beyond, making it important to explore options to reduce costs while maintaining the coverage you need.

FEGLI consists of Basic coverage and several optional add-ons, each with its own cost structure. The key to keeping your premiums manageable is to reassess your coverage as you get older and adjust accordingly. If you ignore these changes, your premiums could become a significant financial burden in retirement.

Understanding why premiums increase can help you make informed decisions about adjusting your policy. The rising costs are tied to risk factors, as older individuals are statistically more likely to need a payout from their life insurance. This means that while you’re paying more, the insurance provider is adjusting its risk calculations to account for aging policyholders.

Below are seven strategies to help you reduce your FEGLI premiums without compromising the security of your life insurance coverage.

1. Reevaluate Your Coverage Needs Regularly

The life insurance coverage you needed in your 30s may not be the same as what you require in your 50s or 60s. Life events such as paying off a mortgage, children becoming financially independent, or having significant retirement savings can all reduce your need for high life insurance coverage.

Check how much coverage you actually need. If you have fewer financial obligations, you might not need as much life insurance as before.
Reduce excess coverage. If your dependents are financially secure, you can consider scaling back to lower-cost options.
Factor in your retirement savings. If you have a well-funded Thrift Savings Plan (TSP), pension, or other retirement funds, you may not need as much coverage as when you were younger and had more financial responsibilities.

Regularly reviewing your coverage can help you avoid paying for more than what is necessary. Many people make the mistake of keeping high coverage amounts without reassessing their financial situation, which can lead to unnecessary expenses.

2. Drop or Reduce FEGLI Option B Coverage

Option B coverage under FEGLI allows you to select additional multiples of your salary in life insurance coverage. While it may have been beneficial earlier in your career, its premiums rise sharply as you age.

If you no longer need extra coverage, consider dropping Option B entirely.
Reduce the number of multiples. If you originally selected five times your salary but no longer need that much, dropping to one or two multiples can make a significant difference in cost.
Compare your total insurance payout to your financial obligations. If your savings and other assets can cover potential expenses, reducing Option B can be a practical move.

Since Option B is often where premiums increase the most, reducing or eliminating it can be one of the most effective ways to cut costs.

3. Consider Dropping FEGLI Option C If Dependents Are No Longer a Factor

Option C provides coverage for your spouse and eligible children, but its necessity decreases once children become financially independent.

If your spouse has their own coverage or other financial protections, Option C may be unnecessary.
Since Option C premiums increase with your age, eliminating it can be a smart financial move.
Consider alternative coverage. If your spouse still requires financial protection, a private term life insurance policy may offer a better option at a lower cost.

Assess whether the coverage still serves a vital purpose, and if not, removing it can save you money.

4. Compare FEGLI to Private Life Insurance

FEGLI offers convenience, but it isn’t always the most cost-effective option. Private term life insurance policies may offer lower rates depending on your health and age.

If you’re in good health, a term life policy could provide similar coverage at a lower cost.
Private policies typically lock in a fixed rate for a set term, preventing the automatic age-based increases of FEGLI.
Some private policies allow you to convert to permanent coverage, which may be a useful option if you need long-term security.

Before making changes, compare your options to see if switching makes sense for your situation.

5. Take Advantage of Your FEGLI 75% Reduction Option at Retirement

FEGLI Basic coverage continues into retirement, but you have choices about how it decreases over time. The 75% Reduction option significantly lowers your premium costs.

With this option, your Basic coverage reduces gradually to 25% of its original amount, but you pay little to nothing in premiums after age 65.
If you don’t need full Basic coverage in retirement, this option allows you to maintain some coverage at no cost.
This is an ideal option for those who need some life insurance protection but want to avoid costly premiums in retirement.

Understanding how the reduction works can help you optimize your policy for retirement.

6. Reevaluate Your Need for Accidental Death & Dismemberment (AD&D) Coverage

FEGLI Basic coverage includes an Accidental Death & Dismemberment (AD&D) benefit, but as you age, your risk of accidental death decreases compared to health-related causes.

If you have sufficient financial planning for emergencies, the AD&D portion may not be necessary.
AD&D coverage does not provide additional benefits for deaths due to illness, which is a growing concern as you age.
Dropping this benefit can be a simple way to reduce your total FEGLI costs.

Review whether this coverage is still worth the added cost.

7. Adjust Your Coverage Before Reaching a New Age Bracket

Since FEGLI premiums increase every five years, timing your adjustments before entering a new age bracket can lead to immediate savings.

Age brackets increase at 50, 55, 60, 65, 70, and beyond. Planning adjustments before reaching these milestones can lock in savings.
Set reminders to review your coverage before each five-year mark. This can help you stay ahead of rising costs.

By planning in advance, you can prevent unnecessary premium hikes.

Keeping FEGLI Affordable Without Sacrificing Protection

FEGLI is a valuable benefit, but the increasing costs can make it difficult to justify keeping the same level of coverage throughout your career and retirement. By taking the time to reassess your needs, reducing unnecessary options, and exploring alternatives, you can lower your premiums while maintaining the security you need for yourself and your loved ones.

If you’re unsure about which FEGLI adjustments are best for your situation, get in touch with a licensed agent listed on this website. They can help you explore your options and find the best strategy to keep your coverage affordable.