There are three main reasons you might want to consider assigning your FEGLI insurance. Image: fizkes/Shutterstock.com
By: FEDweek StaffYou may “assign” your Federal Employees Group Life Insurance to one or more persons, firms or trusts. Assignment means that you agree to give up ownership of your Basic, Standard Optional (“Option A”) and Additional Optional (“Option B”) life insurance coverage forever (note: Family “Option C” coverage cannot be assigned since you are the beneficiary, not the insured person).
When you assign coverage, the assignee becomes the beneficiary but you must continue to pay the premiums.
There are three main reasons you might want to consider assigning your FEGLI insurance:
To comply with a court order—You may make an assignment of your group life insurance in order to comply with a court order for divorce. Assigning life insurance coverage to a former spouse provides a means to assure the court that life insurance benefits will be payable to a former spouse or his or her designated beneficiary. Otherwise, under the life insurance law, an insured person may change his or her designation of beneficiary at any time.
For inheritance tax purposes—Generally, if an assignment is made at least three years before an individual’s death, the insurance is considered a gift to the assignee, rather than a part of the estate of the insured. Consult a competent estate tax advisor. A determination as to whether the life insurance proceeds are included in your gross estate must ultimately be made by the IRS at the time of your death. In attempting to determine the tax effect of an assignment, you should refer to tax laws, case law and IRS regulations. In addition, you should consider obtaining a ruling from the IRS.
To obtain accelerated death benefits—You can assign your life insurance to a viatical settlement firm if you are terminally ill in order to obtain a portion of the value of your life insurance before your death. Consider first whether you could accomplish the same goal by electing a Living Benefit, however. In a Living Benefit, you can elect to receive a lump-sum payment if you have a documented medical prognosis that you are not expected to live more than nine months.
OPM Advises Agencies on Conducting RIFs During Shutdown
Updated Shutdown Contingency Plans Show Range of Impacts
Use Shutdown as Justification for More RIFs, OMB Tells Agencies
Unions Win a Round in Court Disputes over Anti-Representation Orders
Deferred Resignation Periods End for Many; Overall 12% Drop
Senate Bill Would Override Trump Orders against Unions
TSP Adds Detail to Upcoming Roth Conversion Feature
See also,
Legal: How to Challenge a Federal Reduction in Force (RIF) in 2025
How to Handle Taxes Owed on TSP Roth Conversions? Use a Ladder
The Best Ages for Federal Employees to Retire
Best States to Retire for Federal Retirees: 2025
Retention Standing, ‘Bump and Retreat’ and More: Report Outlines RIF Process
