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The amount of your Basic life insurance (formerly known as "Regular insurance") is determined by (1) your annual rate of basic pay in effect when you separated for retirement or (2) the annual rate of basic pay in effect at the expiration of 12 months in non-pay status, if this occurred before you separated.
Generally, the annual basic pay rate (if not an even thousand) is rounded to the next higher thousand, plus $2,000 to arrive at the basic insurance amount, or face value, of your Basic life insurance. For example, if your basic pay at separation was $27,500, your Basic life insurance amount at retirement is $30,000. Also, if you die before age 45, the amount of your Basic life insurance is increased by a multiplication factor based on your age. This extra benefit is not included in the face value of your Basic life insurance.
Note: Accidental death and dismemberment insurance stops at retirement.
Items 1, 2, and 3 below discuss how to determine the cost of Basic life insurance and the amount, if any, by which your coverage will reduce after you reach age 65.
Example: If you are under age 65 and separate for retirement after December 31, 1989, and you:
- have Basic life insurance of $29,000 and
- elect the 50% Reduction, your monthly premium for continuing Basic life insurance into retirement is $9.43 (29 x $0.3250) and the monthly premium for electing the 50% Reduction is $17.40 (29 x $0.60). We will withhold the $9.43 premium for continuing your Basic life insurance into retirement through the end of the month in which you are 65. However, we will withhold premiums for the 50% Reduction (or No Reduction, if elected) from your annuity as long as you live, unless you cancel your election.
If you elected 50% or No Reduction, you can cancel that election at any time, unless you have assigned your insurance. If you cancel your election, your Basic life insurance will be subject to 75% Reduction.
The amount of your insurance will be the same as though you had elected 75% Reduction when you retired. Note that you cannot change your election from No Reduction to 50% Reduction. If you cancel your election, you will not be entitled to a refund of the premiums we have withheld from your annuity. A cancellation will be effective the end of the month in which we receive your request. For example, if we receive your request to cancel your 50% Reduction in Basic life insurance in May, the cancellation will be effective June 1 and the payment you receive on July 1 (covering your annuity and insurance premiums for the month of June) will be the first payment without a withholding for the 50% Reduction.
The following chart shows the cost of Basic life insurance and the various reductions for persons who retired after December 31, 1989:
Election | Monthly Cost per $1,000 of Basic Life insurance | |
---|---|---|
Until the Month after your 65th Birthday | Starting the Month after your 65th Birthday | |
75% Reduction | $ 0.325 | Free |
50% Reduction | $ 0.925 | $ 0.60 |
No Reduction | $2.155 | $1.83 |
These rates were effective on the first pay period that started on or after January 1, 2003. They are subject to change. |
Page updated February 20, 2003