Those approaching retirement who are interested in keeping their Federal Employees Group Life Insurance benefits in retirement should be aware of the basic rules. 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 beginning within a month after you separated);
you have been 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 did not convert your life insurance to an individual policy.
Note: The five-year requirement applies to any FEGLI new election or increase of prior coverage chosen during the September 2016 open season. Since that doesn’t take effect until October of this year, those elections can’t be carried into retirement for those retiring before October 2022.
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.
If you are not eligible to (or do not want to) continue life insurance coverage as a retiree, you will be given the opportunity to convert to an individual policy. Generally, to have continuous insurance protection, you need to apply for the individual policy and pay the first premium to the insurance company within the 31-day temporary extension of coverage period.