What Happens To My FEGLI Benefits After I Retire?

By Bobby Maggi

Federal employee life insurance is just one perk out of many. Some of these benefits you might want to carry into FERS retirement, but is that possible? Find out what happens to your FEGLI benefits after you retire in this in-depth guide before reaching out to your trusted FEGLI consultants at Federal Educators.

Going Over Your Options With FEGLI

Federal Employees Group Life Insurance (FEGLI) is a great incentive for countless FERS employees, granting their loved ones protection and some financial stability should they pass away. FEGLI can act as a great safety net throughout your employment, but it can lead to some complications the moment you retire.

Your options for FEGLI federal employee life insurance coverage after you retire are:

Keeping your FEGLI throughout retirement
Reducing your FEGLI coverage before retirement
Cancel your FEGLI coverage when you retire

Continue reading to explore the pros and cons of each path and to find out how we offer guidance on FEGLI benefits at Federal Educators.

Keep Your FEGLI Coverage After Retirement (But Pay Higher Premiums)

You might think that hanging onto your FEGLI federal employee benefits after you retire is the obvious choice. Who wouldn’t want to rely on that type of security even longer if they could? The main downside is the cost.

FEGLI premiums will still need to be paid, and the expenses may be even higher than you think. On top of that, you’ll need to have had FEGLI for at least 5 years to qualify for extended coverage into fed retirement.

What does this mean for you? First, you’ll have to see if you qualify for FEGLI after federal retirement. Then, you’ll have to determine if the higher premiums are worth the benefits.

Opt For FEGLI Coverage Reductions Now, Receive Benefits In Retirement Later

By reducing your FEGLI coverage now, you can receive benefits later. You can think of it like a savings account. You take out a small portion of your pay today so you can use it later when you need it.

There are two scopes of FEGLI reductions:

A 75% reduction will require you to decrease your coverage by 2% each month until it reaches 25%. You continue paying premiums this way until you retire, and then you enjoy 25% free FEGLI coverage.

A 50% reduction will require you to decrease your coverage by 1% each month until it reaches 50%. The same rules follow, except this time, 50% of your FEGLI coverage will be free.

Cancel Your FEGLI Coverage When You Retire

The final option is to completely cancel your FEGLI coverage after you retire. Whether you do this is entirely up to your needs and priorities. Discontinuing your FEGLI coverage may sound like a good idea if you can no longer afford to pay the premiums, but if it’s in the budget, it may be worth hanging onto for peace of mind. If you need help deciding, a Federal Educators benefits advisor can help put your personal situation into better perspective for you.

Let Federal Educators Help You Make the Right Decision. Get a FEGLI Analysis Today!

Need help navigating your FEGLI coverage? Get your free FEGLI analysis today before scheduling a consultation with Federal educators! We’ll help you decide what to do with your FEGLI coverage after you retire.

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