Federal Employees' Group Life Insurance, or FEGLI, can be one of the benefits employees review as retirement approaches. But keeping Basic coverage into retirement does not necessarily mean keeping the same amount of insurance indefinitely—or paying the same premiums.
For eligible employees, the Basic retirement election offers three choices: 75% Reduction, 50% Reduction, and No Reduction. The names describe what happens to the insurance amount, not how much of a pension is withheld. Understanding that distinction is the starting point for reading the election form.
First, Confirm Whether Basic Coverage Can Continue
Retirement alone does not establish eligibility to continue FEGLI. OPM's Guide for Retiring Employees generally requires retirement on an immediate civilian annuity, enrollment at retirement, and continuous coverage for the five years of service immediately before retirement—or all periods of eligibility if less than five years.
Other conditions also apply, including not having canceled or converted the coverage. The SF 2818 instructions address additional situations, including Living Benefits and assigned coverage. This article explains standard Basic reduction choices; it does not determine eligibility or resolve postponed-annuity, compensation, reemployment, or other special circumstances. Ask agency HR to review your coverage history before relying on a continuation assumption.
What Amount Is Being Reduced?
Under the standard rule in SF 2818, the Basic Insurance Amount is annual basic pay rounded up to the next $1,000, plus $2,000, with a minimum of $10,000. The amount carried into retirement generally uses final annual basic pay—not the FERS high-3 average used in a pension calculation. Agency records and applicable FEGLI rules establish the actual amount.
Special situations can change this description. For example, a full Living Benefit leaves no Basic insurance to continue; a partial Living Benefit requires No Reduction for the remaining Basic coverage under SF 2818. The age-based Extra Benefit for people under 45 is separate from the standard Basic reduction schedule. Accidental Death and Dismemberment coverage stops when employee coverage ends; it does not continue as an annuitant benefit.
The Three Basic Reduction Choices
75% Reduction: Eventually 25% Remains
Under the standard 75% Reduction election, Basic coverage decreases each month by a fixed amount equal to 2% of the Basic amount carried into retirement. Reductions stop when 25% of the original amount remains. OPM describes this schedule in its Basic Insurance in Retirement guidance.
The monthly reduction is based on the original amount, not the smaller balance remaining each month. And 75% Reduction does not mean that 75% stays in place: it means the total reduction eventually reaches 75%. This choice has no additional premium beyond the regular Basic premium while that regular premium applies.
50% Reduction: Eventually 50% Remains
Under the standard 50% Reduction election, Basic coverage decreases each month by a fixed amount equal to 1% of the Basic amount carried into retirement. Reductions stop when 50% of the original amount remains. This election carries an additional premium starting at retirement.
No Reduction: The Basic Amount Does Not Follow the Reduction Schedule
Under No Reduction, the Basic Insurance Amount is not reduced by the standard post-retirement reduction schedule. An additional premium starts at retirement and continues under the applicable rules. No Reduction describes the insurance amount; it does not mean no premiums, a cash-value account, or protection against inflation. Maintaining the same dollar amount does not maintain the same purchasing power.
When Do Reductions Start?
For 75% Reduction and 50% Reduction, SF 2818 specifies the first day of the second month after reaching age 65, or the first day of the second month after retirement, whichever is later. Someone retiring before 65 therefore does not begin these reductions simply because employment has ended. Someone retiring after 65 uses the later retirement-based timing.
Coverage-reduction timing and premium-stop timing are not identical. Keeping them separate helps explain why a premium deduction may stop before the first scheduled reduction in the insurance amount.
The Regular Premium and the Additional Premium Are Different
SF 2818 states that the regular Basic premium stops on the first day of the month after the retiree reaches age 65. A person who retires after turning 65 does not pay that regular Basic premium in retirement.
That does not make every Basic election premium-free. For 50% Reduction and No Reduction, the additional premium begins at retirement. It continues for life unless coverage is canceled or the election is changed to 75% Reduction under the applicable rules. If retirement occurs before 65, the additional premium is paid on top of the regular Basic premium until the regular premium stops.
This article does not quote premium rates or calculate an individual cost. Rates may change. Use OPM's current information and ask HR or OPM to distinguish regular Basic premiums, additional Basic premiums, and any Optional insurance deductions in a written explanation.
