FEGLI Life Insurance Review (2023)
In this FEGLI life insurance review, we cover the four different term life insurance policies offered by the federal government to its employees. FEGLI approves all employees making this a good option for those with health issues. The Basic Plan is the most affordable option offered by FEGLI, while Plans A, B, and C become less affordable as individuals reach age 60.
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UPDATED: Oct 2, 2022
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- The federal government offers term life insurance to all its employees called the Federal Employee Group Insurance program
- FEGLI life insurance company offers four different term life insurance plans with varying rates and coverage
- The higher coverage plans are not as affordable as those purchased from individual providers of term life insurance
If you are a government employee you are likely already in possession of a term life insurance policy through the federal employee group life insurance program or FEGLI.
This unique life insurance policy is an automatic benefit for all federal employees, but how does it hold up against other life insurance policies on the open market?
We will review that and all the other need-to-know information in our FEGLI life insurance review.
Keep reading to learn more about how FEGLI pricing works, how much coverage you can expect, and more.
Are you curious about other life insurance options? Before jumping into this FEGLI life insurance review, enter your ZIP code above and we will help you find the right provider for you.
What is FEGLI life insurance?
FEGLI is a federal group life insurance policy offered exclusively to federal employees by the US government. Whether you work in government law or are an FBI agent, you are eligible for this insurance.
FEGLI life provides term life policies for all employees automatically when they are hired. There is no medical underwriting for any of the FEGLI plans, so no matter how healthy you are, if you are hired, you are approved.
Because the funds for the insurance are provided directly from the government, there is no A.M. Best rating or complaint index from the NAIC.
One of the most convenient aspects of the FEGLI life insurance plan is that the premiums are taken directly from your paycheck every month. This streamlines the process and ensures you are never late in paying.
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Does FEGLI have affordable rates?
The short answer is that it depends on your plan, but generally no, it is not easy to find cheap FEGLI life insurance quotes.
Affordable FEGLI life insurance is limited to the basic plan. FEGLI life insurance rates for the basic plan are consistent and don’t fluctuate with age.
They may be adjusted as a whole by the government based on claims made over time.
Overall the Basic Plan is the most affordable of the plans because the monthly premiums are supplemented by the government, who covers ⅓ of the cost.
Plans A, B, and C are all calculated by age and by coverage. However, they are, for the most part, not as affordable as other plans offering the same amount of coverage.
For example, here’s a quick comparison of some term life insurance rates from other companies compared to FEGLI.
Each policy is as similar as the different quote tools will allow, with coverage of about $100,000 each, except for FEGLI which calculated up to $115,000.
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FEGLI is generally not affordable outside of the basic plan. If you are wanting more than minimal term life insurance coverage, you may need to supplement with a separate life insurance policy.
What life insurance coverage does FEGLI offer?
FEGLI offers term life insurance, with coverage options varying depending on the plan that you choose. FEGLI offers four plans, Basic Coverage, Plan A, Plan B, and Plan C.
A benefit of FEGLI is that all their plans base rates either on age or standard for all employees.
FEGLI basic life insurance coverage is what all federal employees are automatically enrolled in upon being employed.
The benefit of this plan is that the rates aren’t based on age, gender, or any of the other factors that normally determine life insurance rates.
Instead, it is based on your salary, charging 32 cents per $1,000 of coverage every month.
This plan is the only plan this is partially supplemented by the government.
Another benefit that is offered for younger employees is that the government will double the death benefit should it be needed before the policyholder is 35.
This benefit is continued until age 45, while the amount of the increased death benefit offered is reduced after 35.
This plan adds $10,000 of additional coverage and the premium rates are based on age. Like the basic coverage, monthly premiums are calculated by charging the rate per $1,000 of coverage that you receive.
This plan allows you to increase your coverage amount, up to five times your salary with rates increasing as you age.
This is the family plan option from FEGLI, and it allows you to add coverage for your spouse and dependents. This coverage is up to $25,000 for spouses and $12,500 for dependants.
The Pros and Cons of FEGLI Life Insurance
What are the pros?
FEGLI has no medical exam or medical underwriting of any kind. As such, you are guaranteed to be approved just by being a federal employee.
For those who are deemed uninsurable by individual policies, FEGLI offers basic coverage that can provide some support to family members after you pass.
You don’t have to make separate payments to participate in the FEGLI program, your paycheck is deducted automatically unless you opt-out of coverage.
This makes it easy to stay up to date on your premiums and never miss a payment.
FEGLI can continue into your retirement and provide no-cost coverage after the age of 65. For those looking to live more affordably after they retire, this can be a game-changer.
Traditional life insurance policies will factor in many other things, such as gender to determine rates, however, FEGLI does not.
Due to the higher life expectancy of women to men, men often pay more for life insurance than women of the same age. FEGLI pricing can be a great benefit to men and be more affordable because of this.
What are the cons?
Because of the structure of FEGLI, you may not get the coverage you need at a cost that you can afford with plans B and C.
These plans, depending on the amount of coverage you are looking for, can be exorbitant in price compared to other individual policies out there.
FEGLI only offers term life insurance policies. This means the policy won’t accrue any cash value. If you are looking for a whole or other permanent life insurance policy, FEGLI won’t give you what you need.
FEGLI plans don’t offer additional riders to cover living benefits or any other benefits riders can bring to the average life insurance policy.
You can’t take it with you when you leave. If you are no longer a federal government employee, your FEGLI policy will be dissolved. This also means that you will lose any money that you paid into it.
If you are looking for affordable term life insurance, FEGLI Basic Plan may provide you a reasonable option as it is subsidized by your employer.
However, the other plans offered are not affordable. You may want to look at individual policies offered by other providers.
If you are not ready to buy FEGLI life insurance and you’d rather start looking for additional life insurance coverage, enter your ZIP code below. We can help you find local life insurance providers so you find the right plan for you.