The Federal Government established the Federal Employees' Group Life Insurance (FEGLI) Program on August 29, 1954. It is the largest group life insurance program in the world, covering over 4 million Federal employees and retirees, as well as many of their family members. As well intentioned as it is, FEGLI has its shortcomings, especially as it pertains to the premium structure. If you are in poor health or have used tobacco during the past 12 months, then we strongly recommend FEGLI. If not, be prepared to pay up to 70% less than FEGLI for the exact same coverage!
Most federal employees are eligible for FEGLI coverage. FEGLI provides group term life insurance. As such, it does not build up any cash value or paid-up value. It consists of Basic life insurance coverage and three options. In most cases, if you are a new Federal employee, you are automatically covered by Basic life insurance and your payroll office deducts premiums from your paycheck unless you waive the coverage. In addition to the Basic, there are three forms of Optional insurance you can elect. You must have Basic insurance in order to elect any of the options. Unlike Basic, enrollment in Optional insurance is not automatic -- you must take action to elect the options. You are required to pay the full cost of Optional insurance, and the cost depends on your age.