By Reg Jones
Life insurance after retirement
December 19th, 2011 | LIFE INSURANCE
Q: Can you explain the maze of life insurance options once one retires? Especially the 50 percent, 75 percent or no-reduction options?
A: When you retire, you must choose how much life insurance you want to carry into retirement. You can elect to retain the full face value of your policy on the day you retire or allow it to reduce by 75 percent or 50 percent. If you elect the 75 percent reduction, beginning at age 65 the coverage will decline by 2 percent per month until it reaches 25 percent of its original face value. If you elect 50 percent, it will decline by 1 percent per month until it reaches half of its face value. If you elect the 75 percent reduction, you will pay no premiums after you reach age 65. If you instead elect either to retain the full value of your policy or choose the 50 percent reduction, you will continue to pay premiums based on the dollar value of that insurance after you reach age 65. And those premiums will increase over time.
Tags: RETIREMENT
Survivor annuity eligibility
September 29th, 2011 | LIFE INSURANCE
Q: My father passed away a couple of months ago and my stepmother is waiting to receive the FEGLI and annuity packets from OPM. Per my father’s FERS paperwork, he left my stepmother, my brother (deceased) and I (adult child) as his beneficiaries. However, per all the survivor’s information on the OPM website, only children with disabilities, attending college or under the age of 18 are eligible. Is this true?
A: Any Federal Employees Group Life Insurance benefits will be divided according to your father’s designation of beneficiaries. However, while your stepmother would be entitled to a survivor annuity, to receive a survivor benefit a child must be unmarried and under age 18, be unmarried and incapable of self support because of a disability incurred before age 18, or be a full-time student between the ages of 18 and 22.
Tags: Survivor benefits
Contact for life insurance info
May 17th, 2011 | LIFE INSURANCE
Q: I need an address to find out what my life insurance amount is. I retired in 2006 and do not know how much life insurance I have. I have a toll-free number to call, but it is always busy, and the other number I was given has you waiting as much as 30 minutes.
A: You can send a FAX to OFEGLI at 315-792-6603 or 312-792-6802 or write them at OFEGLI. P.O. Box 6512, Utica, NY 13504-6512. You can also send an overnight delivery letter (such as by FedEx) to OFEGLI, 5950 Airport Road, Oriskany, NY 13424-3926.
Surviving-spouse benefits
March 7th, 2011 | LIFE INSURANCE
Q: My husband is 56 and we have been married for four years. He works with the Navy as a civilian and has 35 years of service. If he dies, will I get his civil service retirement? Will I still qualify for his Veterans Affairs benefits? How about his Social Security? I am 27. Does age make a difference? I know he doesn’t pay in for FEGLI. Do federal employees have life insurance covered by the government?
A: If your husband were to die, you would be entitled to a survivor annuity. The same is true if he was eligible for a Social Security benefit. However, because of your age, that benefit would be less than if you had reached full retirement age. I can’t speak to his VA benefits because that is a military matter and falls outside the scope of this forum. The Federal-Employees’ Group Life Insurance program is the only life insurance provided by the government. The Basic policy is covered by payroll deduction. Unless he waived that coverage, you would be entitled to the face value of that insurance.
Tags: military, survivor annuity
Insuring a partner
December 23rd, 2010 | Coverage choices LIFE INSURANCE POST-RETIREMENT Survivor benefits
Q: When I contacted my U.S. Postal Service personnel office and asked them whether I could name my partner as an insurable interest, I was told that I could not. What must I do to make this happen? We have been together over 11 years now and we own property together.
A: Your personnel office contact was mistaken. You can elect an insurable interest annuity for your partner. The way to do that is spelled out in Chapter 52, Survivor Benefit Elections, of the Office of Personnel Management’s CSRS and FERS Handbook for Personnel and Payroll Offices. Just go to this section of the handbook online and scroll down to Part 52A3, “Electing to Provide a Survivor Annuity to Someone with an Insurable Interest.”
