Termination and Conversion
DIFFERENCE BETWEEN CANCELLATION AND TERMINATION
Coverage Stops
With both cancellation and termination, your FEGLI coverage stops.
Cancellation
Cancellation of coverage is a voluntary action. With cancellation you do not get a 31-day extension of coverage or a right to convert. Cancellation also affects your ability to continue coverage into retirement.
Cancellation takes place in one of two ways:
- By making a written request. If you are an employee, you complete a Life Insurance Election (SF 2817) canceling some or all of your coverage and submit it to your agency employing office. If you are an annuitant or a compensationer, you send a letter to OPM, requesting that some or all of your coverage be cancelled; or
- You are on direct pay, and you do not pay your premiums
Termination
Termination of coverage is an involuntary action. With termination you get a 31-day extension of coverage and a right to convert. Termination does not affect your eligibility to continue coverage into retirement.
Exception: If the annuity or compensation of an insured individual is terminated, or if the Department of Labor finds that an insured compensationer is able to return to duty, his/her FEGLI coverage held as an annuitant or compensationer stops on the date of the termination or finding. There is no 31-day extension of coverage or conversion right.
TERMINATION OF EMPLOYEES' BASIC INSURANCE
Separation from Service
Your Basic insurance terminates (stops) at the end of the day on which you separate from service.
Exceptions:
- If you transfer to a FEGLI eligible position in another agency with no break in service, your insurance continues
- If you separate for retirement, you may be eligible to continue your coverage
- If you separate from service to enter the military, you are considered to be in a nonpay status for FEGLI purposes. As long as you have reemployment rights under USERRA (The Uniformed Services Employment and Reemployment Rights Act of 1994), you can keep your FEGLI coverage for up to 24 months in nonpay status, or until 90 days after your military service ends, whichever date comes first. Coverage is free for the first 12 months however, employees must pay both the employee and agency contributions of premiums for their Basic coverage and continue to pay the entire cost (there is no agency share) for any Optional insurance they may have for the additional 12 months of coverage. If you wish to continue coverage after the first 12 months in nonpay status you must to elect to do so in a manner designated by your agency. At the end of 12 months (or 90 days after the military service ends, whichever gives you more time), the coverage terminates unless you elect to continue it for the additional 12 months
- If you were employed by the Department of Defense in support of the Civilian Marksmanship Program the day before the Program was transferred to a private corporation, and you accepted employment by this corporation as part of the transition, your FEGLI continued unless you opted out of Federal benefits. You may continue your FEGLI coverage as long as you remain employed by the corporation
Nonpay Status
Your Basic insurance stops at the end of the day on which you complete 12 months in nonpay status.
Exceptions:
- If you are in nonpay status while receiving workers' compensation, you may be eligible to continue your coverage
- If you are in one of the special nonpay situations, you may be eligible to continue your coverage beyond 12 months
- If you are active duty military and you elected to continue insurance for an additional 12 months
Insufficient Pay
If your pay is insufficient to make any premium withholdings, and you do not elect to make direct payments, your coverage terminates at the end of the pay period in which the last premium withholding was made.
Move to an Excluded Position
Your Basic insurance stops at the end of the day before the day on which you move to a position in which eligibility for life insurance is excluded. See "Employees Excluded from Coverage" for exceptions.
TERMINATION OF EMPLOYEES' OPTIONAL INSURANCE
Relation to Basic Insurance
Your Optional insurance stops when your Basic insurance stops.
Retirement and Compensation
If you are eligible to continue Basic insurance as an annuitant or compensationer, but not some or all of your Optional insurance, the Optional insurance you are not eligible to continue into retirement or compensation stops at the end of the day before Basic insurance is continued into retirement or compensation.
Insufficient Pay
If your pay is insufficient to make premium withholdings for your Optional insurance, and you do not elect to make direct payments for your FEGLI premiums, your Optional insurance terminates at the end of the pay period in which the last premium withholding was made.
