Life events and your insurance
In the last three articles on life events, I have focused on marriage, children, and divorce. I’ll end this series by explaining what happens to your benefits if you die.
While this series focuses only on insurance, there are also important implications for survivor annuities and savings plan accounts that your survivors should be aware of, in order to put insurance considerations into their proper place. appropriate context.
If you were enrolled in the Self Plus One option when you died, the person who shared your enrollment could continue this coverage if they are eligible for a survivor pension. The same goes for all eligible survivors if you were enrolled in the Self and Family option.
Your survivors would be entitled to the same benefits and the same government share of contributions as any current employee or retiree enrolled in the same FEHB plan. Premiums for this coverage would be deducted from the survivor’s annuity unless the annuity is too small to cover the cost. If this is the case, your survivor may arrange to pay the premiums directly to the plan.
If you have elected to be covered by the Federal Employee Group Life Insurance Program and have completed a standard Form 2823, Beneficiary Designation, all FEGLI benefits will be paid to the persons you nominate. If you do not have a designation on file, your insurance proceeds will be distributed in the standard order of precedence:
• first, to a surviving spouse;
• secondly, failing this, to your child or children, with the share of any deceased child distributed among the descendants of this child, where applicable;
• third, if none of the above, to your parents equally or in full to the sole survivor;
• Fifth, if none of the above, to your next of kin as determined by the laws of the state where you lived.
If your spouse or an eligible family member was enrolled in the federal long-term care insurance program when you died, that enrollment may continue as long as the family member (s) pay the premiums. To note: The opportunity to enroll in the FLTC program for the first time would only be available to a family member receiving a survivor pension.
Any family member who was covered by your dental and vision insurance program membership can continue this coverage if they are eligible for a survivor pension. And anyone receiving a survivor’s pension can enroll in the program again if they wish.
If you can prove at least 18 months of service upon your death, your spouse will be entitled to a survivor’s pension. This annuity will be a percentage of the annuity to which you were entitled as an employee or which you received as an annuitant. For a CSRS spouse, the norm is 55 percent. For an IRON, it’s 50 percent.
However, if your spouse has accepted a lower pension amount (or none at all), this agreement will determine the amount of the pension. Note: While retiring CSRS employees can designate any annuity amount between $ 1 and the full amount, FERS retirees have only one option other than 50% –25%; in both cases, the written consent of the spouse is required.
If you are an FERS employee, your spouse would also be entitled to a basic death benefit, plus 50% of your last salary or your high-3, whichever is higher. This death benefit is currently just under $ 35,000; it is indexed to inflation every year.
Savings savings plan
Any money you have in your TSP account will be paid out according to the name (s) you designate on a Form TSP-3, Choice of Beneficiary. If you have not made such a designation, payment will follow the standard order of priority defined above.
If your surviving spouse is the beneficiary, they can keep the account open and benefit from the same management and withdrawal rights as you. If there are other beneficiaries, the account will have to be closed. They can do this either by withdrawing the money or by transferring it to an Individual Retirement Account (IRA) or other qualifying retirement savings plan.
2021 has a quirk in the calendar for choosing a Fed retirement date
Calculation of the service credit for sick leave at retirement
Benefits if you leave government before retirement eligibility
The most common questions about FEHB
The most common questions about the FERS retirement
FERS Retirement Guide 2021