Living Benefits
Effective July 25, 1995, you may elect to receive a lumpsum
payment (living benefits) if you are terminally ill and have a
documented medical prognosis that your life expectancy is 9
months or less. Eligible employees, annuitants and
compensationers may elect a full lump-sum payment equal to their
Basic Insurance Amount (BIA), plus the Extra Benefit, if any,
that would be in effect nine months after the date OFEGLI
receives a completed claim for living benefits form (see page 6
for more information on the Extra Benefit). For annuitants and
compensationers, the amount available to elect as a Living
Benefit will be reduced by any applicable post-65 reductions in
effect as of 9 months after the date OFEGLI receives a completed
claim for living benefits form.
Alternatively, eligible employees (but not annuitants or
compensationers) may elect a partial lump-sum payment equal to
only a portion of their BIA, plus any applicable Extra Benefit.
If a portion is elected, it must equal a mult ple of $1,000. Your
decision to receive living benefits cannot be withdrawn-it is
irrevocable. You cannot elect to receive the remainder of your
life insurance later on as a living benefit because you can only
elect living benefits once.
If you have assigned your FEGLI coverage (see page 14),
neither you nor the assignee(s) may elect living benefits.
Your living benefits payment (whether full or partial) will be
reduced by a nominal amount to make up for lost earnings of the
Life Insurance Fund because of the early payment of benefits. In
addition, you should consult your tax attorney about possible tax
consequences.
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If you choose the full lump-sum payment, no benefits for Basic
Life will be payable based on your death or dismemberment.
Premiums for Basic Life will stop.
If you choose the partial lump-sum payment (not available to
annuitants and compensationers), your BIA will be reduced by the
percentage which the partial lump-sum payment represents of your
full BIA (rounded up or down to the nearest multiple of $1,000
or, if midway between multiples, to the next higher multiple of
$1,000). Premiums for Basic Life will be reduced accordingly.
For example, if your salary is $23,678, then your BIA before you
elect living benefits is $26,000. Let's assume you are 36 years
old when you elect living benefits; therefore, your BIA plus the
Extra Benefit equals $49,400. Let's further assume you elect
$40,000 in living benefits. Your BIA after you elect living
benefits will be $5,000 ($40,000 is 81 percent of $49,400. Thus,
your BIA is reduced by 81 percent, and rounded.) ($26,000 reduced
by 81 percent equals $4,940 which is rounded to $5,000.) Premiums
for Basic Life will continue, but will be likewise prorated. Upon
your death, only $5,000 in Basic Life benefits will be payable
(adjusted, if applicable, by the Extra Benefit described on page
6).
Your election of living benefits has no effect on any
optional insurance you may have.
On or after July 25, 1995, you may contact OFEGLI at
1-800-OFE-GLIA (1-800-633-4542) for more information and to
obtain the form to elect living benefits (FE-8). This form is not
available from your employing office or your retirement system.