Retirement & Financial Planning Report

Although retirees generally cannot add to their FEGLI life insurance—they can only decrease or cancel it, as a rule—there is an exception for rehired annuitants. Thus, someone wishing to add life insurance in retirement might explore reemployment if only for that reason.

If you are reemployed by the government as a retiree, you typically will automatically acquire FEGLI Basic Life insurance coverage as an employee unless you waive all insurance coverage. You are also eligible for Option A unless you have on file a waiver of Basic Life insurance or Option A. In addition, you can acquire Option C as an employee unless you have on file a waiver of Basic Life insurance or Option C.

If you acquire the above life insurance coverage(s) as an employee, the applicable premiums will be withheld from your salary by your employing agency and your life insurance coverage as a retiree will be suspended during your reemployment. Any premiums withheld from your annuity for Basic, Option A and Option C insurance also will be suspended after your employing agency notifies OPM so it can take the appropriate action.

You typically will also eligible for Option B, unless you have on file a waiver of Basic Life insurance or Option B. However, if you have this insurance as a retiree, that coverage will continue unless you file an election of Option B on Standard Form 2817, Life Insurance Election, with your employing agency within 31 days after you are reemployed. If you do so, premiums for your employee-acquired Option B will be withheld from your salary.

Note: Any waiver of life insurance you file with your employing agency as a reemployed annuitant applies not only to your life insurance as an employee, but also to the insurance you have as a retiree.

After your reemployment ends, you may retain your reemployment-acquired life insurance (except accidental death and dismemberment benefits) if:

* you complete at least one year of continuous full-time service (or part-time service which is equivalent to one year of full-time service) and qualify for a supplemental annuity or you acquire a new retirement right; and

* you were insured for the five years of service immediately preceding your separation from reemployment or for the full period(s) of service during which the insurance was available to you, if less than five years.

If you are eligible for a supplemental annuity, you can choose to continue your reemployment-acquired life insurance or have your suspended retiree coverage reinstated. If your annuity continued during your reemployment but you are not eligible to continue your reemployment acquired life insurance, the life insurance coverage you had as a retiree will be reinstated.