Should I Keep Fegli After Retirement?

When It Makes Sense

• Good fit: You have a spouse or dependent children who would benefit from inexpensive group life coverage, especially if you have limited health issues that could make private policies expensive.
• Good fit: Your retirement income is stable and you can comfortably afford the FEGLI premiums, making the added protection a worthwhile safety net.

When You Should Avoid It

• Warning sign: You already possess a comprehensive private life insurance policy that provides equal or greater coverage at a comparable cost.
• Warning sign: Your retirement budget is tight and the monthly FEGLI premiums would strain your cash flow or force cuts to essential expenses.

Pros and Cons

Pros

• Group rates are often lower than individual policies, especially for senior retirees who might face higher underwriting costs.
• Coverage can be easily extended to a surviving spouse or former spouse (if elected), offering flexibility that many private policies lack.

Cons

• Premiums increase each year after retirement, potentially outpacing inflation and eroding retirement savings.
• Coverage limits are fixed by the program; you may end up paying for more coverage than you truly need.

Decision Checklist

• Do you have existing life insurance that meets your family’s financial protection needs?
• Can you afford the ongoing FEGLI premiums without jeopardizing essential retirement expenses?
• Will the FEGLI beneficiary designations align with your estate planning goals?

Alternatives to Consider

Instead of keeping FEGLI, you might explore a term life policy from a private insurer that matches your coverage amount but offers a fixed premium for a set term. Another option is to purchase a shorter‑term policy now and transition to a permanent policy later, balancing cost and coverage duration. If your spouse is also a federal retiree, review coordination of benefits under the Federal Employees’ Group Life Insurance program to avoid duplicate coverage.

Final Recommendation

Keeping FEGLI after retirement can be a smart move if you need affordable, flexible coverage for a spouse or dependents and can comfortably manage the recurring premiums. However, if you already have sufficient private coverage or your budget is constrained, it may be wiser to let the FEGLI policy lapse and consider alternative life insurance solutions. As with any retirement financial decision, consult a qualified financial planner or benefits counselor to ensure the choice aligns with your overall retirement strategy.