FEGLI at retirement: why it can get expensive, and what to compare before you retire

By the OnPAR Federal Retirement Education editorial team · Last updated November 9, 2026

Related: FEGLI in retirement: the 5-year rule and your choices · FERS retirement checklist

Short answer: FEGLI Basic costs the same per $1,000 at every age, but Option B (and Options A and C) are priced in 5-year age bands that climb steeply [1]. If you keep Option B with No Reduction after 65, OPM's rate rises from $1.040 per $1,000 a month at 65–69 to $6.240 at 80 and over [1]. If you choose Full Reduction, Option B becomes free at 65 (or retirement, if later) but shrinks 2% a month and is gone after 50 months [3]. That's why many feds compare FEGLI with private term life while they're still working and younger. This page is education, not advice.

1. What FEGLI costs as you age (OPM rates)

OPM publishes FEGLI premiums per $1,000 of coverage. These rates took effect the first pay period on or after October 1, 2021, and OPM notes rates may change [1]. Option B for annuitants, monthly:

The example column is simple arithmetic: OPM's rate times 100 (for $100,000). Your real cost depends on your pay, multiples and choices. Use OPM's FEGLI calculator.

Option A (a flat $10,000) is $13.00 a month at 60–64 and free at 65+ for annuitants [1]. Option C (family) per multiple is $5.27 a month at 60–64; with No Reduction after 65 it's $6.13 (65–69), $8.30 (70–74), $12.48 (75–79) and $16.90 (80+) [1].

2. Basic insurance in retirement: three choices

• 75% Reduction: starting at 65 or retirement (whichever is later), Basic shrinks 2% a month until it reaches 25% of the amount at retirement [2]. Free after 65 [1].
• 50% Reduction: shrinks 1% a month to 50% [2]. Costs $1.0967 per $1,000 a month before 65 and $0.75 after, for life [1].
• No Reduction: no shrinking [2]. Costs $2.5967 per $1,000 a month before 65 and $2.25 after, for life [1].

Basic's Accidental Death & Dismemberment coverage stops at retirement [2].

3. You can only keep what you've had for 5 years

To carry FEGLI into retirement you generally must have been insured for the 5 years of service right before retirement (or all opportunities if less) [4]. Once you retire you can reduce or cancel FEGLI, but you can't add or increase it [5]. So decisions about how much coverage you'll want later need to happen while you're still working. See FEGLI in retirement for details.

4. FEGLI vs. private term life: what to compare

FEGLI is group term insurance: Option B's price depends only on your age band, not your health [1]. Private term life is usually priced on your age and health when you buy it, and many policies lock a level premium for a set term (say 10, 20 or 30 years). Things to compare side by side:

• Monthly cost now and at 65, 70 and 80 (use the OPM table above for FEGLI).
• How long you actually need coverage (mortgage, a spouse's income, debts).
• Whether the private premium is level for the term, and what happens when the term ends.
• Your health today. Buying younger and healthier generally means more choices.

We don't sell insurance on this page and don't name carriers. Get quotes from licensed agents and check your state insurance department before you buy anything.

5. "No medical exam" life insurance: the real tradeoffs

Many life policies today can be issued without a physical exam or blood/urine tests. The NAIC describes two approaches: simplified issue, which skips the exam "in exchange for generally higher premiums," and accelerated underwriting, which uses outside data like prescription history and motor vehicle records instead of an exam [6]. The Society of Actuaries notes simplified issue usually comes with fewer rate classes and lower maximum face amounts than fully underwritten policies [8]. The NAIC Buyer's Guide adds that a policy needing less health information "will cost more and provide less coverage," and that false answers can get a policy reduced or canceled [7].

Bottom line: no-exam can be faster and easier, but it can cost more and cap how much you can buy. Never drop FEGLI until a replacement policy is actually in force, because you can't get FEGLI back once you've canceled it after retiring [5].

6. Before you retire: a short checklist

1. Pull your current FEGLI coverage from your LES or agency HR (SF 2817 elections).
2. Check the 5-year rule for each option you want to keep [4].
3. Price your Option B at 65, 70 and 80 with OPM's rates [1].
4. Decide Basic: 75%, 50% or No Reduction [2].
5. If you compare private coverage, get quotes while you're working, and keep FEGLI until any new policy is in force.

Official sources

1. OPM: FEGLI Program Information (premiums for employees and annuitants)
2. OPM: Basic Insurance in Retirement
3. OPM: Continuation of Coverage after Retirement
4. OPM FAQ: The five-year/all-opportunity rule
5. OPM: FEGLI Handbook (PDF)
6. NAIC: Accelerated Underwriting
7. NAIC: Life Insurance Buyer's Guide (PDF)
8. Society of Actuaries: Simplified Issue Underwriting (2020 research report, PDF)

Rates checked against OPM on November 4, 2026. Education only, not legal, tax or financial advice. Not affiliated with OPM, USPS or any government agency.