If your pay is sufficient for some of the withholdings, but not all, your employing office will terminate coverage in the following order:
- The multiples of Option C; then
- Option A; then
- The multiples of Option B
CONCURRENT EMPLOYMENT
Your FEGLI terminates if:
- You are serving in more than one position; and
- One of the positions is an excluded position; and
- You complete 12 months in nonpay status in the FEGLI eligible position
Your FEGLI continues if you complete 12 months in nonpay status in the excluded position. At the end of 12 months, your coverage will be based on the salary in the FEGLI eligible position.
Your FEGLI continues if you separate from the FEGLI eligible position. Your coverage will be based on the salary in the excluded position.
31-DAY EXTENSION OF COVERAGE
When your life insurance stops, except by waiver or cancellation, your coverage automatically continues for an additional 31 days after the termination date. No premiums or Government contributions are required during the 31-day extension. This extension does not include accidental death and dismemberment coverage.
There is no extension of coverage during the following situations:
- When you waive or cancel your insurance.
- When your annuity or compensation is terminated and your FEGLI stops.
- When a family member loses his/her eligibility under
- Option C.
- There is no extension beyond 31 days
CONVERSION OF INSURANCE
Conversion Privilege
When your group life insurance terminates, you are entitled to convert your coverage to an individual policy. Exception: If you return to Federal service in a FEGLI eligible position within three calendar days after the date your insurance stops, your coverage will continue and you are eligible to convert.
There is no conversion privilege if you cancel your coverage.
There is no conversion privilege when your annuity or compensation is terminated and your FEGLI stops.
If you have assigned your insurance, it is the assignee(s), rather than you, who is entitled to convert your Basic, Option A, and Option B coverage. You still are entitled to convert your Option C coverage since Option C cannot be assigned.
Individual Policy
Under the conversion privilege, you may convert all or any part of your Basic and Optional insurance to an individual policy. No medical examination is required, although you may be asked a few questions about your health to see if you qualify for a lower premium. You do not have to answer these questions, but if you do not, you may be paying a higher premium than necessary.
The individual policy will be issued by an insurance company you (or your assignee(s), if applicable) select from the list of approved companies that have been accepted by OPM as eligible and that has 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.
Note: For Option C, the conversion policies are for individuals only. The conversion policies do not include "family" policies similar to the FEGLI Program's Option C. If you convert your Option C coverage, you will be purchasing an individual policy for each family member whose coverage you choose to convert. You can only obtain a conversion policy for family members who exist on the effective date of the conversion policy - 32 days after the terminating event. A conversion policy cannot be issued for a family member added after that date.
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.
Process
When your insurance terminates, your employing office must give you a Notice of Conversion Privilege (SF 2819). If you wish to convert your coverage, you must send the SF 2819 to Office of Federal Employees' Group Life Insurance (OFEGLI) within the 31-day time limit for converting.
Your agency must also give you an Agency Certification of Insurance Status (SF 2821). Send that form to OFEGLI along with the SF 2819. If you do not have the SF 2821, do not delay in sending the SF 2819. Go ahead and send the SF 2819. You should request a completed SF 2821 from your agency before the expiration of the 31 day time limit and forward it to OFEGLI. OFEGLI needs the SF 2821 to calculate the amount of insurance you can convert.
Once OFEGLI has received your SF 2819 and SF 2821, it will send you a list of insurance companies that are offering conversion policies in your area. You must contact the companies to get information on the conversion policy and the cost.
