FEGLI and Divorce: Life Insurance Rules for Federal Employees

Why FEGLI Doesn't Change Automatically After Divorce

A common and expensive misconception: many federal employees assume their divorce decree automatically removes their former spouse from their FEGLI life insurance. It does not. Without an affirmative action — either a new beneficiary designation or a qualifying court order — the former spouse may remain the default payee under FEGLI's statutory order of precedence.

FEGLI benefits are paid strictly according to a statutory hierarchy set by federal law, not by the divorce decree. If you haven't filed a new Standard Form 2823 (Designation of Beneficiary) after your divorce, OPM will pay based on the order of precedence: first to a designated beneficiary (if one exists), then to a surviving spouse, then to children, then to parents, then to a named executor, and finally to next of kin.

If your most recent SF 2823 names your former spouse, they receive the payout — even if your divorce decree says otherwise and even if you've been divorced for decades.

How Court Orders Interact With FEGLI

A divorce decree can require a federal employee to maintain FEGLI coverage for a former spouse — typically to secure alimony, child support, or property settlement obligations. For this court order to be enforceable through the FEGLI program, a certified copy must be on file with the correct office:

• Active employees: Submit the certified court order to your agency's Human Resources office
• Retirees: Submit to OPM's Court Ordered Benefits Branch

The timing is critical. The court order must be received before the insured employee dies. If the employee dies and no qualifying court order is on file, OPM pays according to the SF 2823 designation or the statutory order of precedence — regardless of what the divorce decree required.

If OPM receives conflicting court orders within the applicable timeframes, benefits are paid based on whichever court order was issued first.

Option C (Family Coverage) and Former Spouses

FEGLI Option C provides life insurance coverage for a spouse and dependent children. Each unit of Option C provides $5,000 in spouse coverage and $2,500 in coverage for each eligible dependent child.

Once a divorce is finalized, a former spouse is no longer an eligible family member under Option C. This means Option C benefits are legally unpayable on a former spouse, even if the retiree continues to pay the premium due to administrative lag. If the divorce decree requires the employee to maintain life insurance for the former spouse, it must be through Basic FEGLI, Option A, or Option B — not Option C.

Irrevocable Assignments

If a federal employee has previously executed an irrevocable assignment of their FEGLI coverage using Form RI 76-10, they've permanently transferred ownership of the policy. An irrevocable assignment cannot be undone by a divorce decree, a subsequent court order, or a new SF 2823.

This situation is rare but consequential. If the employee assigned ownership to their spouse before the divorce, the assignment survives the divorce. The assignee (former spouse) retains ownership and control over the policy, including the right to name beneficiaries. Any court order directing a change in beneficiaries after an irrevocable assignment is legally invalid.

Premium Costs in Retirement

If a court order requires maintaining FEGLI into retirement, understanding the age-banded premium structure is important for long-term financial planning:

Basic Insurance has a level premium of $0.3250 per $1,000 of coverage while employed. In retirement, the premium depends on the reduction election chosen. Under the standard 75% reduction, Basic coverage premiums stop at age 65, but the face value gradually decreases to 25% of the original amount.

Option A ($10,000 coverage) premiums increase sharply with age: $2.17 per month at ages 50-54, $3.90 at ages 55-59, and $13.00 at ages 60-64. Coverage becomes free after age 65 under the standard reduction option.

Option B (multiples of salary) premiums also escalate: $0.238 per $1,000 at ages 50-54, $0.433 at ages 55-59, and $0.953 at ages 60-64. Under full reduction, Option B coverage reaches zero after 50 months of 2% monthly reductions starting at age 65.

An employee whose divorce decree requires maintaining a specific coverage level should calculate the cumulative premium cost through their expected retirement period. The numbers add up — particularly for Option B at higher multiples.

What to Do Immediately After Divorce

1. File a new SF 2823 with your agency HR office or with OPM if you're retired. Name your intended beneficiary — whether that's a current spouse, children, or a trust.
2. If the court order requires maintaining FEGLI for the former spouse, submit a certified copy of the order to the correct office and confirm receipt in writing.
3. Review your Option C election. If your former spouse was the only covered family member under Option C, consider whether to maintain, reduce, or cancel the coverage.
4. Check for irrevocable assignments. If you executed an RI 76-10 assignment during the marriage, consult with your HR office about its status — a divorce decree cannot override it.

For the complete FEGLI analysis within the broader federal divorce process — including pension COAPs, TSP RBCOs, and health insurance deadlines — the Divorce & Federal Retirement guide covers every benefit track.

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