One feature of the Federal Employees Group Life Insurance program that enrollees typically hope they’ll never use but that they should understand in any event is the living benefit.
The living benefit is a lump-sum that you may elect if you are terminally ill and have a documented medical prognosis that you are not expected to live more than nine months. Eligible persons may elect a full lump-sum payment equal to their Basic life insurance amount, plus any extra benefit for persons who are under age 45, that would be in effect nine months after the date the OFEGLI receives a completed claim for living benefits form. Annuitants cannot elect a partial living benefits payment; that option is available only to employees. Remember, if you elect a living benefit, your survivors won’t be eligible for any Basic insurance benefit.
If you have assigned your life insurance coverage, neither you nor the assignee may elect living benefits.
Your living benefits payment will be reduced by a nominal amount to make up for lost earnings to the life insurance fund because of the early payment of benefits.
If you elect living benefits after retirement, no Basic life insurance will be payable after your death. OPM will stop withholding any Basic life insurance premiums from your monthly annuity. If you elected living benefits before you retired, the amount of Basic life insurance payable after your death and the premiums OPM withholds from your annuity depend upon the amount of living benefits you received before retirement.
Your election of living benefits has no effect on the amount of any Optional life insurance you may have. OPM will continue to withhold any premiums for Optional insurance.
If you elect a living benefit and don’t die within the expected time frame, you will not have to repay the money.
You may contact the FEGLI at 800-633-4542 to obtain the form to elect living benefits (Form FE-8). This form is not available from personnel offices or from retirement systems.