CSRS: Insurable Interest Election and Annuity Reduction
If you are in good health and you retire for reasons other than disability, you
may elect to provide a survivor annuity to someone with an insurable interest.
You can elect to provide an insurable interest benefit and the maximum
benefit for a spouse or an ex-spouse. Spousal consent is not required. However,
if you are married and elect an insurable interest benefit for your spouse,
spousal consent is required.
If you elect an insurable interest benefit, you are responsible for arranging
for and paying the cost of any medical examination required to show you are in
good health. A report of the medical examination should be included with your
retirement application.
You can elect to provide an insurable interest annuity only for someone who
has an insurable interest in you.
"Insurable interest" is an insurance term which applies to someone who would
reasonably expect to derive financial benefit from your continued life. For
survivor benefit election purposes, an insurable interest is presumed to exist
if you name as beneficiary of the insurable interest, any of the following
individuals:
-
a spouse;
-
a blood or adopted relative closer than first cousins;
-
an ex-spouse;
-
a person to whom you are engaged to be married; or
-
a person with whom you are living in a relationship that would constitute a
common-law marriage in a jurisdiction that recognizes common-law
marriages.
If the person named is not one of the above, you should submit affidavits
with your retirement application from one or more people with knowledge of the
individual's insurable interest. The affidavits should state:
-
the relationship between you;
-
the extent to which the person named is dependent on you;
-
the reasons why the person named might reasonably expect to derive financial
benefit from your continued life.
The reduction to provide an insurable interest benefit is computed as
follows:
|
Age of Individual Named As
Insurable Interest Annuitant |
Reduction in Annuity |
| Older, same age, or less than 5 years
younger |
10% |
| 5 but less than 10 years younger |
15% |
| 10 but less than 15 years younger |
20% |
| 15 but less than 20 years younger |
25% |
| 20 but less than 25 years younger |
30% |
| 25 but less than 30 years younger |
35% |
| 30 or more years younger |
40% |
Source: OPM Retirement FAQ
| 
Overview - CSRS
