Opm Life Insurance: Can It Be Sold?

The Federal Employees' Group Life Insurance (FEGLI) Program is the largest group life insurance program in the world, covering over 4 million federal employees, retirees, and their family members. While most federal employees are eligible for FEGLI coverage, it is unclear whether or not this insurance can be sold. However, according to the OPM website, FEGLI enrollees can assign ownership of their life insurance coverage to another person, firm, or trust.

OPM life insurance coverage after retirement

OPM life insurance coverage, also known as the Federal Employees' Group Life Insurance (FEGLI) Program, is the largest group life insurance program in the world, covering over 4 million federal employees, retirees, and their family members. Here is some detailed information about OPM life insurance coverage after retirement:

Keeping Your OPM Life Insurance Coverage After Retirement:

You can keep your existing basic life insurance coverage after retirement if you meet the following conditions:

• You are enrolled in basic life insurance under FEGLI when you retire.
• You haven't converted your life insurance coverage to an individual policy.
• You had life insurance coverage for the 5 years immediately preceding retirement or for the full periods when coverage was available.
• Your annuity payments start within 30 days.

Keeping Your Optional Life Insurance Coverage:

You can also keep your optional life insurance benefits after retirement if you meet certain conditions:

• You are eligible to continue your basic coverage.
• You had optional life insurance for the 5 years immediately before retirement or for the full periods of federal service when coverage was available.

Changing or Cancelling Your Coverage:

You can cancel or decrease your life insurance coverage at any time after retirement, but you cannot increase it. Any reduction or cancellation of coverage after retirement is permanent.

Premiums for Annuitants:

The FEGLI Basic insurance premium is a level rate per $1,000 of coverage, which means the premium rate is the same for each enrollee in the group policy, regardless of age or health status. This level premium feature makes the enrollee cost more predictable. The cost of the post-65 benefit is included in the FEGLI Basic level premium, so younger enrollees' premiums help cover the cost of coverage for retirees at no extra cost.

Designating Beneficiaries:

To ensure your life insurance benefits are paid out to your designated beneficiaries, you may need to complete a Designation of Beneficiary (SF-2823) form if you wish to override the statutory order of precedence as explained in FEGLI law (5 U.S.C. 8705). If you are satisfied with the statutory order, you do not need to complete this form.

Eligibility requirements for continuing coverage

To be eligible to continue your basic life insurance coverage after retirement, you must meet all of the following conditions:

• You are enrolled in basic life insurance under the Federal Employees' Group Life Insurance (FEGLI) program when you retire.
• You have not converted your life insurance coverage to an individual policy.
• You had life insurance coverage for the 5 years immediately preceding retirement or for the full periods of federal service when coverage was available (if the coverage was for less than 5 years).
• Your annuity payments start within 30 days.

If you are retiring under the Minimum Retirement Age (MRA) plus 10 provision of FERS, your health care and life insurance coverage will be suspended until your annuity starts, even if it is postponed.

To be eligible to continue your optional life insurance benefits after retirement, you must meet the above conditions and:

You had optional life insurance for the 5 years immediately preceding retirement or for the full periods of federal service when coverage was available (if the coverage was for less than 5 years).

Assigning ownership of OPM life insurance

The Federal Employees' Group Life Insurance (FEGLI) Program is the largest group life insurance program in the world, covering over 4 million federal employees, retirees, and their family members. Basic life insurance coverage is included for most employees, with the option to add additional coverage.

To assign ownership of your FEGLI insurance to another individual, trustee, or corporation, you must fill out a specific form. This form can be requested from your servicing Human Resources Office, or by calling 1-888-767-6738 (or 202-606-0500 in the DC area). You can also request a copy by emailing [email protected] and providing your mailing address. Additionally, you can request a copy from a local Federal agency Human Resources Office.

It is important to note that this form permanently transfers ownership of your FEGLI insurance and cannot be changed later. The premiums will continue to be withheld from your salary or annuity. If you only wish to designate a beneficiary to receive your life insurance, you should use the beneficiary designation form instead.

Beneficiary designation

The FEGLI program pays life insurance benefits according to a statutory order of precedence. First, benefits are paid to the designated beneficiary. If there is no designated beneficiary, benefits are paid to the surviving spouse. If there is no spouse, benefits are paid to the children and descendants of deceased children. Fourth, benefits are paid to any surviving parents, followed by the appointed executor or administrator of the estate, and finally, the next of kin as determined by the state.

There are exceptions to this order if the insurance coverage has been assigned to someone else, or if there is a court order specifying a different order. To change or update your beneficiary's address, you can complete a new Designation of Beneficiary (SF-2823) form and send it to the provided address.

Converting to an individual policy

If you are not eligible to continue your OPM life insurance coverage into retirement, you will be given the opportunity to convert to an individual policy. This is also the case if your FEGLI group life insurance terminates.

To convert your coverage to an individual policy, you must send the SF 2819 Notice of Conversion Privilege form to the Office of Federal Employees' Group Life Insurance (OFEGLI) within 31 days of your insurance stopping. Your agency must also give you an Agency Certification of Insurance Status (SF 2821) form, which you should also send to OFEGLI, along with the SF 2819. If you do not have the SF 2821, do not delay in sending the SF 2819—you can request the SF 2821 from your agency and forward it to OFEGLI before the 31-day time limit expires. OFEGLI will use the SF 2821 to calculate the amount of insurance you can convert. Once OFEGLI has received both forms, they will send you a list of insurance companies offering conversion policies in your area. You must then contact the companies to get information on the conversion policy and the cost.

The individual policy will be issued by an insurance company you select from the list of approved companies that have been accepted by OPM as eligible and that have agreed to issue such policies under the provisions of the FEGLI contract. The individual policy may be for any type of life insurance customarily issued by the insurance company you select, except term insurance, universal life insurance, or any other type of life insurance with an indeterminate premium. It cannot include disability or Accidental Death & Dismemberment benefits.

Any insurance policy purchased under the conversion privilege is a private business transaction between you and the insurance company. The cost of the individual policy is determined by the insurance company and is based on your age and class of risk. Since you will no longer be part of the group contract, the premium payments may be much higher than the FEGLI premiums.

OPM life insurance premiums

The FEGLI Basic insurance premium is a level rate per one thousand dollars of coverage, and the enrollee premium rates remain equal throughout the coverage period. This means that the premium does not change as the enrollee ages, although the rate structure is subject to periodic adjustments based on claims experience. The Basic insurance premium is shared between the employee and the government, with the employee paying 2/3 of the total cost and the government paying the remaining 1/3.

In addition to Basic insurance, there are three forms of Optional insurance available under FEGLI: Option A-Standard, Option B-Additional, and Option C-Family. Unlike Basic insurance, enrollment in Optional insurance is not automatic, and employees must take action to elect these options. The cost of Optional insurance depends on the employee's age, and the employee pays the full cost.

The FEGLI Calculator is a tool that can help enrollees determine the face value of various combinations of FEGLI coverage, calculate premiums for different coverage options, and see how choosing different options can change the amount of life insurance and the premium withholdings.

Frequently asked questions