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Frequently Asked Questions Insurance

Life

  • In theory, yes. If you can find someone willing to pay you cash in return for your assignment, certainly you are free to enter into such an arrangement. In practice, no. Viatical settlement firms pay terminally or chronically ill individuals cash in exchange for receiving the assignment of their life insurance coverage. While the required life expectancies vary by firm, no firm in the industry will pay for receiving assignment from an individual who is not terminally or chronically ill. It simply makes no sense. The firm would have no expectation of when they would receive the death benefit. They would have to discount the amount paid so much in order to account for this uncertainty, that the amount paid would go down to zero.

    For more information about assignment, see the FEGLI Handbook.
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  • Your insurance continues automatically for the first 12 months of nonpay status. If you return to pay status for a period of four consecutive months or more, you start a new 12-month period of continued coverage. Four consecutive months in pay status means any four-month period during which you are in pay status for at least part of each pay period. For example:

    Melissa was on leave without pay (LWOP) from January 1 to February 28, 2012. She returned to work on March 1, 2012. She worked through July 31, 2012, and again went on LWOP. Since she was in a pay and duty status for at least four consecutive months, she will start a new 12-month period of continued coverage. The period she was on LWOP from January 1 through February 28, 2012, will not count against the new 12-month period that starts August 1, 2012. 

    If you return to pay status for less than four consecutive months, and you then again go into a nonpay status, you continue in the same 12-month nonpay status period. Another example will help.

    Mai went on leave without pay (LWOP) on February 1, 2012. She then returned to work on May 1, 2012. She worked through July 31, 2012, and again went on LWOP beginning August 1, 2012. Since she was in a pay status for less than four months, we continue in the same 12-month LWOP status. If she does not return to pay and duty status, Mai's life insurance will end at the end of the day on April 30, 2013.

    If you return to pay status for less than four consecutive months after your insurance ends due to 12 months in nonpay status, you do not get another 12-month period of continued coverage. You have insurance while you are again in pay status, but your insurance will stop on the last day of your last pay period in pay status. Here is an example of this situation.

    Carlos' insurance ended on August 31, 2012 which was the end of 12 months in a nonpay status. Carlos returned to work on October 1, 2012. His life insurance is reinstated. On November 16, 2012, Carlos again goes into a LWOP status. Since he was in a pay status for less than four consecutive months, his life insurance ends at the end of the last day of the pay period in which Carlos went on LWOP or November 20, 2012. He does not begin a new 12-month period of continued coverage.
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  • No. There are no waivers of the five year/all opportunity rule for continuing FEGLI life insurance coverage into retirement. There are no exceptions to the "no waiver" rule — it does not matter whether you retire on disability, accept a voluntary incentive payment, etc. The only way to continue coverage into retirement is to meet the five year/all opportunity rule. Yes, this is different from the health benefits program which does allow for waivers under certain circumstances.

    For more information about retiring with FEGLI life insurance, see the FEGLI Handbook.
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  • Not unless you have legally adopted your grandchild or if your grandchild meets the definition of a foster child. To qualify as a foster child, the child must live with you in a regular parent-child relationship and you must expect to raise the child to adulthood.

    For more information, see the FEGLI Handbook.

    FEGLI life insurance
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  • No, you do not have to complete a designation form

    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 by filing an Assignment, Federal Employees' Group Life Insurance (RI 76-10), OFEGLI will pay benefits:

    • First, to the beneficiary(ies) designated by your assignee(s), if any;
    • 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 your widow or widower;
    • 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;
    • Sixth, if none of the above, to your other next of kin as determined under the laws of the state where you lived. 
    If you did not assign your insurance and there isn't a valid court order on file, and you are not satisfied with the order of precedence described above, you should complete a designation form and indicate how you want OFEGLI to pay the benefits.
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  • If you are an employee in a FEGLI-eligible position, a Qualifying Life Event allows you to enroll in FEGLI Basic, Option A, Option B (up to 5 multiples), and/or Option C (up to 5 multiples).  You must enroll in Basic to be able to enroll in any or all Optional coverage.

    There are four FEGLI Qualifying Life Events:

    • Marriage
    • Divorce
    • Death of a spouse
    • Acquisition of an eligible child

    To enroll based on a Qualifying Life Event, you must submit a Life Insurance Election (SF 2817) to your human resources office within 60 days after the day of the event.  For more information, contact your human resources office and review page 4, row 2 of the Election form.
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  • No. You cannot convert Option C life insurance when family members lose eligibility.

    You can convert Option C only when you separate from service. If you do not want to convert the coverage when you separate, your family members covered under Option C are eligible to convert their coverage to an individual policy. Eligible family members can also convert their coverage upon your death. They can ask your human resources office for a Notice of Conversion Privilege (SF 2819).

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  • Your enrollment in Basic will be effective on the first day you are in pay and duty status on or after the date OFEGLI approves your request. If you also want to enroll in Option A and/or Option B, this coverage will be effective on the first day you are in pay and duty status on or after the date OFEGLI approves your request and your human resources office receives your Life Insurance Election (SF 2817) electing such coverage.
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  • FEGLI Basic and Option A each include Accidental Death and Dismemberment (AD&D) coverage for employees at no additional charge. AD&D coverage cannot be carried into retirement. AD&D benefits are paid in addition to regular death benefits.

    For the Office of Federal Employees' Group Life Insurance to pay AD&D benefits, the death or loss must occur within one year after the accident and be a direct result of bodily injury sustained from that accident.

    AD&D coverage in Basic is equal to the amount of your Basic insurance. AD&D coverage in Option A is equal to $10,000.

    For more information about AD&D, see the FEGLI Handbook.

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  • Most Federal employees are automatically enrolled in Basic insurance unless they waive this coverage. Basic is effective on the first day you enter in a pay and duty status in an eligible position.

    If you have Basic insurance, you may also elect Optional insurance. You must specifically elect the types of Optional insurance you wish to carry within 60 days of becoming eligible. Optional insurance is effective on the first day you are in a pay and duty status on or after the day your human resources office receives your election.

    To elect Optional insurance within 60 days of becoming eligible, or to cancel (waive) Basic, submit the FEGLI Election Form to your human resources office.

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