One feature of the Federal Employees’ Group Life Insurance program that enrollees generally hope never to use, but must understand in any case, is the “living benefit”.
Subsistence Benefit is a lump sum you can choose if you are terminally ill and have a documented medical prognosis that you are not expected to live longer than nine months. Eligible persons may choose a full lump sum payment equal to their basic life insurance amount, plus any additional benefits for persons under age 45, which would be effective nine months after the date OFEGLI receives a completed living benefits application form. . Annuitants cannot choose a partial Living Benefit payout; this option is only available for employees. Remember that if you choose a living benefit, your survivors will not be eligible for any basic insurance benefits.
If you have assigned your life insurance coverage, neither you nor the assignee can elect living benefits.
Your living benefit payment will be reduced by a nominal amount to compensate for the loss of income to the life insurance fund due to the early payment of benefits.
If you choose living benefits after your retirement, no basic life insurance will be payable after your death. OPM will stop withholding basic life insurance premiums from your monthly pension. If you elected living benefits before you retired, the amount of basic life insurance payable after your death and the premiums the OPM deducts from your annuity depend on the amount of living benefits you received before you retire.
Your choice of living benefits does not affect the amount of any optional life insurance you may have. OPM will continue to withhold all premiums for optional insurance.
If you choose a living benefit and you don’t die on time, you won’t have to repay the money.
You can contact FEGLI at 800-633-4542 to obtain the Living Benefits Election Form (Form FE-8). This form is not available from personnel offices or pension systems.
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