Tags: survivor annuity, Survivor benefits, survivor coverage
Benefits after a private-sector takeover
December 20th, 2010 | Creditable service: CSRS CSRS annuity computation LIFE INSURANCE RETIREMENT SOCIAL SECURITY
Q: I am a Civil Service Retirement System Offset annuitant hired in 1968. In 1985, our branch of government was taken over by the private sector. The private sector bought all of my federal service. In 2002, there was a reduction In force. I was eligible for an early retirement at age 51 and therefore receive two retirement checks: One for federal service and the other for my time purchased by the private sector. As a CSRS Offset employee, at age 62 I am subject to the Offset Social Security calculations but also have the same time purchased by the private sector. What type of Social Security will I be entitled to?
A: You will receive a Social Security benefit based on all your Social Security-covered employment. However, because you were covered by CSRS Offset (CSRS and Social Security), your CSRS benefit will be reduced by the amount of Social Security benefit you earned while covered by CSRS Offset. To find out what that reduction would be, go to www.FEDbens.us and use the handy software you’ll find there.
Tags: Civil Service Retirement System, CSRS, CSRS offset, SOCIAL SECURITY
What happened to my FEGLI payments?
December 20th, 2010 | LIFE INSURANCE Premiums for employees Temporary continuation of coverage
Q: I was hired in 1968 and had Federal Employees’ Group Life Insurance deductions from the beginning of employment. However, in 1985 my branch of government was dissolved. As a result, the entire branch was transferred to the private sector (FHLBank). I would like to know what happened to the FEGLI deductions for those years of service. We were never refunded for those years worth of deductions.
A: The FEGLI is a term insurance program. As long as you were employed by the federal government and paid your share of the premiums through payroll deduction, you were covered. When you left the federal government, you received a free 31-day extension of coverage and were given the option of enrolling in a nongroup plan. After that, your FEGLI coverage ended. Because term insurance has no cash value, you weren’t entitled to a refund of your contributions.
Tags: Federal Employees' Group Life Insurance, FEGLI, insurance payments, LIFE INSURANCE
Survivor, family benefits after divorce
December 20th, 2010 | LIFE INSURANCE Survivor benefits
Q: My father passed away at age 79 on Oct. 29. He and my mother divorced Jan. 31, 1985, and she never remarried. He remarried, but his wife passed away Jan. 26, 2009. He has two adult children from his first marriage. Would his former spouse be entitled to any benefits before his children? There is no beneficiary and no court order on file.
A: She wouldn’t be entitled to any retirement benefits. Whether she would have title to any Federal Employees’ Group Life Insurance benefits would depend on who he had designated as his beneficiary.
Tags: divorce, ex-spouse, ex-wife, Federal Employees' Group Life Insurance, FEGLI, Survivor benefits
The “no reduction” option
December 13th, 2010 | Assignment of benefits LIFE INSURANCE RETIREMENT
Q: Can you define the “no reduction” option? My understanding of it is this: For example, take a basic life insurance policy, prior to retirement, worth $100,000. At retirement, I can choose to keep paying for $100,000 coverage up to age 65 with the “no reduction” option. Is that correct, or is the coverage amount based on your retirement annuity, which would be much less ($58,000)?
A: The “no reduction” option allows you to preserve the face value of your insurance on the day you retire. It has no connection to the amount of your annuity.
Life insurance transfer
December 3rd, 2010 | LIFE INSURANCE
Q: I am a 57-year-old FERS employee. For the last 20 or so years of my 27-year career, I have carried a private life insurer (WAEPA) instead of FEGLI. Would it be beneficial to me to switch back to FEGLI, which I believe now has lower premiums? Also, how long would I have to carry FEGLI before I could retire?
A: I have no idea if it would be beneficial for you to switch. However, if you do, you would need to be enrolled in FEGLI for five consecutive years before you retire to carry that coverage into retirement.
Tags: FERS, RETIREMENT