FEGLI Coverage After Retirement

FEGLI life insurance coverage after retirement

To carry your insurance coverage(s) into retirement you must have been enrolled in FEGLI for the five years before your retirement, or from your earliest opportunity to enroll. If you don’t meet that requirement, you cannot continue coverage.

Converting Coverage

If you are not eligible to (or do not want to) continue your FEGLI coverage into retirement, you must either drop the coverage or convert it to an individual policy. The policy will stay in force for 31 days following retirement at no cost to you.

If you wish to convert to an individual policy, to have continuous insurance protection you have to apply for the individual policy and pay the first premium to the insurance company within the 31-day temporary extension of coverage period. You must pay the full amount of the premiums yourself. The actual amount will be based on the dollar amount of the insurance you decide to convert, your age and your risk category. (Risk is based on an assessment of your medical condition and habits, for example whether you are a smoker.)

Note: If you decide to convert some or all of your current coverage to an individual policy, you will not be required to take a medical exam to qualify.

Continuing Coverage

Your Basic Life, Option A-Standard, Option B-Additional and Option C-Family insurance coverages (depending on what coverage you may have) are continued into retirement if:

  • you retire on an immediate annuity (one which began within a month after you separated); and
  • you were insured for the five years of service immediately preceding your annuity commencing date or for the entire period(s) during which the coverages were available to you; and
  • you do not convert your life insurance to an individual policy.

If you are receiving annuity payments, your life insurance premiums are withheld from your annuity.

Note: Under FERS, an immediate annuity includes eligibility for an annuity if you separate at the minimum retirement age and have 10 years of service. If you meet the three requirements above, you may continue your life insurance coverage as a retiree even if you choose to postpone receipt of your annuity. If you do choose to postpone receiving your annuity, your coverage stops until the date your annuity begins. If you want to continue the coverage you had when you separated, it will resume when your monthly payments begin, even if you convert your life insurance to an individual policy upon your separation for retirement.

Basic Insurance

When you retire, your Basic insurance will be equal to your salary at the time you retired (rounded up to the next higher $1,000) plus $2,000. The cost of that insurance to you will depend on the post-retirement option you choose.

If you elect the 75 percent reduction, you will pay the same premiums you paid as an employee ($.3250 per $1,000 per month) until you reach age 65. At that point, you would pay no more premiums and the value of your insurance would decline by 2 percent per month until it reaches 25 percent.

If you elect the 50 percent reduction, you will pay a higher premium ($1.035 per $1,000 per month) until you reach age 65, at which point your premiums will drop to $.71 per $1,000 per month and your insurance value will decline by 1 percent per month until it reaches 50 percent.

The no reduction option is the most expensive. To retain the same insurance value you had when you retired, you will pay $2.455 per $1,000 per month until age 65, when your premium will drop to $2.13 per $1,000 per month.

Option A

If you are enrolled in Option A-Standard coverage, you may continue that coverage into retirement if you wish. It is worth $10,000, for which you pay the full cost. Premiums for this insurance rise with your age. For example:

  • 50 through 54—$2.38 per month
  • 55 through 59—$4.33 per month
  • 60 through 64—$13 per month
  • 65 and over—no charge*

* For retirees, at age 65, premiums will cease and the value of your insurance will drop by 2 percent per month until it reaches 25 percent.

Note: While Basic and Option A insurance provide accidental death and dismemberment coverage while you are employed by the government, that coverage stops when you retire.

Option B

If you are enrolled in Option B-Additional coverage, you may also continue that coverage into retirement. Depending on the choice you made when electing this coverage, you may have two, three, four or five times you annual basic pay (after rounding it up to the next $1,000). Like Option A-Standard, you pay the full cost for this insurance and the premiums are based on your age:

  • 50 through 54—$.238 per $1,000 per month
  • 55 through 59—$.433 per $1,000 per month
  • 60 through 64—$0.953 per $1,000 per month
  • 65 through 69—$1.17 per $1,000 per month*
  • 70 through 74—$2.08 per $1,000 per month*
  • 75 through 79—$3.90 per $1,000 per month*
  • 80 and over—$5.72 per $1,000 per month*

* For retirees who do not elect to stop the future reduction of coverage, at age 65 premiums will cease and the value of insurance will drop by 2 percent per month until it reaches zero. If you elect to have no reduction in your Option B coverage, its value will not be reduced (unless you later cancel the election or change your coverage amount) and premiums will continue beyond your 65th birthday. This decision is made at retirement but just before you reach age 65 (if you are retired by that age) the government will contact you to remind you of the choice you made and give you a second chance to make an election. For those who retired after age 65, this reminder and second chance occurs soon after processing of the retirement application is completed.

Option C

Option C-Family insurance provides life insurance coverage for your present spouse and unmarried dependent children (other than a foster child). If you are enrolled in this option, for which you pay the full cost, coverage is provided for up to five multiples of $5,000 for a spouse and $2,500 for each eligible child. You may continue this coverage into retirement. Like Options A and B, the premiums are based on your age group. For example:

  • 50 through 54—$1.99 per multiple per month
  • 55 through 59—$3.21 per multiple per month
  • 60 through 64—$5.85 per multiple per month
  • 65 through 69—$6.80 per multiple per month*
  • 70 through 74—$8.30 per multiple per month*
  • 75 through 79—$11.40 per multiple per month*
  • 80 and over—$15.60 per multiple per month*

* At age 65, premiums stop and the value of this coverage will decline at 2 percent per month for 50 months, at which time coverage will end, unless the retiree elects to keep the full amount of insurance in effect and continue paying premiums. This decision is made at retirement but just before you reach age 65 (if you are retired by that age) the government will contact you to remind you of the choice you made and give you a second chance to make an election. For those who retired after age 65, this reminder and second chance occurs soon after processing of the retirement application is completed.

Changing Coverage After Retirement

Unless you have assigned your insurance, you may cancel it at any time. If you cancel your Basic insurance, you are canceling all your Optional insurance as well.

If you elected the 50 percent or no reduction schedule for your Basic life insurance, you may cancel this additional coverage at any time. You may also reduce (or cancel) the amount of your Option B insurance, if you have this coverage, or cancel any or all other Optional life insurance coverages you may have.

Termination of Insurance After Retirement

Your federal life insurance 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.

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