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