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Frequently Asked Questions Insurance

Life

  • Living Benefits payments received on or after January 1, 1997, are not subject to Federal income tax. However, some states have laws, regulations, or rulings concerning the taxability of Living Benefits (also called accelerated death benefits). You should consult a tax advisor or your State's tax department for specific information concerning State income tax laws.

    Qualified payments from viatical settlement firms received on or after January 1, 1997 are also not subject to Federal income tax provided the companies meet certain tax exemption qualifications.

    If you are considering assigning your insurance to a viatical settlement firm, you should consult a tax advisor to determine if you and the viatical settlement firm meet the tax exemption qualification standards.

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  • Yes, you as the insured, can cancel coverage even if there is a court order on file.
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  • The Office of Federal Employees' Group Life Insurance pays interest on claims from the date of the insured's death to the date of the payment. OFEGLI pays a maximum of two years worth of interest, even if the time from date of death to date of payment is over two years.
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  • The MetLife TCA is a settlement option offered by MetLife for the payment of claims. A MetLife TCA is not a checking, savings, or money market bank account. Since the MetLife TCA is not a bank account, it is not insured by the FDIC or any government agency. Instead, MetLife guarantees the full amount in the MetLife TCA, including all interest earned. MetLife's guarantee is further backed by the beneficiary's respective state guaranty association. Maximum guarantee limits vary from state to state and may change over time. If the beneficiary chooses a MetLife TCA, the relationship is between the beneficiary and MetLife, not with the federal government or any of its agencies. You or your beneficiary can find additional information about state guaranty associations on the National Association of Insurance Commissioners (NAIC) website http://www.naic.org.

    The MetLife TCA offers a minimum guaranteed annual effective interest rate, meaning that MetLife commits to pay the beneficiary at least that specified rate of interest on the money in the account. The beneficiary begins earning interest the day the MetLife TCA is created. Interest is earned daily, but is not credited until the last day of the month. The interest rate offered on the MetLife TCA may be better or worse than the prevailing market rates. The MetLife TCA is a product offered by MetLife on which the company may make a profit. The beneficiary pays no monthly maintenance fees on a MetLife TCA.

    The beneficiary has complete control of, and access to, the entire amount of the insurance proceeds. The beneficiary can withdraw the full amount from the MetLife TCA at any time. The information packet the beneficiary receives will include a draft book (similar to a checkbook). At any time and at no cost, the beneficiary can write drafts (similar to checks) from a minimum of $250 up to the full balance of the account. In addition, the beneficiary will receive periodic activity statements, and can designate a beneficiary for the account. If the beneficiary chooses the MetLife TCA settlement option, he or she will receive more detailed information when the account is opened.
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  • If you are terminally ill, you can assign your FEGLI coverage to a viatical settlement firm in exchange for cash. Some viatical firms also accept assignments if you are chronically ill.
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  • No. When you receive a partial Living Benefit, the amount of your remaining Basic insurance is frozen. It does not increase due to a salary increase, nor does it decrease due to a salary reduction. If you receive a full Living Benefit, your remaining Basic Insurance Amount equals zero, and this also is unchanged due to changes in salary.
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  • Yes, Public Law 110-417, the Duncan Hunter National Defense Authorization Act allows new opportunities for certain employees. The new election applies if you are a civilian employee in the Department of Defense eligible for FEGLI who is designated as "emergency essential" under section 1580 of Title 10. You may elect Basic, Option A and Option B (up to the maximum of 5 multiples). You must make the election on the SF 2817  [278 KB] (or its electronic equivalent) within 60 days of the date of the notification of the designation as an emergency essential employee. Contact your employing agency human resources office for more information. See more details in BAL 08-204  [45 KB].
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  • No. Someone with a power of attorney cannot sign a Designation of Beneficiary form on behalf of an insured federal employee or annuitant.
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  • Write "See Attached" in Part B of the form. Use a blank sheet. Print your name, date of birth and social security number at the top of the attachment. List the information required in Part B for each beneficiary. Sign the form and attachment. Have the same two people witness both of your signatures and sign the form and attachment.
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  • Living Benefits payments come from the Employees' Life Insurance Fund (Part of the U.S. Treasury). Viatical settlement firms are private firms not connected with the Federal Government.

    The Federal law determines the amount of insurance available and the requirement for receiving a Living Benefit payment. Viatical settlement firms set their own requirements and payment amounts.

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