An overview of the cost and rules surrounding the family optional life insurance, known as “Option C,” offered by the Federal Employee Group Life Insurance (FEGLI) Program
Most feds are familiar with FEGLI Basic as all eligible federal workers are enrolled automatically when first hired. The Basic insurance is also the only component of FEGLI where the government will chip in on the cost by paying 1/3 of the premium, and also the only coverage from which living benefits can be withdrawn, if needed. The other three additional options are known as Standard Optional Insurance (option A), Additional Optional Insurance (option B), and Family Optional Insurance (Option C). While any part of FEGLI can be dropped at any point during a federal career, or in retirement, enrolling or re-enrolling in the life insurance program is more complicated. This article will review how much FEGLI option C costs, and what additional benefits it provides.
Only for Family
Most importantly, this optional family life insurance covers immediate family members only. This includes the federal employee’s spouse and any dependent children under the age of 22 who live in the same household in a “parent-child relationship.” The covered dependent can be a natural, adopted, step, or foster child, but children do lose their eligibility if they get married. If a child is 22 or older, they can still be covered if debilitated by a condition that makes them unable to support themselves independently. To sum up Option C, it should only be considered by federal employees who have a spouse and/or children who live with them. It should also be understood what benefits are to be received in the tragic event that a covered family member passes away, and how much the optional insurance will cost.
Option C Benefits
For feds who elect FEGLI Option C coverage for their spouse, there are 5 multiples to select from, each adding $5000 of life insurance benefits. The amount elected is what the federal employee or retiree will receive as a one-time payment if their spouse passes before them:
| Multiple | Amount of Death Benefit (Spouse) |
| x1 | $5,000 |
| x2 | $10,000 |
| x3 | $15,000 |
| x4 | $20,000 |
| x5 | $25,000 |
So long as they are eligible dependents, any number of children can be covered. Like the spouse’s insurance, 1 to 5 multiples can be chosen, except the multiples are in $2,500 increments. One rule to be aware of is that whatever multiple is chosen for a spouse, the same multiple has to be chosen for any children that are covered.
| Multiple | Amount of Death Benefit (Children) |
| x1 | $2,500 |
| x2 | $5,000 |
| x3 | $7,500 |
| x4 | $10,000 |
| x5 | $12,500 |
Premium Costs
Like all FEGLI premiums, the age of the federal employee or retiree reflects the price. The younger someone is, the cheaper FEGLI costs for them. The premiums are paid biweekly for active employees and monthly for federal retirees. However, if age 65 or over upon retirement, one can elect to stop paying for FEGLI Option C and some coverage will remain in place. The benefit amount will decrease, though, by 2% every month until hitting zero. If there is still coverage in place after 50 months, the life insurance benefit is altogether dropped regardless.
| Age Range | Option C Premium, biweekly | Option C Premium, monthly |
| 34 or younger | $0.20 | $0.43 |
| 35-39 | $0.24 | $0.52 |
| 40-44 | $0.41 | $0.89 |
| 45-49 | $0.59 | $1.28 |
| 50-54 | $0.92 | $1.99 |
| 55-59 | $1.48 | $3.21 |
| 60-64 | $2.70 | $5.85 |
| 65-69 | $3.14 | $6.80 |
| 70-74 | $3.83 | $8.30 |
| 75-79 | $5.26 | $11.40 |
| 80 or older | $7.20 | $15.60 |
More Resources:
FEDLIFE Podcast: The Cost of FEGLI
From the FEDZONE, by Ed Zurndorfer: Insurance Needs and Options for Federal Employees
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Until Next Time,
The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
