While the loss of a parent is a great loss for children to bear, the federal government has made life a little easier for them by providing survivor annuities, and, in most cases, continued health benefits coverage. Further, there is always the prospect of life insurance payments if there is no one in line before them.
FEHB—If you die while enrolled in the Federal Employees Health Benefits (FEHB) program with other than self-only coverage, all of your survivors who meet the definition of family members will automatically continue to be enrolled, as long as any one of them receives a survivor annuity. If there is only one survivor annuitant and no other family member is eligible for continued coverage, the enrollment will be changed automatically to the less expensive self-only coverage.
Your child may continue to be covered under a survivor parent’s FEHB plan until he or she reaches age 26. If there is no surviving parent, coverage ends when the annuity ends, generally at age 18. At that point, the child may convert to an individual policy (usually with lower benefits) or apply for temporary continuation of coverage (TCC) (with FEHB-level benefits) for up to 36 months. In either cases, the child will have to pay the full cost and, with TCC, an additional 2 percent for administrative expenses.
FEGLI—If you are covered by Federal Employee Group Life Insurance (FEGLI), the proceeds generally go to the surviving spouse. However, if there is no surviving spouse, they usually go to the designated beneficiary or, if there is none, to the children, who are next in the next in line under what’s called the standard order of precedence. Under that order, the money goes to:
Your window or widower;
Your child or children in equal shares with the share of any deceased child being distributed among the child’s descendents, if any;
Your parents in equal shares or the entire amount to the surviving parent;
Your duly appointed executor or administrator of your estate;
Your next of kin under the laws of the state you lived in at the time of your death.
Note: This sequence is mooted if a court has issued a decree of divorce, annulment or legal separation that calls for the benefits to be paid to someone else.