FEGLI Option B Cost by Age: Premium Tables and What They Mean for Retirement

The Premium Escalation Nobody Plans For

FEGLI Option B premiums don't creep up — they jump in five-year intervals, and every jump hits harder than the last. A federal employee carrying five multiples of Option B at age 54 who crosses into the 55–59 band sees their monthly premium nearly double. Cross into the 60–64 band and it more than doubles again. By age 75, you're paying 10 times what you paid at 55.

Most federal employees don't run these projections until they're sitting across from HR filling out SF 2818. By then, the election is weeks from becoming permanent.

The Full 2026 Option B Rate Table

Option B coverage equals your annual basic pay, rounded up to the nearest $1,000, multiplied by the number of multiples you carry (1 through 5). Unlike Basic insurance, Option B does not add $2,000. Here are the current OPM rates per $1,000 of Option B coverage per month:

What This Costs on Real Coverage Amounts

Most pre-retirees in the GS-13 to GS-15 range have annual basic pay amounts between $100,000 and $180,000. Here's what five multiples (the maximum) look like at representative coverage amounts:

On $100,000 of Option B coverage (1 multiple at $100K of rounded annual basic pay):

On $500,000 of Option B coverage (5 multiples at $100K of rounded annual basic pay):

At the 80+ band, one multiple on $100,000 of rounded annual basic pay consumes $624/month — $7,488/year — from a FERS annuity that might be $36,000–$50,000 before taxes. That's 15–20% of gross retirement income going to a single life insurance premium.

Full Reduction vs. No Reduction: The Fork at Retirement

When you fill out SF 2818, you choose one of two paths for each Option B multiple:

Full Reduction (default): Starting the second month after you turn 65 (or retire, if later), each multiple reduces by 2% per month for 50 months until coverage reaches zero. Once the reduction starts, premiums stop. You pay age-banded rates until 65, then nothing — but the coverage disappears entirely.

No Reduction: Your coverage stays at 100% for life. But those age-banded premiums in the table above never stop. At 70, at 80, at 90 — you keep paying, and the rate keeps climbing every five years.

You can split multiples between the two elections. If you carry five multiples, you could designate two on No Reduction and three on Full Reduction. But you can never move from Full Reduction back to No Reduction — the downward ratchet is permanent.

How to Think About the Decision

The Option B cost question is really two questions:

How long do you need the coverage? If your mortgage will be paid off by 70, your spouse will be collecting their own Social Security, and your children are financially independent, the Full Reduction election may make sense — you get coverage through your highest-risk years and stop paying before the premiums become punishing.

What's the premium drag on your annuity? Calculate the monthly premium as a percentage of your projected annuity at each age band. If Option B at No Reduction would consume more than 10–15% of your net annuity by age 75, the math is working against you — and it only gets worse from there.

A federal employee with a $120,000 salary carrying three multiples of Option B ($360,000 coverage) faces $1,404/month at ages 75–79 on No Reduction. That's $16,848/year. Against a FERS annuity of $42,000–$48,000, it's more than a third of gross income.

What Most People Miss

The rate table looks alarming at 80+, but many retirees won't reach that band with active coverage. The question is what happens between 65 and 75 — the decade when premiums are substantial but coverage is still meaningful. Run the numbers for that specific window, not the theoretical worst case.

The FEGLI Decision Guide includes the full premium projection framework across every age band, so you can model exactly how much of your retirement income goes to Option B under each scenario.

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