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

Pamphlet RI 76-12

General Information About FEGLI (Continued)

Basic Life Insurance

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.

1. If you separated for retirement before December 9, 1980, your Basic life insurance will begin to reduce by 2% of the face value each month beginning with the second month after the date you are 65 or the second month after you retire, whichever is later.  This reduction continues until your Basic life insurance reaches 25% of the face value. This is a 75% reduction. For example, if, after you are retired, your 65th birthday occurred in October 1995, your life insurance remained at the full face value through November 30, 1995. The insurance began to reduce by 2 % of the face value per month effective December 1, 1995; by another 2% on January 1, 1996; and so on until January 1, 1999, when your life insurance reached 25% of the face value.  This coverage is free.
   
2. If you separated for retirement on or after December 9, 1980, and before January 1, 1990, you elected one of the following reduction schedules for your Basic life insurance:
   
   1. 75% Reduction - If you elected this reduction schedule, your Basic life insurance will begin to reduce by 2% of the face value each month beginning with the second month after the date you are 65 or the second month after you retire, whichever is later.  This reduction continues until your Basic life insurance reaches 25% of the face value, as explained above for pre-December 9, 1980, retirees. This coverage is free.
      
   2. 50% Reduction - If you elected this reduction schedule, your Basic life insurance will begin to reduce by 1% of the face value each month beginning with the second month after the date you are 65 or the second month after you retire, whichever is later.  This reduction continues until your Basic life insurance reaches 50% of the face value. We withhold premiums for this coverage after age 65 (or retirement, if later) from your annuity beginning at retirement and continuing for life. The monthly premium is $.60 per month per $1,000 of the full face value of the Basic life insurance in effect at retirement. These premiums are not reduced when the Basic life insurance amount begins to reduce (at age 65, or retirement, whichever occurs later).
      
   3. No Reduction - If you elected this reduction schedule, the full amount of your Basic life insurance remains in force after you reach age 65. We withhold premiums for this additional coverage from your annuity beginning at retirement and continuing for life.  The monthly premium is $1.83 per month per $1,000 of the full face value of the Basic life insurance in effect at retirement.
3. If you separate for retirement after December 31, 1989, you must elect one of the three reduction schedules described in Item 2 above when you retire.  Regardless of which reduction schedule you elect, if you separate before age 65, until you are 65 you must also pay the same premium as employees for the Basic life insurance you continue into retirement. The monthly premium is $0.325 for each $1,000 of the Basic life insurance in effect at retirement. This premium is in addition to the premium required if you elect either 50% or No Reduction as discussed in Item 2. See the example below. We will stop withholding the monthly premium for Basic life insurance (but will continue to withhold for the 50% or No Reduction schedule you elected) from your annuity the first of the month after you are 65.
    

Example: If you are under age 65 and separate for retirement after December 31, 1989, and you:

1. have Basic life insurance of $29,000 and
   
2. elect the 50% Reduction, your monthly premium for continuing Basic life insurance into retirement is $9.43 (29 x $0.325) 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:

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