What Happens to Your FEGLI Premiums Once You’re Out of Federal Service for Good

Missy E
November 14, 2025

Key Takeaways

After leaving federal service, your Federal Employees’ Group Life Insurance (FEGLI) coverage doesn’t automatically end, but the costs and coverage terms change significantly.
Understanding the options for maintaining, converting, or canceling your FEGLI policy is essential to avoid surprise costs and ensure your life insurance aligns with your retirement goals.

What FEGLI Coverage Looks Like After You Retire

If you’re planning to retire or have already retired from government service, your FEGLI policy remains in place under certain conditions. However, this continuation is not identical to what you had while actively employed. The structure of premiums, coverage reductions, and the types of benefits available all shift.

Eligibility for Carrying FEGLI Into Retirement

To keep your FEGLI coverage in retirement, you must meet the following conditions:

You are entitled to retire on an immediate annuity.
You were enrolled in FEGLI for the five years immediately before retirement or for your entire period of federal service, if less than five years.

Meeting these requirements allows you to continue some or all of your Basic and Optional FEGLI coverage.

How Premiums Change Once You Retire

FEGLI premiums operate on an age-banded structure. This means your premiums increase as you age, particularly for Optional coverages. Once you retire, the government no longer pays a portion of your premiums (except for Basic coverage, under certain reduction options), and you assume more of the cost burden.

Basic Insurance Premiums

For Basic coverage, retirees have three choices:

75% Reduction: Your coverage reduces by 2% each month starting at age 65 (or retirement, if later), until it reaches 25% of the original amount. This is the default and most cost-effective option—no premium is charged after age 65.
50% Reduction: Reduces to 50% of original coverage. You pay slightly higher premiums, even after age 65.
No Reduction: Keeps the full Basic coverage amount. Premiums are significantly higher and continue for life.

Optional Insurance Premiums

Unlike Basic, all Optional FEGLI coverage becomes increasingly expensive with age. Optional coverage includes:

Option A (Standard): Flat $10,000 policy. Premiums increase every five years until age 80.
Option B (Multiple of Salary): You could have elected 1 to 5 multiples of your final salary. Premiums rise sharply with age and can become costly after age 65.
Option C (Family): Covers spouse and eligible dependent children. Also increases in cost as you age.

After retirement, you can choose to:

Continue coverage and pay increasing premiums.
Elect to reduce coverage at no cost after age 65.
Cancel optional coverage entirely.

What Happens at Age 65

Age 65 is a critical milestone for FEGLI. If you’re retired and you elect the 75% reduction option for Basic insurance, you stop paying premiums at 65. The same applies to Optional coverages if you choose to let them reduce to zero.

However, if you opt for No Reduction or retain Optional benefits without reduction, you will continue paying premiums—often significantly higher than during active service.

Conversion and Portability Options

If you don’t meet the criteria to carry FEGLI into retirement, or if you want a different kind of coverage, you may consider conversion.

FEGLI Conversion

You can convert your FEGLI coverage to an individual policy from a private insurer without undergoing a medical exam. However:

You must apply for conversion within 31 days of separating from service.
This is often more expensive than continuing coverage but may be beneficial for those with health conditions.

Portability Isn’t Available

FEGLI does not offer portability in the way private group policies might. You can’t simply keep the same group plan and premium structure after leaving service.

Impact of Cancellation or Reduction

Some retirees choose to cancel parts of their FEGLI due to increasing premiums or overlapping coverage from other life insurance sources. Before canceling, weigh the implications:

You cannot reinstate FEGLI once canceled.
If you reduce coverage, that decision is generally irreversible.
Review whether your survivor benefits, estate planning needs, or debts require ongoing coverage.

Estimating Your Long-Term Costs

Understanding how FEGLI premiums evolve is key to your retirement planning. Here are some points to consider:

Optional coverages, especially Option B, can grow prohibitively expensive by your 70s.
The 75% reduction for Basic coverage remains a cost-efficient solution for most retirees.
Monthly costs for Option B at age 70 can be more than ten times what you paid in your 50s.

You can estimate your premium costs using calculators provided by OPM or consult a professional to assess affordability.

Alternatives to Consider

If you’re finding FEGLI premiums burdensome after retirement, you might consider:

Purchasing a term or whole life policy separately (though subject to health underwriting).
Using savings or investments to self-insure, especially if you no longer have dependents.
Re-evaluating your coverage each year to match your financial situation and goals.

Timelines to Remember

Here’s a brief look at what happens over time with FEGLI after separation from service:

0-31 days after separation: Free temporary coverage continues. You can apply for conversion during this period.
First 12 months: You may convert coverage (with some extensions possible).
Age 65: Key age for free coverage under 75% reduction and Optional coverage reduction.
Every 5 years after age 50: Optional coverage premiums rise. Evaluate regularly.

The Role of Survivor Benefits

FEGLI can be an important part of the financial support left for your spouse or dependents. While your pension might come with a survivor benefit, FEGLI can supplement that income. Make sure your beneficiaries are updated and your election choices reflect your wishes.

Survivor benefits under FERS or CSRS are fixed and might not cover all future expenses.
FEGLI provides a lump sum that may help with final expenses, debts, or estate costs.
Consider how long your spouse may outlive you and whether other financial protections are in place.

How to Make Changes After Retirement

You cannot enroll in new FEGLI coverage once retired. However, you can:

Cancel existing coverage at any time.
Elect reductions in Optional or Basic coverage if eligible.
Change beneficiaries through your retirement system.

These actions should be done through OPM and can take time, so plan early.

Getting the Right Help

The decisions around FEGLI premiums and coverage in retirement are not one-size-fits-all. You’ll need to look at your total financial picture—annuities, Social Security, TSP withdrawals, and healthcare costs all play a role.

Retirees often benefit from:

Speaking with a financial planner who understands federal retirement.
Reviewing FEGLI cost projections at milestone ages like 60, 65, 70, and 75.
Getting help from a licensed agent who specializes in public sector benefits.

Planning for FEGLI in Your Post-Federal Life

Your FEGLI policy doesn’t vanish when you leave government service—but it doesn’t stay the same either. Premiums increase, benefits reduce, and decisions become irreversible. That’s why understanding how your coverage works after separation is just as important as choosing it during your career.

Whether you keep it, reduce it, convert it, or cancel it, you should make your decision based on your personal and financial goals. And if you need help interpreting your options, speak with a licensed agent listed on this website for professional advice tailored to your situation.