Changes to the Federal Employees Group Life Insurance Program Are Needed

Life insurance and other death benefit programs available to Federal employees and retirees were compared with similar programs provided to both public and private non-Federal personnel. Life insurance programs were found to be superior in the non-Federal sector. In general, however, survivors benefits under the civil service retirement system are superior to benefits in the non-Federal sector from employer retirement programs and social security combined. Considering life insurance and retirement programs together, total death benefits are generally comparable except for young employees and retirees over age 65 where social security puts the non-Federal sector ahead. Federal employees also pay more for their benefits than their non-Federal counterparts. Changes to the Federal Employees Group Life Insurance (FEGLI) program are needed if it is to remain a viable part of the Federal death benefits package. The premiums, two-thirds of which are paid by the employees, are much higher than those of non-Federal programs, and the benefits structure is inequitable in many respects. FEGLI must be made more attractive to younger employees and more equitable for all personnel. Changes to the funding concept and different allocation of costs between employees and the Government could reduce employee premiums. Limited savings could result if the law recognized that FEGLI is, in effect, a self-insured program.