Understanding FEGLI Coverage
FEGLI is one of the largest group life insurance programs in the world, covering approximately 4 million federal employees and retirees. It's administered by the Office of Personnel Management (OPM) and underwritten by MetLife.
FEGLI Coverage Types:
Example: A GS-13 Step 5 employee earning $107,000 with Basic + Option B at 5x would have approximately $109,000 (Basic) + $535,000 (Option B) = $644,000 in total death benefit.
FEGLI's Built-In Living Benefit
FEGLI Basic includes a Living Benefit feature — but it's extremely limited:
- • Only available for terminal illness (life expectancy ≤ 9 months)
- • Maximum payout: the lesser of $5,000 or your full Basic benefit
- • Only applies to Basic coverage — not Options A, B, or C
- • One-time election only
For most federal employees, $5,000 doesn't come close to covering the financial impact of a serious illness. That's where a Living Benefit Loan fills the gap — accessing up to 50% of your total FEGLI death benefit.
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Living Benefit Loan: A Better Option
FEGLI + Living Benefit Loan:
- ✓ Works with Basic AND Optional A/B/C coverage
- ✓ Access up to 50% of total death benefit (not limited to $5,000)
- ✓ No credit check, no income verification
- ✓ Funding in as few as 3 business days
- ✓ No monthly payments — repaid from death benefit
- ✓ Keep your FEGLI coverage in force
- ✓ Beneficiaries receive remaining death benefit
Using the example above: a federal employee with $644,000 in FEGLI coverage could potentially access up to $322,000 through a Living Benefit Loan — versus $5,000 from FEGLI's built-in Living Benefit.
FEGLI in Retirement
Federal retirees can continue FEGLI if they were enrolled at retirement and have at least 5 years of civilian service. However, there are important changes:
Basic Coverage Reduction
Basic reduces by 2% per month starting at age 65, down to 25% of the pre-retirement amount — unless you elected "No Reduction" (which costs more in premiums before retirement).
Option B Reduction
Option B reduces by 2% per month starting at age 65, eventually reaching zero. This makes timing critical — if you need to access Option B value, do it before age 65.
Option A
Reduces to $2,500 at age 65. Free after retirement if you've had it for 5+ years.
Important for retirees: If you're approaching 65 or already seeing reductions, a Living Benefit Loan should be considered sooner rather than later while your death benefit is at its maximum.
Frequently Asked Questions
Can you borrow against FEGLI?
Not through a traditional loan (no cash value). But a Living Benefit Loan borrows against the death benefit. Basic and Optional coverage both qualify with $75,000+ total.
How much FEGLI coverage do I have?
Basic = salary rounded to nearest $1,000 + $2,000. Option B = 1-5x salary. Check your SF-2817 or Employee Express.
Does FEGLI have a Living Benefit?
Yes, but limited to $5,000 max and only for terminal illness (≤ 9 months). A Living Benefit Loan offers up to 50% of total death benefit.
What about FEGLI in retirement?
Coverage continues if enrolled at retirement with 5+ years service. Benefits reduce starting at 65 unless you elected No Reduction.
Where can I check my FEGLI elections?
Employee Express (employeeexpress.gov), your SF-2817 form, or your HR/personnel office.
Related Guides
Further Reading
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