Federal Employees' Group Life Insurance Program (FEGLI)

RI 70-09 - For Federal Retirees and Their Survivors

What Happens to My Life Insurance Coverage When I Retire?

Your coverage will automatically continue when you retire if:

• You retire on an immediate annuity and had the coverage for:

  • The five years of service immediately before the starting date of your annuity or, for annuitants retiring under the Federal Employees Retirement System (FERS) who postpone receiving their annuity, the five years immediately before their separation date for annuity purposes, or
  • All period(s) of service during which that coverage was available to you if it's less than five years, and
    
    
• You (or your assignees)do not convert the coverage to a private policy.

Basic Insurance in Retirement

The amount of your Basic insurance in retirement is your BIA (Basic Insurance Amount) at the time you separated as an employee. This amount continues until you reach age 65, after which it may reduce based on the election options described below. You will not have Accidental Death and Dismemberment coverage in retirement.

When you retire, you must choose the type of reduction you want by completing a Continuation of Life Insurance Coverage as a Retiree or Compensationer (SF 2818) provided by your human resources office. For Basic insurance, you must choose 75% Reduction, 50% Reduction, or No Reduction. You can change to 75% Reduction at any time; your coverage will be as if you had originally elected 75% Reduction and your "extra premium" will stop. You will not receive a refund of premiums.

• What is 75% Reduction?

  This means your Basic insurance will reduce by 2% of the pre-retirement amount each month. The reduction starts at the beginning of the second month after your 65th birthday or at retirement, whichever is later. Your Basic insurance will continue to reduce until 25% of the preretirement amount remains. Your Basic insurance is free once it starts to reduce.

• What is 50% Reduction?

  This means your Basic insurance will reduce by 1% of the pre-retirement amount each month. The reduction starts at the beginning of the second month after your 65th birthday or at retirement, whichever is later. Your Basic insurance will continue to reduce until 50% of the preretirement amount remains. When you turn 65, your "regular" premium for Basic insurance stops, but you continue to pay an extra premium for this choice. See the chart below for these premiums.

• What is No Reduction?

  This means your Basic insurance will not reduce. When you turn 65, your "regular" premium for Basic insurance stops, but you continue to pay an extra premium for this choice. See the chart below for these premiums.

Optional Insurance in Retirement

The amount of your Optional insurance in retirement depends on the options you had at the time you separated as an employee. This amount continues until you reach age 65, unless you elect No Reduction (for Option B and Option C only.)

• Option A - Standard:

  If you are eligible to continue Option A into retirement, it will reduce by 2% of the preretirement amount each month until it reaches 25% of the pre-retirement amount. The reduction starts at the beginning of the second month after your 65th birthday or at retirement, whichever is later. Option A is free once it starts to reduce. You cannot choose No Reduction for Option A. If you are eligible to continue Option B and/or Option C into retirement, you must choose whether you want these options to reduce, as explained below.

• Option B - Additional:

  If you retire before age 65, you have two choices at retirement: Full Reduction for all of your multiples or No Reduction for all of your multiples. At age 65, or at retirement, if later, you will be able to choose the number of multiples that will reduce.

  If you choose Full Reduction, the value of your Full Reduction Option B multiples will reduce by 2% of the pre-retirement amount each month for 50 months, at which time coverage on those multiples will end. The reduction starts at the beginning of the second month after your 65th birthday or at retirement, whichever is later. Option B Full Reduction multiples are free once the reductions start.

  If you choose No Reduction, the value of your No Reduction Option B multiples will not reduce. You will continue to pay the full premium for all No Reduction multiples until you die, change those multiples to Full Reduction, or cancel those multiples. If you choose No Reduction, you can change to Full Reduction at any time (unless you assigned your coverage. Then, only your assignee can change). However, if you change to Full Reduction after you reach age 65, the level of coverage you have will be as if you had originally elected Full Reduction. You will not receive a refund of premiums.

• Option C - Family:

  If you retire before age 65, you have two choices at retirement: Full Reduction for all of your multiples or No Reduction for all of your multiples. At age 65, or at retirement, if later, you will be able to choose the number of multiples that will reduce.

  If you choose Full Reduction, the value of your Full Reduction Option C multiples will reduce by 2% of the pre-retirement amount each month for 50 months, at which time coverage on those multiples will end. The reduction starts at the beginning of the second month after your 65th birthday or at retirement, whichever is later. Option C Full Reduction multiples are free once the reductions start.

  If you choose No Reduction, the value of your No Reduction Option C multiples will not reduce. You will continue to pay the full premium for all No Reduction multiples until you die, change those multiples to Full Reduction, or cancel those multiples. If you choose No Reduction, you can change to Full Reduction at any time. However, if you change to Full Reduction after you reach age 65, the level of coverage you have will be as if you had originally elected Full Reduction. You will not receive a refund of premiums.

Basic Insurance-Annuitants*
Cost For Each $1,000 Of Your Basic Insurance Amount¹ Every 28 Days

^* These are the current rates through 2007. They may change in future years. For more information, see the FEGLI website at www.opm.gov/insure/archive/life.

¹ Basic Insurance Amount (BIA) - Your final annual rate of basic pay, rounded to the next even $1,000, plus $2,000 (or a minimum of $10,000) (or the post-election BIA you had after your election of a partial Living Benefit). Your BIA does not include the Extra Benefit or Accidental Death and Dismemberment coverage.

² The regular premium automatically stops on the first day of the month after you reach age 65. If you retire after reaching 65, you do not pay the regular premium.

³ The reduction starts at the beginning of the second month after your 65th birthday or at retirement, whichever is later.

Table of Contents