Notes:
- The address on the SF 2819 is not current. The correct address is: OFEGLI, P.O. Box 2627, Jersey City, NJ 07303-2627
- In Block #4, your agency should indicate the multiples of Option C coverage you have the day insurance terminates
- If you receive an SF 2819, that means that you are eligible to convert your insurance, but you don't need to - the choice is yours. IF you qualify to carry your coverage into retirement, you may want to do that and not convert. Just because you receive an SF 2819 does not mean that you do not qualify to carry your coverage into retirement. All employees whose current coverage as an employee is terminating (other than by voluntary cancellation) receive a copy of that form - whether or not they qualify to carry coverage into retirement
- If you have assigned your insurance, your agency must give the SF 2819 to your assignee(s). The right to convert transfers to your assignee(s). If you have Option C, your agency must also give an SF 2819 to you. The right to convert Option C stays with you
You can find additional information on converting your insurance on the SF 2819.
CONVERSION FOR FAMILY MEMBERS
Upon Your Death
When you die, your family members covered under Option C are eligible to convert their coverage to individual policies.
The conversion policies do not include "family" policies similar to the FEGLI Program's
Option C. Each eligible family member may convert to an individual policy. In the case of a minor child, a parent may apply on the child's behalf for an individual policy.
Your employing office must send your family members a Notice of Conversion Privilege
(SF 2819). In Block #4, your agency should indicate the multiples of Option C coverage you have the day insurance terminates. Your employing office must send the SF 2819 to your last address on file, addressed to "The Family Members of . . . ." The employing office does not have to try to locate family members who might not have lived with you at the time of your death.
Family members wishing to convert must send the SF 2819 to OFEGLI within the 31-day time limit for converting.
Upon Your Separation
When you separate from service, you may convert any or all of your FEGLI coverage. If you choose not to convert your Option C coverage, your family members may convert their coverage to individual policies.
The conversion policies do not include "family" policies similar to the FEGLI Program's Option C. Each eligible family member may convert to an individual policy. In the case of a minor child, a parent may apply on the child's behalf for an individual policy.
If your family members are interested in converting their coverage, they must contact your former agency employing office. Your employing office must send your family members a Notice of Conversion Privilege (SF 2819) if they request information about converting. Your family members must then send the SF 2819 to OFEGLI within the 31-day time limit for converting.
Amount Available to Convert
Your spouse and eligible children may convert up to the amount of Option C coverage you carried (maximum $25,000 for your spouse and $12,500 for each eligible child).
When Conversion Is Not Permitted
Family members do not have the right to convert their coverage when they lose eligibility for any reason, such as the following:
- Your divorce or annulment
- Your child reaches age 22
- Your child marries; or
- Your stepchild or foster child moves out of your home
When You Have Assigned Your Insurance
The right to convert Option C remains with you and your family members, even if the rest of your insurance has been assigned.
EMPLOYING OFFICE RESPONSIBILITIES
Notice of Conversion Privilege (SF 2819)
Your employing office must give you (or your assignee(s)) an SF 2819 whenever your coverage terminates. In Block #4, your agency should indicate the multiples of Option C coverage you have the day insurance terminates. Exception: If you are transferring to a FEGLI eligible position in another agency within three calendar days after your termination, your employing office does not need to issue an SF 2819.
Your employing office must record in your Official Personnel Folder (or its equivalent) the names and addresses of everyone who is given an SF 2819, including your assignees and family members covered under Option C. Your employing office must send this information to your retirement system, if your separation is for retirement.
Your employing office must not furnish insurance companies with the name of any employee being separated with possible conversion rights.
If you have Option C coverage, your employing office must send an SF 2819 to your eligible family members when you die. The form should be addressed to "The Family Members of . . . ."
If you separate from service and choose not to convert your Option C coverage, your employing office must send an SF 2819 to your eligible family members if they contact the employing office to request information on converting.
Agency Certification of Insurance Status (SF 2821)
Whenever your insurance terminates, your employing office must complete an Agency Certification of Insurance Status (SF 2821) and give it to you (or your assignee(s)).
In block #13a on the SF 2821, your agency should indicate the multiples of Option C coverage you have on the day insurance terminates. Exception: If you are transferring to a FEGLI eligible position in another agency within three calendar days after your termination, your employing office does not need to complete an SF 2821.
