U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

If you wish, you may assign your life insurance to one or more persons, firms, or trusts. Assignment means that you agree to give up ownership of your Basic, Option A and Option B life insurance coverage forever. You cannot cancel the assignment. The assignee becomes the beneficiary. If you assign your insurance, you must continue to pay any life insurance premiums. We will withhold the premiums from your annuity. However, if your annuity is too low to cover the cost of your life insurance, you or your assignee(s) may pay the premiums to us as described on page 4. You cannot assign Option C - Family insurance, because, by law, only you can be the beneficiary.

Only you can assign your life insurance. No one can do it on your behalf, and no one can force you to make an assignment. People generally assign insurance to comply with requirements of a court order for divorce, for personal financial planning purposes, or to satisfy a debt.

1. To comply with a court order - You may assign your life insurance in order to comply with a court order for divorce.

   Frequently, the court will order a Federal retiree to name a former spouse as the life insurance beneficiary. Assigning life insurance coverage to a former spouse provides a means for the retiree to assure the court that life insurance benefits will be payable to a former spouse or his or her designated beneficiary.

2. 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. Current Federal estate tax law allows an unlimited marital deduction for that portion of the gross estate passed to a surviving spouse. Thus, there is no apparent immediate tax advantage to assigning ownership of a life insurance policy to a spouse. However, since State tax laws vary and tax savings under Federal or State law can be considerable if insurance proceeds are not subject to estate taxes, it is important to rely on the advice of a competent estate tax advisor.

   The Office of Personnel Management assumes no responsibility or obligation with respect to the validity, sufficiency, or the consequences of an assignment under the Internal Revenue Code. A determination as to whether the life insurance proceeds are included in your gross estate must ultimately be made by the Internal Revenue Service (IRS) at the time of your death.

3. To obtain accelerated death benefits - You can assign your life insurance to a viatical settlement firm. You might wish to do this if you are terminally ill in order to obtain a portion of the value of your life insurance before your death.

4. To satisfy a debt - You can assign your life insurance to a person or corporation to satisfy a debt.

By assigning your life insurance, you give up the right to designate beneficiaries and to reduce the amount of insurance coverage (even if the cost is more than you can afford).

If you assign your life insurance to more than one person, you must specify the percentage shares for each person. You are not permitted to name contingent assignees in the event the primary assignee predeceases you.

An assignment cancels any designation of beneficiary you have made. After the assignment, only the assignee(s) may designate beneficiaries. Each assignee may designate anyone, including himself or herself, as the beneficiary of the portion of your life insurance the assignee owns. An assignee may designate a contingent beneficiary and may change the designation of beneficiary at any time. Each assignee is responsible for keeping us advised of his or her current address.

If the assignee does not designate a beneficiary, the assignee is the beneficiary and receives the benefits after your death.

An assignee may reassign his or her portion of the insurance coverage to individuals, firms, or trusts.

The assignee assumes all rights to cancel your life insurance. If there are two or more assignees, all of them must agree to any cancellation of your coverage.

The assignee has the same life insurance conversion rights as those described for annuitants on page 4 of this booklet, as long as the assignment was effective on or before the right to convert arose.

The assignee has the right to change your reduction schedule election to the maximum reduction. If there is more than one assignee, all of them must agree to change the election.

If you want to assign your life insurance, call, use the Internet, or write to us asking for an assignment form RI 76-10, Assignment of Federal Employees’ Group Life Insurance. The assignment will be effective on the date we receive the properly completed, signed, dated, and witnessed assignment form. Instructions for making an assignment are on the form.

If your life insurance coverage as an employee terminated and you are receiving benefits from the Department of Labor, Office of Workers’ Compensation Programs under conditions which allow you to continue life insurance as a compensationer, your coverage is subject to the same conditions as a retiree. However, if your life insurance coverage as an employee terminated before November 2, 1978, (because of separation or completion of 12 months non-pay status), the amount of your life insurance will not reduce when you reach age 65, as long as you are in receipt of compensation and are determined by the Department of Labor to be unable to return to duty.

You should be aware that if the Department of Labor determines that you are capable of returning to work (even if only part-time; even if they continue loss-of-wage-earning-capacity payments; even if you do not actually return to work), your life insurance coverage as a compensationer ends. You will not have the 31-day extension of coverage; you will not have a right to convert your life insurance to an individual policy. Of course, if you return to work in a Federal position eligible for life insurance coverage, you can again obtain life insurance.

If you are separated from your agency on an approved disability retirement which is suspended because you are in receipt of Workers’ Compensation and you are notified that you are capable of returning to work, you can waive Workers’ Compensation and elect retirement. To do this, contact us to discuss your situation and find out how much annuity we would pay you. Then you can decide whether to ask us to start payments to you. We need a copy of your letter to the Department of Labor stating the date that you waive Workers’ Compensation to receive payments from us. If you make this election, your life insurance will continue, and we will withhold the premiums from your monthly annuity.

The information about reemployment in the Federal service applies to reemployed Compensationers who have been approved for retirement.

We hope this pamphlet has helped you. If you have other questions about retirement and survivor benefits, you may call as described on page 1 or write to us at the following address:

U.S. Office of Personnel Management
Retirement Operations Center
P.O. Box 45
Boyers, PA 16017-0045

If you do write, please be sure to provide your civil service retirement claim number (CSA number) and date of birth to allow us to identify your records promptly.

Our Internet address is: http://www.opm.gov/retire

Address email to: retire@opm.gov

The pamphlets listed below offer information about their respective topics. If you wish to request one or more of these booklets, you may call or write to us at the address shown above.