FEGLI Life Insurance Review for 2021
FEGLI is the Federal Employee Group Life Insurance program offered to all federal employees. This term life insurance does not calculate rates based on health but instead uses a base rate for its Basic Plan, and age to calculate the rates of its other plans. In this FEGLI life insurance review, we compare FEGLI term insurance rates to those of other companies and find that Plan A, B, and C become less affordable over time.
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UPDATED: Mar 31, 2021
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- FEGLI is a federal life insurance program offered to all federal employees
- FEGLI approves all employees for term life insurance regardless of age or health
- FEGLI offers four plans, the Basic Plan, Plan A, Plan B, and Plan C with varying coverage and rates
There are many benefits that come with being a federal employee, and one of those is the Federal Employee Group Life Insurance program or FEGLI.
In this FEGLI life insurance review, we will go over who is eligible for FEGLI life insurance, how much it costs, and how it compares to other term life insurance options out there.
Keep reading to learn more, or enter your ZIP code above to check out other life insurance providers in your area.
FEGLI Life Insurance Review
FEGLI was enacted in 1954 and as of today is the largest group life insurance program in the world. FEGLI, as the name implies is a federal program providing term life insurance to all federal employees.
Unlike other life insurance providers, FEGLI is funded by the US government, so employee premiums are taken directly from their paychecks.
FEGLI offers four different term life insurance plans, each with different rates and coverage amounts.
One of the unique things that FEGLI does is rather than have a lengthy process to approve or deny employees coverage, they approve all employees.
Regardless of health or age, employees are eligible for FEGLI insurance.
In addition, they do not calculate rates based on gender, which is a common practice in the life insurance industry, as, according to the CDC, males have a lower life expectancy their rates tend to be higher.
These factors make it easier to get life insurance through FEGLI than some third-party providers if you are older or have poor health.
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What type of life insurance does FEGLI provide?
The FEGLI offers term life insurance policies to all federal employees. While term life insurance is the only product that FEGLI provides, there are four different plans available to choose from.
The first plan is the FEGLI Basic Plan. This plan is auto-enrolled for all employees unless they choose to opt-out. It is subsidized by the government, so employees only pay ⅔ of the premium cost.
It provides coverage totaling employee salaries to the closest thousand plus an additional $2,000.
The FEGLI basic life insurance does not use age to calculate the premium rates, instead, it has a flat rate paid by any employee who retains this plan.
The second plan is Plan A. Plan A offers an increased coverage amount by $10,000 and uses age to calculate premium rates.
Plan A is not subsidized by the government, so any employee who wants additional coverage will need to pay the full premiums.
Plan A also allows you to continue coverage into retirement if you choose.
Plan B again allows you to increase your coverage, allowing you to get up to five times your salary in total coverage.
Like Plan A, the premiums for this plan are not subsidized and are calculated based on coverage and age. Plan B can also be carried into retirement.
Plan C is the family insurance option. This plan allows you to purchase coverage for your spouse and dependant children.
Coverage for your spouse can be a maximum of $25,000 and for children, the maximum coverage is $12,500.
These premiums are again calculated using your age and coverage total and are not subsidized by the government.
Is FEGLI life insurance affordable?
The Basic Plan is affordable, but the other plans are not.
This is because of many factors. The primary one being that the Basic Plan is partially paid for by the US government.
Not paying for a ⅓ of the premiums saves employees money and makes the Basic Plan a very affordable way to get term life insurance.
The secondary reason the other plans are so expensive is the pricing structure.
While FEGLI doesn’t use traditional approval methods, because they provide the plan for all employees, their age-based pricing structure does have several jumps in it that happen around age 60 to 65.
These jumps of over a dollar in some cases can make maintaining premiums difficult.
To compare the price of premiums between FEGLI and other life insurance providers, we pulled up a quote for a 20-year policy with $100,000 in coverage for a 30-year-old woman with Haven Life and WAEPA.
Here are the results using similar data for FEGLI.
|Company||Average Monthly Rates|
|FEGLI Plan A||$17.99|
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It should be noted that the plan for FEGLI was a total of $115,00 in coverage, however, the small increase in coverage does not seem to equate with the increased premiums.
Looking at the data objectively, FEGLI is more expensive than traditional term life insurance policies.
How does FEGLI life insurance compare to traditional life insurance?
There are many benefits to keeping a FEGLI life insurance policy. Everyone is accepted by this policy.
If you are in poor health, it can be very difficult for you to get life insurance that is in any way affordable. FEGLI basic life insurance can offer an alternative that will see you through to retirement age.
FEGLI also doesn’t calculate premiums using gender or health concerns, which in some cases can save money.
FEGLI life insurance deducts directly from your paycheck, which makes keeping up on premiums easy as long as you can afford them.
However, despite all of these benefits, the cost of FEGLI is where it starts to lose popularity.
The high premiums associated with FEGLI policies do not stand up to individual policies available elsewhere.
If you are interested in a term life insurance policy that provides more coverage than the Basic Plan from FEGLI, the best thing to do is to submit quotes with other companies to compare the rates.
FEGLI has some options that can follow you into retirement, however, there are many individual term life insurance for elders over 80 available on the market.
As always with life insurance, it’s important to shop around and compare rates and coverage to ensure you are getting the most out of your monthly premiums.
Do you want to keep searching for the right life insurance provider? Enter your ZIP code below and we will help you find a policy that fits your budget and your needs.