How much life insurance a federal family actually needs

What your family already gets

Every generic life insurance calculator assumes your income stops dead. For a federal employee it does not, and four things arrive before any private policy pays out.

• FEGLI Basic. Your salary rounded up to the next $1,000, plus $2,000. On $95,000 that is $98,000, and more if you are under 45, because of the free Extra Benefit.
• The Basic Employee Death Benefit. If you die in service with at least 18 months of civilian service, your spouse receives 50% of your final salary, or your high-3 if higher, plus $43,800.53 for deaths on or after December 1, 2025. It is indexed each year.
• A FERS survivor annuity. With at least 10 years of service, your spouse receives 50% of the annuity you had accrued, monthly, for life.
• Social Security survivor benefits. Payable to your children until 18, or 19 in secondary school, and to a spouse caring for a child under 16. The amount comes off your earnings record, so take it from your Social Security statement rather than guessing.

The method that works

DIME is the standard approach, and it is simple enough to do on paper. Add up four things:

• Debt that would not die with you: car loans, credit cards, private student loans, plus final expenses.
• Income your household would lose, times the number of years they would need it.
• Mortgage balance outstanding.
• Education you intend to fund.

The federal adjustment is in the income line. Do not insure your whole salary. Insure the part that survivor benefits do not replace.

A worked example

A GS-13 earning $95,000, 15 years of service, a high-3 of $90,000, a spouse and two children, a $300,000 mortgage and $50,000 in savings.

Two honest caveats. Social Security survivor benefits for two children are not in that figure, and for most families they are worth tens of thousands a year while the children are young, so the real gap is smaller. And insuring ten full years of income is a choice, not a law; many families plan for five, or for the years until the youngest finishes school.

Run your own numbers rather than borrowing these.

Four ways feds get this wrong

• Insuring the whole salary. The survivor annuity and Social Security replace a real slice of it. Insure the gap, not the gross.
• Forgetting the mortgage falls. The cover you need at 40 with a new mortgage is not what you need at 55 with eight years left. Coverage should step down, and so should what you pay.
• Never filing the forms. FEGLI pays by SF 2823, the TSP by form TSP-3, and each overrides your will. An out-of-date form sends the money to the wrong person, and it happens often.
• Ignoring the stay-at-home spouse. Replacing childcare, school runs and household work costs real money. That is a cover need even with no income to replace.

Filling the gap

Once you have a number, the question is what to buy. FEGLI Option B is age-banded and repriced every five years; private level term locks one rate for the whole term. We compared both, with the arithmetic, in FEGLI vs. private term life.

If you are a veteran, VGLI belongs in the comparison too, especially if a private carrier would rate you up.

Common questions