In my last article, I offered a refresher course on the Basic insurance coverage provided by the Federal Employees’ Group Life Insurance program. In it I pointed out that the government shares the cost of that coverage, which keeps your premiums low. In this article, I’ll offer a refresher course on the kinds of optional coverage available to those who already have Basic coverage. And the first thing you need to understand is that while the government has been able to secure group rates for optional coverage, you will be responsible for paying 100 percent of the premiums.
Option A
This is called Standard Optional and allows anyone who is covered under Basic insurance to purchase an additional $10,000 of coverage. The premiums vary by age, beginning at $0.30 per $1,000 of coverage and ending at $6.00 per $1,000 through age 64. Thereafter, no premiums are required and the coverage declines by 2 percent per month until it reaches 25 percent of its face value.
Option B
Called Additional Optional insurance, this benefit allows employees covered by Basic insurance to elect amounts of coverage that are equal to one, two, three, four or five times their rate of basic pay, rounded to the next higher $1,000. Once again, the premiums vary by age and range from $0.03 per $1,000 of coverage at age 35 up to $2.40 per $1,000 at age 80 or above. Full coverage and the payment of premiums will continue until cancelled by the employee or retiree, which he can do unless he has assigned those benefits to another (I’ll explain assignment in the fourth article in this series). However, a retired employee no longer has to pay any premiums beginning at age 65 if he elects to have the coverage decrease at a rate of 2 percent per month until it reached 25 percent of it original face value.
Option C
This Family Option allows employees covered by Basic insurance to purchase coverage for their family members. In this case that means their spouse and unmarried dependent children under age 22.
The amount of the coverage can be up to five multiples of $5,000 for a spouse and of $2,500 for each eligible child. As before, the cost of premiums is based on the employee’s age. It begins at $0.27 per $1,000 of coverage at age 35 and rises to $6.00 per $1,000 at age 80 or older. Just as was the case with Option B, a retiree who is willing to let the value of the coverage decrease by 2 percent per month beginning at age 65 will no longer have to pay any premiums. And once again, this coverage can be cancelled at any time unless, as noted above, the enrollee or retiree has assigned the benefits to someone else.
A closing word. Just as is true of Basic insurance, when you die, the proceeds of your Option A and B insurance will be paid to the beneficiary you designated on a Standard Form 2808 (CSRS) or 3102 (FERS). So it will pay you to keep that designation current, because the person you designated when you first elected that coverage may not be the one you want to receive that money now. As for Option C, you are the beneficiary.
