Federal Employees’ Group Life Insurance Program
The group policy coverage available to most federal employees, including part-time employees, through the Federal Employees’ Group Life Insurance (FEGLI) program is administered by Metropolitan Life Insurance Company under a contract with the Office of Personnel Management. Under FEGLI’s Basic coverage, employees are provided with two kinds of coverage: group term life insurance without a medical examination (if you do not waive coverage when first eligible or if you elect it during an open enrollment period); and accidental death and dismemberment insurance that provides double indemnity protection. Eligible employees are automatically covered for Basic insurance upon hiring unless they specifically state in writing by the end of their first pay period that they do not want it.
In addition to the Basic coverage, there are optional coverages available to employees who wish to augment their own life insurance program or have coverage on their family members. Although the premiums for optional coverages are paid for exclusively by employees, they are provided at group rates.
Newly hired employees have 60 days from their entry date to sign up for any optional life insurance. If they do not make an election, they are considered to have waived optional insurance. No proof of insurability is required for any optional insurance elected during the first 60 days. Proof of insurability may be required for insurance changes after that time. After the initial election period coverage may be increased only under certain circumstances as described in Adding Coverage, below.
An FEGLI benefits calculator is at www.opm.gov/retirement-services/calculators/fegli-calculator. Active employees unsure of how much coverage they have should contact their personnel offices. They also may check their most recent Standard Form 50, Notification of Personnel Action, block 27. Retirees should call (888) 767-6738 or email firstname.lastname@example.org.
In general, if you drop your FEGLI coverage as a retiree, you may never again be covered (see Chapter 4, Section 4 for special rules that apply to rehired annuitants). However, under certain circumstances, if you drop your FEGLI coverage while an employee, you may pick it up at a later date, provided you are found to be medically insurable, if an open enrollment period is held, or because of a qualifying life event. See Adding Coverage, below.
Premium Changes and Open Season in 2016—Due to claims patterns, some premium rates were changed effective in January 2016. For active employees, these took effect as of the first full pay period of the year, and for retirees, as of January 1. Basic insurance rates for retirees electing the 50 percent reduction or the no reduction option increased; there was no change in Basic rates for active employees. Rates for both active employees and retirees in Options A, B and C changed, in many cases holding steady or decreasing at younger ages while increasing at older ages.
Due to claims patterns, some premium rates were changed effective in January 2016. For active employees, these took effect as of the first full pay period of the year, and for retirees, as of January 1. Basic insurance rates for retirees electing the 50 percent reduction or the no reduction option increased; there was no change in Basic rates for active employees. Rates for both active employees and retirees in Options A, B and C changed, in many cases holding steady or decreasing at younger ages while increasing at older ages.
The Office of Personnel Management meanwhile set an open season for the month of September 2016 for active employees (but not retirees) to elect coverage or increase existing coverage, with changes elected at that time effective as of the first pay period of October 2017. Due to the five-year coverage requirement for carrying FEGLI coverage into retirement (see Life Insurance in Retirement, below), any changes elected in that open season cannot be carried into retirement for those retiring before October 2022.
Special Coverage Rules—Employees who are assigned in their civilian capacity in support of a contingency operation—as well as Defense Department employees designated as “emergency essential”—who had previously waived FEGLI Basic coverage may elect it within 60 days of the notification of that assignment or designation, under 5 U.S.C. 8714a(b) and 5 CFR 870.503. During that same period, such persons also may elect Option A or elect or increase Option B insurance up to the maximum; those choices do not apply to Option C coverage. No open season, qualifying life event or medical information is necessary. To make those changes, affected employees should file a new life insurance election in either paper or electronic form and mark “Election Due to NDAA” in the Remarks section. See Benefits Administration Letter 12-201 at www.opm.gov/retirement-services/publications-forms/benefits-administration-letters. Those policies do not apply to a call to active military duty; for special rules for employees who enter active military duty, see Employment Rights of Those on Military Duty in Chapter 8, Section 8.
Basic Life Insurance
The basic insurance amount equals an employee’s annual pay rounded to the next higher thousand plus $2,000, with a minimum of $10,000 insurance, at all times during active employment. In situations where the combination of salary and premium pay reaches the employee’s annual salary cap (see Chapter 1, Section 2), the basic insurance amount is based on the capped amount (that is, the actual amount of earnings received by the employee). The determination is made on an annual basis, not by pay period.