A Later Change Is Not an Unlimited Do-Over
SF 2818 provides 30 days from the date you receive your first regular monthly annuity payment to change your reduction election. This is tied to the regular payment—not simply the retirement date. Confirm the deadline and submission procedure with OPM rather than assuming an interim payment or an informal conversation resolves the election.
After that window, a change from 50% Reduction or No Reduction is limited to 75% Reduction; you cannot simply move to 50% Reduction or No Reduction later. OPM computes the coverage as though 75% Reduction had originally been elected, and previously paid premiums are not refunded. A switch can therefore affect the coverage amount at that time, not just future deductions.
Canceling Basic coverage also cancels Optional coverage, and canceled annuitant coverage cannot simply be restored. If insurance has been assigned, the assignee's authority affects later changes or cancellation. These are consequences to verify before submitting a request—not recommendations to reduce, retain, replace, or cancel coverage.
Legal Note: This discussion is not legal, tax, or investment advice and does not interpret assignment documents or determine another person's authority over coverage. Consult your own attorney, tax advisor, or financial professional about legal or tax questions, and ask OPM about the applicable program procedure.
Keep Basic, Optional Insurance, and the Pension Election Separate
The percentages in this article apply to Basic insurance. Options A, B, and C have their own reduction and premium rules. Do not apply the Basic 75%/50%/No Reduction choices to every FEGLI deduction or assume that all insurance continues at no cost after 65.
FEGLI is also separate from the FERS spouse survivor-annuity election. One concerns life insurance; the other concerns a potential monthly pension benefit for an eligible survivor. This article does not treat either as an automatic substitute for the other.
Questions to Bring to HR Before Completing SF 2818
Ask which Basic amount you are eligible to carry, which coverage-history records support continuation, when each reduction and premium change would occur, and what deductions would continue under each election. Also ask whether a Living Benefit, assignment, or other special circumstance changes the standard rules for your records.
The retirement continuation form is SF 2818. Use the current form and instructions, retain official confirmations, and do not rely on a blank election: for someone eligible to continue Basic, the form identifies 75% Reduction as the default. A default is not an individualized recommendation.
Keep these records with your Retirement Road Map. There is no need to send Benefit Reviews your personnel file, beneficiary details, or insurance election. The purpose is to understand the program choices before making a decision with the appropriate official records and independently chosen professional guidance.
Frequently Asked Questions
Does FEGLI Basic 75% Reduction mean I keep 75% of my insurance?
No. Under the standard 75% Reduction election, Basic coverage decreases by a fixed amount each month equal to 2% of the Basic amount carried into retirement, until 25% of that original amount remains. The label describes the total reduction, not the percentage retained.
When do FEGLI Basic retirement reductions begin?
For 75% Reduction and 50% Reduction, reductions begin on the first day of the second month after age 65 or on the first day of the second month after retirement, whichever is later. They do not necessarily begin on the retirement date or the 65th birthday.
Is FEGLI Basic automatically free after age 65?
Not under every election. The regular Basic premium stops on the first day of the month after age 65; someone retiring after 65 does not pay that regular premium in retirement. The additional premium for 50% Reduction or No Reduction starts at retirement and continues for life unless coverage is canceled or the election is changed to 75% Reduction under the applicable rules.
Can I switch to No Reduction whenever I want after retirement?
No. SF 2818 provides 30 days from receipt of the first regular monthly annuity payment to change the reduction election. After that window, a change from 50% Reduction or No Reduction is limited to 75% Reduction, rather than an increase to a more protective election. Assignment can affect who may request a change. Confirm the applicable procedure with OPM before acting.
Official Sources and Scope
Sources substantively reviewed November 11, 2026: OPM's Basic Insurance in Retirement, Guide for Retiring Employees: FEGLI in Retirement, and SF 2818 and instructions. This article addresses standard Basic reduction choices, not a comprehensive guide to Optional insurance, assignments, Living Benefits, or special retirement situations. Current OPM instructions and official records govern individual cases.
Educational Disclaimer: Benefit Reviews is a private educational website. It is not affiliated with, endorsed by, or acting on behalf of OPM or any government agency. This article is general information, not legal, tax, benefits, or investment advice. It does not recommend an insurance election, determine eligibility, quote a premium, or guarantee coverage or payment. Consult your agency's HR or benefits office, OPM, and your own attorney, tax advisor, benefits administrator, or appropriately qualified, independent, licensed professional regarding your circumstances. Benefit Reviews does not offer securities, investment management, or investment advisory services and is not responsible for decisions or actions based on this information.
