Life Insurance Premiums Are Changing

If you’re enrolled in the Federal Employees Group Life Insurance program, watch your paycheck at the end of October. According to this Federal Register notice, the Office of Personnel Management has completed a study of FEGLI and is making changes to Employee Basic, Option A, Option B, Option C and Post-Retirement Basic Insurance.

Rates are going up for Basic, and in some cases for the optional forms of insurance too. In other cases, they’re staying the same or being reduced. 

These changes reflect updated mortality and claims rates in each FEGLI category. The legislative structure of FEGLI assumes that premium rates are set for each age band independently of the other bands so that each band is financially self-supporting. The government pays one third of the premium cost for Basic and the employee pays two thirds. The employee or retiree pays the full cost of optional insurance.

For Basic insurance, most employees are currently charged a biweekly rate of $0.15 per $1,000 of coverage. Some retirees have a monthly withholding rate of $0.325 per $1,000, depending on their age and post-retirement insurance election. The rates for Basic will increase to $0.16 per $1,000 biweekly and $0.3467 per $1,000 monthly.

Basic coverage has a value of your annual salary rate rounded up to the next $1,000, plus $2,000. For example, a GS 10, Step 6 employee in the Pittsburgh locality area who has a basic pay rate of $70,694 would have Basic coverage of $73,000 at age 45 or older. Employees 35 and under are covered by an additional Basic insurance provision called the “extra benefit” that doubles the amount of Basic insurance at no extra cost. Beginning on your 36th birthday, the extra benefit decreases by 10% each year until age 45, when it ends. 

Biweekly premiums for Option A-Standard, which insures your life for $10,000, will be the following after Oct. 1:

• Under age 35: $0.20 (no change)
• Age 35 - 39: $0.20 (down from $0.30)
• Age 40 - 44: $0.30 (down from $0.40)
• Age 45 - 49: $0.60 (down from $0.70)
• Age 50 - 54: $1.00 (down from $1.10)
• Age 55 - 59: $1.80 (down from $2.00)
• Age 60 and above: $6.00 (no change)

The monthly rates for Option A-Standard will be:

• Under age 35: $0.43 (no change)
• Age 35 - 39: $0.43 (down from $0.65)
• Age 40 - 44: $0.65 (down from $0.87)
• Age 45 - 49: $1.30 (down from $1.52)
• Age 50 - 54: $2.17 (down from $2.38)
• Age 55 - 59: $3.90 (down from $4.33)
• Age 60 and above: $13.00 (no change)

Option B-Additional, which insures your life for one to five multiples of your annual rate of pay rounded up to the next $1,000, will have the following premiums (per $1,000 of coverage) after Oct. 1:

• Under age 35: $0.02 (no change)
• Age 35 - 39: $0.02 (down from $0.03)
• Age 40 - 44: $0.03 (down from $0.04)
• Age 45 - 49: $0.06 (down from $0.07)
• Age 50 - 54: $0.10 (down from $0.11)
• Age 55 - 59: $0.18 (down from $0.20)
• Age 60 - 64: $0.40 (down from $0.44)
• Age 65 - 69: $0.48 (down from $0.54
• Age 70 - 74: $0.86 (down from $0.96)
• Age 75 - 79: $1.80 (no change)
• Age 80 and above: $2.88 (up from $2.64)

The monthly rates for Option B-Additional will be:

• Under age 35: $0.043 (no change)
• Age 35 - 39: $0.043 (down from $0.065)
• Age 40 - 44: $0.065 (down from $0.087)
• Age 45 - 49: $0.130 (down from $0.152)
• Age 50 - 54: $0.217 (down from $0.238)
• Age 55 - 59: $0.390 (down from $0.433)
• Age 60 - 64: $0.867 (down from $0.953)
• Age 65 - 69: $1.040 (down from $1.170)
• Age 70 - 74: $1.863 (down from $2.080)
• Age 75 - 79: $3.900 (no change)
• Age 80 and above: $6.240 (up from $5.72)

The biweekly premiums for Option C-Family, which insures your life for one to five multiples of $5,000 for a spouse and $2,500 for each eligible dependent child, will be the following (per multiple of coverage) after Oct. 1:

• Under age 35: $0.20 (down from $0.22)
• Age 35 - 39: $0.24 (down from $0.27)
• Age 40 - 44: $0.37 (down from $0.41)
• Age 45 - 49: $0.53 (down from $0.59)
• Age 50 - 54: $0.83 (down from $0.92)
• Age 55 - 59: $1.33 (down from $1.48)
• Age 60 - 64: $2.43 (down from $2.70)
• Age 65 - 69: $2.83 (down from $3.14)
• Age 70 - 74: $3.83 (no change)
• Age 75 - 79: $5.76 (up from $5.26)
• Age 80 and above: $7.80 (up from $7.20)

The monthly rates for Option C-Family will be:

• Under age 35: $0.43 (down from $0.48)
• Age 35 - 39: $0.52 (down from $0.59)
• Age 40 - 44: $0.80 (down from $0.89)
• Age 45 - 49: $1.15 (down from $1.28)
• Age 50 - 54: $1.80 (down from $1.99)
• Age 55 - 59: $2.88 (down from $3.21)
• Age 60 - 64: $5.27 (down from $5.85)
• Age 65 - 69: $6.13 (down from $6.80)
• Age 70 - 74: $8.30 (no change)
• Age 75 - 79: $12.48 (up from $11.40)
• Age 80 and above: $16.90 (up from $15.60)

So far, there’s no word of an open enrollment period, which often accompanies rate changes for FEGLI. Open seasons are held only whenOPM schedules them. But you don’t have to wait for an open season to reduce or cancel coverage. You can do that at any time.