In situations of concurrent employment, the amount of Basic and Option B insurance is based on the combined salaries. If an employee accepts a temporary position while in non-pay status from a covered position, the amount is based on the higher of the salaries.
The cost of the Basic insurance is shared by the employee and the government. The employee’s share is two-thirds of the cost and is withheld from the worker’s salary. The employee pays 15¢ biweekly or 32.5¢ monthly per $1,000 of Basic coverage.
Agencies pay one-third of the total cost of Basic for their employees, except the U.S. Postal Service, which pays the entire cost for its employees.
The group policy provides two kinds of Basic insurance during employment: life insurance without a medical examination (if you don’t waive coverage when first eligible or if you elect it during an open enrollment period); and accidental death and dismemberment (AD&D) insurance providing double indemnity for accidental death, and payment for accidental loss of eyesight or one or more limbs.
AD&D pays the full amount of Basic coverage for death or the loss of two or more bodily members (defined as a hand, a foot or the loss of sight in one eye) and half of the Basic coverage for the loss of one member. It is not payable under certain circumstances (see FEGLI Benefit Payments, below), does not include the extra benefit for those under age 45 as explained below, and is not available to retirees.
The amount of Basic life insurance available to each eligible employee under age 45 is increased at no additional cost to the employee. The increase is graduated according to the employee’s age. For employees age 35 or under, their Basic insurance coverage is multiplied by two. Beginning at age 36, the multiplication factor for the amount of Basic insurance declines by 0.1 each year, until it reaches 1.0 (that is, no additional coverage) for employees age 45 and over.
The amount of Basic life insurance provided under FEGLI begins to decrease once an individual retires or reaches age 65, whichever is later. The rate of decrease is 2 percent per month, until 25 percent of the amount you had at time of retirement is reached. However, FEGLI-covered employees are given an opportunity at the time of retirement to elect either a lower rate of reduction or no coverage reduction after attaining age 65 in exchange for their agreement to make additional premium payments. See Retirees and Compensationers: Coverage and Premiums, below in this section.
Option A—(Standard Optional Insurance)
Federal employees covered under the Basic life insurance program have the option of purchasing an additional $10,000 worth of FEGLI life insurance. The employee pays the full cost of this “standard optional insurance” coverage. The amount of the premium depends on the employee’s age and is withheld from the worker’s salary. For covered employees (not retirees), selection of the Option A life insurance coverage also results in an equal amount of accidental death and dismemberment protection, as described above under Basic Life Insurance. Retirees who reach age 65 no longer have to pay premiums, but the $10,000 optional insurance starts to decline at this point at the rate of 2 percent for each full calendar month until it reaches $2,500. The cost is listed in the tables entitled “Biweekly Premiums for Employees” and “Monthly Premiums for Annuitants.”
Option B—(Additional Optional Insurance)
Federal employees who are insured for the Basic coverage may elect “additional optional insurance” in an amount equal to one, two, three, four, or five times their actual rate of annual basic pay (rounded to the next $1,000). The employee pays the full cost of the additional optional insurance. The premium depends on the employee’s age and is withheld from salary. Accidental death and dismemberment coverage is not included in this coverage. Retirees at age 65 no longer have to pay premiums for additional optional insurance, but the amount of their coverage starts to decrease at this point at the rate of 2 percent each month for 50 months, at which point coverage ceases. However, FEGLI-covered employees are given an opportunity at the time of retirement to elect to keep up to the full amount of the additional optional insurance in force and continue to pay premiums. Such an election may be cancelled at a later date. The cost is listed in the tables entitled “Biweekly Premiums for Employees” and “Monthly Premiums for Annuitants.”
Option C—(Family Optional Insurance)
Federal employees insured for the Basic insurance coverage may elect family optional insurance to cover eligible family members (the employee’s spouse and unmarried dependent children under age 22). An eligible spouse includes a “legally married” same-sex spouse, meaning one married in a jurisdiction (including in a foreign country) that recognizes such marriages, regardless of current place of residence; children of legally married same-sex couples are treated the same as children of married opposite-sex couples. Eligibility does not apply to domestic partnerships, civil unions or other arrangements not formally recognized as a marriage; eligibility for a common law spouse depends on the laws of the state of residence.
