Here's the FEGLI question almost no federal employee asks themselves until it's too late: at what age does this coverage stop being a benefit and start being a leak?

FEGLI — the Federal Employees' Group Life Insurance program — is the default life insurance most carriers enroll in on day one of their postal career and then never think about again. It does its job for decades. But the way FEGLI is priced means that somewhere between your late 50s and your mid 60s, the math quietly flips. The premiums climb faster than the death benefit, and what was a cheap safety net becomes one of the most expensive line items in your budget.

This isn't a 'cancel everything' article. It's a framework for deciding what to keep, what to drop, and what — if anything — to replace it with.

Step 1: Understand what you actually have

FEGLI comes in four pieces. Most carriers have at least three of them and have no idea what each one costs them today.

Basic

Equal to your annual salary rounded up to the next $1,000, plus $2,000. Premium is shared with the agency while you're working. If you keep it into retirement, you choose 75%, 50%, or No Reduction. The 75% reduction option is essentially free at retirement; the others cost real money.

Option A — Standard

A flat $10,000. Cheap when you're young, expensive per dollar of coverage when you're old. After 65 the cost goes to zero but the benefit also drops by 2% per month for 50 months until you're left with $2,000.

Option B — Additional

This is the big one. Coverage equals 1, 2, 3, 4, or 5 times your salary. Premiums are age-banded and brutal after 50. A 60-year-old carrier with 5x Option B pays vastly more than they did at 50, and by 70 the cost can be more than $1,000 a month for the same coverage.

Option C — Family

Coverage on your spouse and eligible children — multiples of $5,000 for spouse, $2,500 per child. Same age-banded premium structure as Option B.

Step 2: Ask the right question

The question is NOT 'do I still want life insurance?' Almost everyone says yes. The question is: 'what is the cheapest way for me to have the amount of life insurance I actually need, for as long as I actually need it?'

That changes the conversation entirely. Now you're comparing FEGLI to alternatives instead of asking whether to keep it on autopilot.

Step 3: Figure out how much coverage you actually need

Life insurance is income replacement and debt cleanup. Once you're retired and your kids are grown, the calculation shrinks. Walk through this:

  • How much income would my spouse lose if I died tomorrow? (Survivor annuity already covers some of this.)
  • What debts would I leave behind? (Mortgage, vehicles, anything else.)
  • Do I want to leave a legacy — kids, grandkids, church, anything?
  • What's my final-expense number? (Funeral averages $9k–$15k.)

Add those up. Subtract what's already covered by your CSRS or FERS survivor annuity, TSP, savings, and Social Security survivor benefits. What's left is the gap your life insurance needs to fill.

If the gap is zero, you might not need life insurance at all. If the gap is $50,000, you don't need $500,000 worth of FEGLI.

Step 4: Compare FEGLI to alternatives

Term life insurance

If you're under 65 and reasonably healthy, level-premium term insurance from the private market often beats FEGLI Option B by a wide margin. A 60-year-old healthy non-smoker can lock in 10-year level term for a price that doesn't change as you age — while FEGLI rates jump every five years.

The catch: term has an end date. If you outlive it, you have nothing. So term is best when you have a defined window of need — pay off the mortgage, get the youngest through college, get to age 75 — not lifetime needs.

Permanent life insurance (whole life or guaranteed universal)

If you have a lifetime need — final expenses, leaving money to grandkids, equalizing inheritances — a small permanent policy can lock in a level premium that you'll pay until death. The premium is higher up front than term, but it never increases, and the policy never expires. For final-expense needs of $25k–$50k, this is often cheaper over a 20-year horizon than keeping a $50,000 FEGLI Option B slice.

Self-insurance

If you have enough savings, TSP, and pension income that your spouse would be fine without any life insurance, the smartest move may be to drop FEGLI entirely and redirect the premium savings into the TSP or a high-yield savings account.

Step 5: A practical decision framework

Basic

Keep it. At retirement, elect the 75% reduction option — it's effectively free and leaves you with a modest, permanent death benefit equal to 25% of your final salary plus $2,000.

Option A

Easy: keep it through 65, then let it ride. After 65 the premium is zero and the benefit phases down to $2,000.

Option B

This is where the real decisions happen. If you have a multi-times-salary Option B and you're entering your 60s, get a real quote on level-premium term for the same coverage amount. Run the numbers side by side. In most healthy cases, term wins for the next 10–15 years, and by then your need has probably shrunk anyway.

Option C

Often the easiest to cut. If your spouse has their own life insurance or you have enough cushion to handle final expenses, you may not need it. The age-banded premiums make it expensive late in life.

Step 6: Revisit every 5 years

Life insurance need isn't static. Mortgage pays down, kids get launched, spouse retires, TSP grows. Re-run the gap analysis every five years or after any major life event. The right answer at 55 is rarely the right answer at 70.

Bottom line

FEGLI is good coverage when you're young and cheap. It gets expensive in a hurry, and most retirees end up paying for more coverage than they actually need. The fix isn't 'drop everything' — it's a deliberate look at what you've got, what you need, and what the alternatives cost.

Do the homework. Run the calculator. Get a real term quote. Then make the call with full information instead of autopilot.