If you are terminally ill and have a documented medical prognosis of not living longer than 9 months, you may choose to receive a lump sum payment from FEGLI. However, policies are slightly different for current employees and retired employees.
Active employees can choose full living benefits of basic FEGLI insurance or partial benefits in multiples of $1,000. Pensioners can only choose a lump sum payment equal to the basic life insurance amount. Pensioners cannot choose to pay part of their living benefit. This option is only available to employees.
If you choose living benefits after retirement, basic life insurance will not be paid after you die. The Department of Human Resources will stop withholding basic life insurance premiums from monthly annuities. If you choose living benefits before retirement, the amount of basic life insurance that will be paid after your death and the premiums that the Human Resources Administration will deduct from your pension will depend on the amount of living benefits you received before retirement.
When you “transfer” life insurance coverage, neither you nor the transferee can choose living benefits.
Your choice of living benefit does not affect the amount of any life insurance you have. OPM will continue to withhold premiums for voluntary insurance.
You can obtain a form to elect Living Benefits (Form FE-8) by contacting the FEGLI administration office at 800-633-4542. This form is not available from human resources offices or retirement plans.