The coverage amount is equal to up to five multiples of $5,000 for a spouse and up to five multiples of $2,500 for each eligible child. The employee pays the full cost of the family optional insurance. The premium depends on the employee’s age and is withheld from the worker’s salary. Accidental death and dismemberment coverage is not included in this coverage. Retirees at age 65 no longer have to pay premiums for family optional insurance, but their coverage amount starts to decrease at this point at the rate of 2 percent each month for 50 months, at which point coverage ceases. However, FEGLI-covered employees are given an opportunity at the time of retirement to elect to keep up to the full amount of the family optional insurance in force and continue to pay premiums. Such an election may be cancelled at a later date. The cost is listed in the tables entitled “Biweekly Premiums for Employees” and “Monthly Premiums for Annuitants.” A prior policy of allowing a second chance for retirees to choose no reduction for some multiples and full reduction for others under Options B and C shortly before turning age 65 generally was ended effective October 1, 2010 by rules at 5 CFR 870.705(d). However, an exception was allowed for those who retired after April 24, 1999 but who had not reached age 65 by October 1, 2010.
Active employees have three opportunities to add coverage: during an open season, after providing medical information, or by experiencing a qualifying life event (retirees may not add to their coverage; see Life Insurance in Retirement, below). Open seasons are rare and typically are linked to changes in the program’s provisions or premium rates. The allowable elections are determined in each instance.
As long as at least one year has passed since the effective date of your last waiver of life insurance coverage, you may provide satisfactory medical information at your own expense using the Request for Insurance (SF 2822). The SF 2822 is available only at www.opm.gov/forms. You and your agency must complete part of the form. Then you take the form to your physician or other medical professional. He or she will examine you, complete the rest of the form, and send the form to the Office of Federal Employees’ Group Life Insurance (OFEGLI). If OFEGLI approves your request, Basic, Option A and Option B elections will be effective immediately, so long as certain conditions are met, such as being in pay status. You cannot elect Option C or increase Option C multiples by providing medical information.
Within 60 days of experiencing a qualifying life event, you may elect Basic insurance and any optional insurance, including up to the maximum number of multiples available under Option B and Option C. A qualifying life event means marriage (including a same-sex marriage in a jurisdiction that recognizes such marriages), divorce (including a divorce of a legally married same-sex spouse), the death of your spouse, or the birth or adoption of a child. You must complete a Life Insurance Election Form (SF 2817), available at www.opm.gov/forms, and submit it to your human resources office.
Rules at 5 CFR 870 allow for making a qualifying life event election up to six months after the event if the employing agency determines that the employee was unable to make a timely election for reasons beyond his or her control.
The amount of your Basic and Option B insurance may change if your salary rate changes. If your salary rate increases or decreases sufficiently to bring you above the amount to which your salary has been rounded for coverage purposes, the new amount of insurance will be effective on the date the salary rate change occurs. For premium withholding purposes, a salary rate change is deemed to occur: on the stated effective date of the change or the date such change is approved, whichever is later or on the effective date of the change when a retroactive adjustment is actually the correction of an error, unless otherwise stipulated in a law providing for the change. Note: If you elect a living benefit (see below), salary changes will have no effect on the amount of Basic.
Filing a FEGLI Claim
To receive payment of the death benefits, a FEGLI participant’s beneficiary or other survivor must submit a claim on the form provided—FE-6 for the death of participants, FE-6 DEP for claims for Option C coverage on family members—and furnish written proof of the covered individual’s death and of the claimant’s right to payment. For active employees, the individual’s employing office can supply a claim form upon request and will submit the notification to the Office of Federal Employees’ Group Life Insurance (OFEGLI). For retirees, contact the Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045, phone (888) 767-6738 or (724) 794-2005, TDD (800) 878-5707, www.opm.gov/forms.
To receive payment of dismemberment benefits under AD&D coverage, file form FE-7, available from the same sources. An accident that results in loss of life, limb, or eyesight must be reported within 20 days after the incident occurs. Proof of the loss resulting from the accident must be submitted on the form provided not later than 90 days after the date of the loss. However, if it is not possible to furnish notice or proof in the time specified, the requirements will be met if such notice or proof is furnished as soon as reasonably possible. The Office of Federal Employees’ Group Life Insurance has the right to have a physician examine individuals during the period that they are claiming benefits for loss of limb or eyesight, as well as the right to require an autopsy in the event of a claim for accidental death benefits (unless the autopsy is forbidden by law).
