The FEGLI Basics
By Mickey Elfenbein

Mickey Elfenbein and the Armar Insurance Agency, LLC help protect the assets of individuals and small and mid-size companies using insurance products. 
Mr. Elfenbein has over 30 years of senior level experience in a variety of public and private enterprises. 

Upon your acceptance of employment, you were most likely automatically enrolled in the Federal Employees’ Group Life Insurance (FEGLI) Basic insurance. It’s possible to decline this coverage, but it’s usually rare for many federal employees to make that choice. Apart from it being an insurance based on group rates, the government finances the entire cost for postal employees and a third of the cost for non-postal employees.

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The Basic insurance amount is equivalent to the rounded up estimate of your annual basic salary to the next highest $1,000, with an additional $2,000 on top of that. For employees below the age of 45, this amount is increased without any extra cost for the employee while employees of age 35 and below have their coverage doubled. From age 36, the extra amount is gradually reduced  in equal steps within the period of 10 years until nothing is left.

Basic insurance covers accidental loss of life and dismemberment (also known as AD&D coverage). This means that if you die or suffer the loss of at least two of your body parts (For example: foot, hand, eye, etc.), your basic coverage will be paid in full, but a loss of just one body part would be just half of your basic coverage. The payment in case of one’s death is over and above the basic coverage amount. The AD&D coverage should not decline in the course of your employment, but would come to an end as soon as you retire.

Besides the original offer of the Basic coverage upon employment, you can choose to enroll if any of the following circumstances or situations arise:

-in the course of an open season

-provision of medical proof of insurability

-a life-changing event such as marriage and childbirth

To have the FEGLI Basic Coverage extended into retirement requires that you be enrolled in it as soon as the program allows you to, or for a minimum of 5 consecutive years before you are due to retire.

As soon as you retire you can continue with the full coverage value or let it decline to either 50 or 25 percent.

For the 50% option, you will have a 1% monthly reduction of your annuity until it is half the initial coverage value. If you do not want this reduction you will need to continue the payment of your premiums provided that you are alive.

For the 25% option, you will stop the payment of premiums once you’re 65 years old and your coverage will decline by 2% monthly until it is 25% of the initial coverage value.

The amount of your basic coverage cannot be increased but the options you have can allow for a reduction if you so choose.