Timing
Your employing office must give you (or your assignee(s)) the Notice of Conversion Privilege (SF 2819) either immediately before or immediately after the event causing your coverage to terminate. Note: This form must be given to you when you are retiring, even if you choose to continue life insurance coverage into retirement. (See "Procedures for Retiring Employees.")
Your employing office must place a copy of the SF 2819 in your Official Personnel Folder (or its equivalent) as proof that the required notice was provided. The date the SF 2819 is issued is also required for completion of Block 9 on the SF 2821.
TIME LIMIT ON CONVERSION
Time Limit for Converting
If you are interested in converting, you must complete Part C of the Notice of Conversion Privilege (SF 2819) and send it to OFEGLI at P.O. Box 2627, Jersey City, NJ 07303-2627. (Note: This address is different from the address on the SF 2819.) Your SF 2819 must be postmarked within 31 days after the date of the terminating event or within 31 days of your (or your family member(s), in the case of Option C) receipt of the Notice of Conversion Privilege (SF 2819), whichever is later.
Belated Conversions
If your employing office fails to give you the required conversion notice on time or you are unable to request conversion on time for reasons beyond your control, you can request a belated conversion by writing to OFEGLI at P.O. Box 2627, Jersey City, NJ 07303-2627.
You must mail the request to OFEGLI within six months after the date you first became eligible to convert. The request must show that:
- You were not notified of the loss of coverage and the right to convert and were not otherwise aware of it; or
- You were not able to convert on a timely basis because of reasons beyond your control
If six months or more have passed since the date you first became eligible to convert, OFEGLI cannot accept a request for conversion.
Effective Date of Conversion Policy
Your conversion policy is effective at the end of your 31-day extension of coverage. If this is retroactive, you must pay premiums back to that date.
Example
Zelda resigned. Her last day of Federal service was 6/16/06. Her FEGLI terminates that day, with a 31-day extension of coverage through 7/17/06. Zelda's agency did not give her the
SF 2819 until 10/13/06. Zelda has the right to convert her insurance to a private policy. She must send the SF 2819 to OFEGLI with a postmark within 31 days of the date she received it. If she converts, her conversion policy will be effective 7/18/06, at the end of her 31-day extension of coverage. She will have to pay premiums back to that date.
Belated conversions are made retroactive to the end of the 31-day extension, and you must pay the retroactive premiums. There are no exceptions to the requirement to pay retroactive premiums.
Your family members' conversion is effective at the end of your 31-day extension of coverage. If this is retroactive, they must pay premiums back to that date.
If You Return to Federal Service
If you have converted your FEGLI coverage and return to Federal service (including as a reemployed annuitant), you do not have to cancel your conversion policy, although certainly you can if you wish.
TERMINATION OF ANNUITANTS' AND COMPENSATIONERS' INSURANCE
Annuitants
If your annuity terminates, your FEGLI terminates on the same date. You do not get the 31-day extension of coverage or right to convert.
Compensationers
If the Department of Labor finds that you are able to return to duty, your FEGLI terminates on the date of the finding. You do not get the 31-day extension of coverage or right to convert.
If you return to service in a FEGLI eligible position, you will get FEGLI again as an employee and your FEGLI with the Department of Labor stops. Your FEGLI coverage will be based on the salary in your current position. If you return to a part-time position at the agency, your FEGLI will be based on the part-time salary.
HISTORICAL INFORMATION
Active Duty Military Service
By law, from August 1956 until June 1986 FEGLI terminated whenever an employee entered on active military duty.
Portability
From April 1999 until April 2002 employees with Option B whose group coverage terminated due to separation or completion of 12 months in nonpay status could elect to port (continue) their coverage by making direct premium payments to a Portability Office. This was a 3-year demonstration project. When the project ended, those with ported Option B coverage were given the opportunity to convert their coverage.
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