All claims are settled by the Office of Federal Employees’ Group Life Insurance, P.O. Box 6080, Scranton, PA 18505-6080, phone (800) 633-4542 (from overseas, (212) 578-2975), fax (570) 558-8659. For overnight deliveries only, the address is OFEGLI, 10 Ed Preate Dr., Moosic, PA 18507.
FEGLI Beneficiaries: Order of Precedence
When you die, the Office of Federal Employees’ Group Life Insurance (OFEGLI) will pay life insurance benefits in a particular order, set by law. If you assigned ownership of your life insurance (see below), OFEGLI will pay benefits: first, to the beneficiary(ies) designated by your assignee(s), if any; and second, if there is no such beneficiary, to your assignee(s).
If you did not assign ownership and there is a valid court order on file, OFEGLI will pay benefits in accordance with that court order.
If you did not assign ownership and there is no valid court order on file, OFEGLI will pay benefits:
- first, to the beneficiary(ies) you designated;
- second, if there is no such beneficiary, to a surviving spouse, including a “legally married” same-sex spouse as described in Option C—(Family Optional Insurance), above;
- third, if none of the above, to your child or children, with the share of any deceased child distributed among descendants of that child (a court will usually have to appoint a guardian to receive payment for a minor child);
- fourth, if none of the above, to your parents in equal shares or the entire amount to your surviving parent;
- fifth, if none of the above, to the executor or administrator of your estate; and
- sixth, if none of the above, to your other next of kin as determined under the laws of the state where you lived.
You do not need to name a beneficiary if you are satisfied to have the death benefits of your insurance paid in that order of precedence. If you wish to make a designation, complete a Designation of Beneficiary (SF 2823), available from your personnel office or at www.opm.gov/forms, and submit it to your human resources office. Witnesses to the designation may not be named as beneficiaries.
In general, you do not need the consent of anyone to change your beneficiary. However, law authorizes an exception to the standard order of precedence under the FEGLI program if a court has issued a decree of divorce, annulment, or legal separation that calls for the benefits to be paid to someone else. The court decree must be received in the employing agency before the insured’s death. In the case of retirees, the same document must be received by OPM. The law also allows a court to direct the insured individual to make an irrevocable assignment of life insurance ownership to the person(s) named in the court order. However, the court documents do not themselves serve as an official assignment. The insured must still complete an Assignment of Insurance Form (see Assignment of Benefits).
A designation of beneficiary is automatically canceled 31 days after you cease to be insured. If your insurance is continued or reinstated when you retire or while you are receiving federal workers’ compensation benefits, your designation of beneficiary is placed on file in the OPM and remains in effect. To be valid, your designation of beneficiary must be received by the employing office before your death.
If you name more than one beneficiary, be sure to specify the exact share you wish each person to receive. If designated beneficiaries die before you do, their rights and interests in your insurance benefits end automatically.
If any person otherwise entitled to payment as explained above fails to make a benefits claim within one year after your death, or if payment to such person within that period is prohibited by federal statute or regulation, payment may be made in the order of precedence shown above as if such person had died before you.
FEGLI Benefit Payments
FEGLI benefits generally are payable if death or accidental injury occurs while an employee or retiree is insured and proper notice and proof are presented (typically, in accordance with the claims filing procedures outlined above). The two general types of benefit payments made under FEGLI are:
Death Benefits—The amount of your life insurance is payable in the event of your death while insured, no matter how caused.
Payment Under the Accidental Death and Dismemberment Insurance—Benefits under this type of insurance are payable if, while insured, you receive bodily injuries solely through violent, external, and accidental means (other than those noted under Exceptions) and if as a direct result of the bodily injuries, independently of all other causes, and within 90 days afterwards you lose your life, limb, or eyesight.
The full amount of your accidental death and dismemberment insurance (equal to your Basic insurance amount, plus Option A coverage if you have it) is payable in the case of loss of life under such circumstances. One-half the amount of such insurance is payable to you for the loss of one limb or sight of one eye, or the full amount for two or more such losses.
