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Frequently Asked Questions Insurance

Is there a penalty charge if I elect Living Benefits from my FEGLI life insurance?

Your Living Benefits payment will be reduced by a nominal amount to make up for lost earnings of the Life Insurance Fund because of early payment of benefits. This nominal amount is called an actuarial reduction and it is 4.9%. Here is an example:

Samantha's Basic Insurance Amount is $59,000. She wants to elect a Full Living Benefit. She is 50 years old so there is no Extra Benefit. If approved, the Office of Federal Employees' Group Life Insurance would pay Samantha $56,109.00 ($59,000 less 4.9% or $2,891).

For more information about Living Benefits, see the FEGLI Handbook.

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