FEGLI Option B Cost in Retirement: What One Multiple Really Costs
The short answer: FEGLI Option B cost is charged per $1,000 of coverage in five-year age bands, and it keeps climbing after you retire. A retiree who keeps one multiple with No Reduction pays $1.17 per $1,000 each month at age 65, $2.08 at 70, $3.90 at 75 and $5.72 at 80 — for life.
What are the key takeaways?
- Retirees pay the same Option B rates as employees until age 65, then the No Reduction rates continue for life (OPM).
- The monthly rate per $1,000 goes from $0.953 at 60–64 to $5.720 at 80 and over — a six-fold increase (OPM rate table).
- On a $93,000 multiple, premiums from 65 to 85 total about $71,800, and the coverage amount never grows.
- Full Reduction costs nothing after 65, but the coverage drops 2% a month for 50 months and then ends (OPM).
What is the FEGLI Option B cost at each age band?
OPM sets one Option B rate per $1,000 of coverage for each five-year age band. Your band changes the month after your birthday, and the new premium shows up in the following annuity payment. These are the bands that matter in retirement:
- Age 60–64: $0.953 per $1,000 per month
- Age 65–69: $1.170
- Age 70–74: $2.080
- Age 75–79: $3.900
- Age 80 and over: $5.720
One multiple equals your final annual basic pay rounded up to the next $1,000, locked in at retirement. The rate rises; the face amount does not.
What does one multiple actually cost from 65 to 85?
Take a retiree whose final basic pay was $92,400. Rounded up, one Option B multiple is $93,000 of coverage, or 93 units of $1,000. Under No Reduction, the monthly premium works out like this:
- 65–69: 93 × $1.170 = $108.81 a month, or $6,528.60 over five years
- 70–74: 93 × $2.080 = $193.44, or $11,606.40
- 75–79: 93 × $3.900 = $362.70, or $21,762.00
- 80–84: 93 × $5.720 = $531.96, or $31,917.60
Those four bands add up to $71,814.60 between 65 and 85 for a death benefit that stays at $93,000. Keep paying at the age-80 rate and the running total passes the face amount at roughly age 88. That is the arithmetic behind the FEGLI Option B cost question, and it is the part a premium table alone does not show.
Does the cost start at 65, or earlier?
Earlier. This is the distinction people get wrong most often. Full Reduction is free after 65 — not before it. A retiree at 60 pays the 60–64 rate either way, which is $88.63 a month on a $93,000 multiple, or $5,317.80 over five years. The two elections only separate the month after you turn 65.
From that point, Full Reduction ends the premium and shrinks the coverage by 2% of the pre-retirement amount each month for 50 months, after which the multiple is gone. No Reduction keeps the full amount and the bill. You can switch from No Reduction to Full Reduction at any time; the reverse is not allowed. Our guide to the Option B full reduction and no reduction election walks through that choice, and the same reducing schedule logic applies to FEGLI Option A premiums.
Frequently asked questions about FEGLI Option B cost
Do I pay Option B premiums monthly or biweekly in retirement?
Monthly, withheld from your annuity. Employees pay the biweekly rate; OPM publishes both.
Can I keep some multiples and drop others?
Yes. OPM allows mixed elections — for example, two multiples with Full Reduction and one with No Reduction.
Do the rates change?
They have before. OPM publishes a current table and a rate history, so check your own band rather than an old statement.
Does the premium ever stop under No Reduction?
Only if you cancel the coverage or switch those multiples to Full Reduction. Otherwise it continues for life.
Run your own numbers before you sign the election form. Fed Pilot’s free federal retirement workshops cover FEGLI, FEHB, your pension and your TSP together, so the insurance decision sits beside the rest of the picture. Register for a free workshop.