For all such losses resulting from any one accident, no more than the full amount of accidental death and dismemberment insurance is payable. If a loss of a hand or foot or the sight of one eye occurs in a different accident after a previous loss of such member, the benefit payable for the subsequent loss is one-half the amount of accidental death and dismemberment insurance. The payment of benefits for any loss will not affect the amount of benefits payable for losses resulting from any subsequent accident.
Payment Procedures—Beneficiaries receiving $5,000 or more may choose between receiving a single payment or having the insurance provider establish an account of the amount of the benefit. Beneficiaries with accounts may make withdrawals of $250 or more, up to the full amount in the account, at any time. The account pays interest but is operated by the insurance provider and is not federally insured. Beneficiaries receiving less than $5,000 receive a single payment for the entire amount.
Exceptions—Payment for accidental death or dismemberment will not be made if your death or loss is caused or contributed to by:
- physical or mental illness;
- the diagnosis or treatment of a physical or mental illness;
- ptomaine or bacterial infection, unless the loss is caused by an accidentally sustained external wound;
- a war (declared or undeclared), any act of war, or any aggression by armed forces, against the United States, in which nuclear weapons are being used;
- a war (declared or undeclared), any act of war, armed aggression, or insurrection, in which the employee is, at the time bodily injuries are sustained, in actual combat;
- suicide or attempted suicide;
- intentional infliction of self-injury;
- self-administration of illegal or illegally obtained drugs.
- driving a vehicle while intoxicated, as defined by the laws of the jurisdiction in which you were operating the vehicle.
Assignment of Benefits
Any FEGLI-covered employee, retiree, or compensationer may irrevocably assign his/her life insurance benefits to another person or persons, including an individual, a corporation or a trust. Assignment means that you transfer ownership and control of your Basic, Option A, or Option B insurance (if you have these coverages) to the assignee(s). Thereafter, life insurance premiums will continue to be withheld from your salary, annuity, or compensation payment. You will not be able to cancel your life insurance coverage or cancel the assignment. Such an assignment voids all prior designations and prohibits you from making any future designations of beneficiaries. The assignee becomes the beneficiary (unless the assignee designates someone else). Family optional insurance may not be assigned. Assignments are generally made to comply with a court order upon divorce, for inheritance tax purposes, to obtain cash before death from a viatical settlement firm (for terminally ill individuals), or to satisfy a debt. If you assign your life insurance, you may not elect living benefits (see below). If you are an employee and would like to request an assignment, use form RI 76-10, Assignment, Federal Employees’ Group Life Insurance, available from the sources in Filing a FEGLI Claim, above (online, select Retirement and Insurance Forms).
Any FEGLI-covered employee, retiree, or compensationer who has been diagnosed as terminally ill with a life expectancy of nine months or less may elect a living benefit. Living benefits are life insurance benefits paid to individuals while they are still living, rather than paid to a beneficiary or survivor upon the individual’s death. Only Basic insurance is available for living benefits. Employees may elect either a full living benefit—all of their Basic benefit—or a partial living benefit in multiples of $1,000. Retirees and compensationers may elect only a full living benefit. With a full benefit, withholding of premiums for Basic insurance ceases; with a partial benefit, they are recalculated.
Living benefits can be elected only once and an election cannot be retracted. If a full living benefit is elected, no Basic life insurance will remain. If a partial living benefit is taken (an option only available to employees), the amount of the remaining Basic insurance will be frozen. It will not change, even if there is a subsequent change in salary. However, you may assign any remaining insurance.
If you believe you qualify for and wish to elect a living benefit, use form FE-8, Claim for Living Benefits, available by calling OFEGLI at (800) 633-4542 (the form is not available through agencies or online). That office will send you the form and a calculation sheet, so you can determine the amount of Basic insurance available to you. This will take into account the age multiplication factor for employees under age 45 and the post-65 reduction for annuitants age 65 and over. The benefits received will be reduced by an amount representing interest lost to the life insurance fund because of the early payment of benefits.
If OFEGLI approves your request for a living benefit, you will receive a check, along with an explanation of benefits (FE-8C). You can change your mind about electing a living benefit up until you cash or deposit the check. The effective date of the living benefit election is the date you cash or deposit the check. If you decide not to elect the living benefit, you should write “Void” on the check and return it to OFEGLI. If the living benefit payment is not cashed before your death, your representative must return the check to OFEGLI. Your beneficiaries may then file a claim for death benefits.
If OFEGLI does not approve your request for a living benefit, there are no appeal rights. However, you may furnish additional medical evidence to support your claim or may reapply if future circumstance warrant.
Discontinuing FEGLI Coverage
Unless you’ve assigned it to someone else, you may discontinue your Basic or Optional insurance coverage at any time by providing a written waiver of insurance coverage to your employing office (or to the OPM in the case of a retiree) by filing a Life Insurance Election form (SF 2817) available from the sources listed in Filing a FEGLI Claim, above. However, there are situations in which your insurance can be discontinued without your consent.
- Separation from service other than for retirement.
- After 12 months of non-pay status.
- Any other employment change that results in your ceasing to be a FEGLI-eligible employee, such as a move to a position excluded from eligibility.
- Termination of your annuity.
- At the end of the pay period in which it is determined that your pay, after all other deductions, is insufficient to cover the required withholding for your insurance. However, you may arrange to continue your insurance coverage by making payments directly to your agency or retirement system.
Note: Optional insurance stops when Basic insurance stops.
Converting to an Individual Policy
If your coverage stops except by waiver or cancellation, your coverage automatically continues for an additional 31 days after the termination date. No premiums or government contributions are required during the 31-day extension. This extension does not include accidental death and dismemberment insurance. You have the right to convert your FEGLI coverage under Basic and Options A and B to an individual life insurance policy without medical evidence of insurability. Generally, only the insured individual has the right to convert coverage when insurance terminates, with exceptions for assignments and designations of powers of attorney. In addition, a family member may convert Option C coverage. Any insurance policy purchased under the conversion privilege is a private business transaction between you and the insurance company. You will be responsible for the full amount of the premiums. There will be no government contribution. You will make your payments directly to the insurance company. Premiums will be retroactive to the end of the 31-day extension. The amount of those premiums will depend on four factors:
- the amount of insurance you apply for;
- the type of policy you apply for;
- your age; and
- the class of risk you fall into on the day following the termination of group coverage.
Premiums may well be higher than the group rates available under FEGLI, but no physical exam is required to convert.
If you decide to convert your FEGLI coverage to an individual life insurance policy, the following conditions apply:
- The individual policy will be issued by any eligible insurance company you select that has agreed to issue such policies under the provisions of the group policy.
- The individual policy may be in any form customarily issued by the insurance company you select, with the exception of term insurance, universal life insurance, or any other type of life insurance that has an indeterminate premium. It does not include disability or accidental death or dismemberment benefits.
- You may choose to have this individual policy written for an amount equal to or less than the total amount of life insurance you have under the group policy, including all options on the date your insurance stops.
You (or your assignee, if pertinent) must submit the request for conversion information to OFEGLI. OFEGLI must receive the request for conversion within 31 calendar days of the date on the conversion notification from the employing agency (60 days if overseas) or within 60 calendar days after the date of the terminating event (90 days if overseas), whichever is earlier.
For Option C, you can request to have individual policy information for a family member or members (such as children). However, the individual policy is issued to the family member. In the case of a minor child, the parent can apply on the child’s behalf for an individual policy. You can only obtain a conversion policy for family members who exist on the effective date of the conversion policy 32 days after separation.
Family members must submit a request for conversion information to OFEGLI. OFEGLI must receive the request for conversion within 31 calendar days of the date on the conversion notification the employee receives from his or her employing agency (60 days if overseas) or within 60 calendar days after the date of the terminating event (90 days if overseas), whichever is earlier. There is no extension to these time limits. Family members are considered to have refused coverage if they do not request conversion within these time limits.
Information on how you can convert your insurance is found in the Notice of Conversion Privilege (SF 2819), available from personnel offices and at www.opm.gov/forms. For both regular mail and overnight deliveries, conversion requests should be sent to: Office of Federal Employees’ Group Life Insurance, 200 Park Ave., New York, NY 10166-0188.
Life Insurance and Workers’ Compensation
If you become entitled to benefits from the Office of Workers' Compensation Programs (OWCP) for a job-related illness or injury that prevents you from working, you may continue your FEGLI coverage as an employee, including accidental death and dismemberment (AD&D) coverage for up to 12 months of non-pay status. Premiums will be withheld from your compensation. After this 12-month period, your FEGLI coverage may be continued (but without the AD&D) if you are in receipt of benefits from OWCP and are unable to return to duty and have been insured for: (1) the coverages you wish to continue for the five years of service immediately preceding the date of your entitlement to OWCP benefits or (2) the full period of service during which the coverages were available to you (if less than five years).
You must continue Basic life insurance to continue any Optional insurance you might have. Also, the number of multiples of pay you may continue under Optional B and C insurance is limited to the highest number of multiples you had that meet the above requirements.
At the end of 12 months of non-pay status (or at separation, if earlier), you will have the opportunity to convert all or a portion of your FEGLI insurance coverage to an individual (direct-pay) policy. If eligible to continue coverage and you do not convert, premium withholdings will be made from your compensation payment. For the purposes of the FEGLI program, a compensationer is treated as an annuitant. If a compensationer returns to federal employment under conditions that allow him or her to continue receiving compensation, Basic, Option A and Option C insurance held as a compensationer is suspended and the insured person obtains coverage as an employee. As with re-employed annuitants, Option B would remain with the individual’s compensation unless the individual elects to have it through re-employment. For other special policies for compensationers, see 5 CFR 870.
Life Insurance in Retirement
If you are retiring on an immediate annuity, you may retain your Basic insurance (but not the accidental death and dismemberment coverage) if you have been covered by FEGLI’s Basic life insurance for the five years of service immediately preceding the starting date of your annuity or the full period or periods of service during which the Basic life insurance was available to you, if less than five years. You also may retain all three forms of Optional insurance (but not accidental death or dismemberment coverage) if you are eligible to keep your Basic insurance and you have had that form of Optional insurance in force under those same restrictions. (Note: See Phased Retirement in Chapter 3, Section 1 for policies applying to those in phased retirement.)
The amount of your life insurance will be the amount you had at retirement, or until the end of the calendar month that follows your 65th birthday or retirement, whichever is later. It then may begin to reduce in value (as explained below under Retirees and Compensationers: Coverage and Premiums.) An annuitant may elect either full reduction or no reduction for each separate multiple of Option B and Option C. For example, a person with five multiples may elect no reduction on two multiples, while the three remaining multiples reduce fully. Premiums will be set accordingly (see the Monthly Premiums for Annuitants table).
The above conditions also hold true if at the time your Basic life insurance would otherwise stop or OPM determines that you are retiring on an immediate annuity and you did not exercise your right to convert to an individual policy as described above.
The elections regarding Options B and C are made at retirement. Those who retired before age 65 receive a notice shortly before turning that age reminding them of the choices they made and giving them a chance to change their elections. For those already over age 65 at the time of retirement, the reminder notice is sent as soon as the retirement processing is completed. This policy, effective May 6, 2016 under rules at 5 CFR 870.705, reinstated procedures used up to October 1, 2010 when rules effective that date had made the election at retirement binding.
Canceling Insurance—Unless you have assigned your insurance, you may cancel it at any time. If you cancel your Basic life insurance, you are canceling all your optional insurance as well. If you elected 50 percent reduction or no reduction for your Basic life insurance, you may cancel this additional coverage at any time. If you have Option A, you may cancel it at any time. You may reduce (or cancel) the amount of your Option B and Option C insurance at any time. To do so, write to Office of Personnel Management, Retirement Operations Center, P.O. Box 45, Boyers, PA 16017-0045. Provide your civil service retirement claim number (CSA number) and specify what action you want taken. Generally, the reduction or cancellation is effective at the end of the month in which OPM receives your written request. You will not receive a refund of any premiums paid through that month.
Termination of Insurance—FEGLI coverage will terminate if your entitlement to annuity benefits ends. For example, if you are a disability retiree under age 60 and you are found recovered or restored to earning capacity, your disability annuity and life insurance coverage will end. You do not have the 31-day extension of coverage and may not convert the life insurance to an individual policy. If you are a disability retiree whose annuity terminated in that situation, you will retain your life insurance coverage if you are entitled to and apply for an immediate discontinued service annuity.
If you are under age 60 and your disability annuity is reinstated due to loss of earning capacity or a recurrence of the disability for which you retired, you will be given an opportunity to have your life insurance coverage reinstated. Only coverage of the type and up to the amount you had in effect at the time your disability annuity was terminated can be reinstated. If you are entitled only to a deferred annuity after your disability annuity terminates, you cannot retain your life insurance coverage as a retiree, and you cannot convert it to an individual policy.
See Chapter 4, Section 4 for special considerations for re-employed annuitants.
Retirees and Compensationers: Coverage and Premiums
Following is a summary of FEGLI’s general rules governing insurance options and premium payments for federal retirees and compensationers (i.e., workers’ compensation recipients).
Basic Insurance—Prior to retiring or receiving compensation, you must make a written election as to the amount of post-65 Basic life insurance coverage you want to retain. You can obtain this election form, Continuation of Life Insurance Coverage as a Retiree or Compensationer (SF 2818) from your employing office or at www.opm.gov/forms. Unless you have elected a partial living benefit, you have three choices: a 75 percent reduction, a 50 percent reduction or no reduction. If you elect a partial living benefit, you have only two choices: termination of the insurance and conversion to an individual policy, or no reduction. The percentage reduction choices operate as follows:
- 75 Percent Reduction—Coverage is reduced by 2 percent a month beginning at age 65, with an ultimate reduction to 25 percent of the basic policy value. Anyone who retires on or after January 1, 1990, must pay the same premium as active employees until age 65 ($.325 per month per $1,000 of coverage). No further premiums will be withheld after the calendar month in which the retiree becomes 65.
- 50 Percent Reduction—Beginning at age 65, coverage is reduced by 1 percent a month until it reaches 50 percent of the basic policy value. There is a higher premium charged for this lesser reduction ($.965 per month per $1,000 of coverage until age 65 and $.64 a month per $1,000 of coverage thereafter).
- No Reduction—The basic policy value remains unchanged, resulting in a larger premium being charged—$2.265 per month per $1,000 of coverage until age 65 and $1.94 per month per $1,000 of coverage thereafter.
Unless you elected a partial living benefit, failure to make a written choice will result in OPM concluding that you have elected the 75 percent reduction.
Generally, all premiums will be withheld from your annuity or compensation payments. However, you may pay the premiums directly to the retirement system, if your annuity is insufficient to withhold the premiums.
If you have not assigned your insurance and decide to cancel your increased post-retirement coverage under the second or third items above, the amount of your Basic insurance coverage and the premiums would immediately drop to the level they would have been if you had originally elected the 75 percent reduction. You must elect No Reduction if you previously elected a partial living benefit, and your election may not be changed at a later date.
Optional Insurance—The face value of any optional life insurance will be the same as the amount carried at retirement (or if a compensationer, the date your insurance would otherwise have terminated, as explained above). You must pay the full amount for any optional insurance coverage you retain until you reach age 65. However, you may elect to keep up to the full amount of the Option B and C insurance in force and continue to pay the pertinent premiums. Unless the insurance has been assigned, such an election may be cancelled at a later date. Generally, the cost of optional insurance premiums will be withheld from your annuity or compensation payments.
At the end of the calendar month that follows your 65th birthday or your retirement, whichever is later, your Option A life insurance will be reduced by 2 percent each month until it reaches 25 percent of its face value. Option B and Option C insurance will continue to be reduced for 50 months, at which time coverage ceases, unless you elected to continue premiums.
Direct Payment of Premiums
Employees who have insufficient pay on an ongoing basis to cover their insurance premiums may pay those premiums directly. Insufficient pay on an ongoing basis means that the employing agency expects that during the next six months or more, an employee’s regular pay, after all other deductions, will not be enough to cover the required withholdings. The direct pay provision does not apply to employees in a non-pay status. Those employees are entitled to continue their FEGLI coverage for free for up to 12 months (unless they are receiving workers’ compensation benefits, in which case the coverage is not free). In general, at the end of 12 months in a non-pay status, FEGLI terminates.
Annuitants and compensationers whose payments are not large enough to cover their insurance premiums similarly may pay those premiums directly to the retirement system.
For More Information
Although OPM has overall responsibility for administering the FEGLI program, each federal agency is responsible for day-to-day operations of the program with respect to its own employees. Therefore, questions about life insurance policies should be addressed to the local personnel office or the agency insurance benefits officer at agency headquarters.
The FEGLI Program Handbook and additional information is at www.opm.gov/healthcare-insurance/life-insurance.