When you retire, you are eligible to continue Basic insurance - or have it reinstated - if you meet all of the following requirements:

• you are entitled to retire on an immediate annuity (or under Section 8413 [Immediate Retirement under FERS] or 8414 [Early Retirement under FERS] of title 5, U.S. Code) under a retirement system for civilian employees;
• you have been insured for the 5 years of service immediately before the date your annuity starts, or for the full period(s) of service during which you were eligible to be insured if less than 5 years (called the "all opportunity" requirement); and
• you have not converted your life insurance coverage to an individual policy or if you have already converted the coverage, you cancel the converted policy.  To cancel the converted policy, contact the insurance company and ask to cancel the policy.  That company will send you a refund of any premiums you already paid for the converted policy.
  Breaks in Service

Breaks in service are not counted when determining the five years of service requirement.

Example 1:  Joan elected Basic insurance on February 11, 1990 and had a break in service from January 1, 1994 through January 1, 1996. Upon her return to service, she again elected Basic insurance. She retires on December 31, 1997. She is eligible to continue her insurance into retirement, since she has been continuously enrolled for the 5 years of service before retirement.

Example 2: Carlos waived Basic insurance coverage upon his employment. He left federal service in 1983. He was rehired in 1993, and elected Basic and Option A coverage. When he retired in 1996, he was not eligible to continue either Basic or Option A coverage since he was not insured for the five years of service before his retirement. He did not meet the "all opportunity" requirement due to his prior employment in which he waived coverage.

Immediate Annuity

An immediate annuity is one that begins within 30 days of separation for retirement.

An annuity you receive under the Minimum Retirement Age (MRA)+10 provision of FERS also qualifies as an immediate annuity, even though you separated from service and postponed receipt of your annuity.

Reinstatement of Insurance

Effective January 11, 1990, your insurance will be reinstated when you retire under the FERS Minimum Retirement Age (MRA) + 10 provision (as long as you are otherwise eligible to continue your enrollment).

Basic insurance stops at the end of the day on which you separate. You get the 31-day extension of coverage and your employing office must give you a Notice of Conversion Privilege (SF 2819) for conversion purposes.

If you later apply for retirement and are eligible to continue Basic insurance, the Office of Personnel Management will send you a notice of eligibility and a Continuation of Life Insurance Coverage form (SF 2818). If you wish to have other than 75% Reduction for Basic insurance, you must return the completed SF 2818 within 60 days after OPM mails the form. Basic insurance will be reinstated effective the date your annuity starts or the date OPM receives your application for annuity, whichever is later.

Amount of Basic Insurance

The amount of Basic insurance that you can continue as an annuitant or compensationer is your Basic Insurance Amount on the date of your separation or completion of 12 months nonpay status, whichever is earlier.

Election of Basic Insurance

If you are eligible, and choose to continue your insurance as an annuitant or compensationer, you must complete a Continuation of Life Insurance Coverage form (SF 2818). On this form, you elect if you want to continue your Basic life insurance into retirement or compensation and elect the amount of Basic insurance you want after age 65 (or retirement, if later). The choices are 75% Reduction, 50% Reduction, or No Reduction.

Exception: You must elect No Reduction if you previously elected partial living benefits.

How the Reduction Works

75% Reduction

The amount of Basic life insurance in force reduces by 2% of the original amount each month until the original amount has been reduced by 75%; only 25% of the Basic Insurance Amount is payable as a death benefit once the full reduction is reached.

50% Reduction

The amount of Basic life insurance in force reduces by 1% of the original amount each month until the original amount has been reduced by 50%; 50% of the Basic Insurance Amount is payable as a death benefit once the full reduction is reached.

No Reduction

There is no reduction in the amount of life insurance after your 65th birthday; 100% of the Basic Insurance Amount is payable as a death benefit.

When the Reduction Starts

The reduction starts at the beginning of the 2nd month after your 65th birthday or the beginning of the 2nd month after your retirement, whichever is later.

Example:  Henry retires on 9/30/96 with a Basic Insurance Amount of $60,000. He turns 65 on 3/15/97. 

If he elects 75% Reduction, the amount of Basic insurance in force reduces by $1,200 each month ($60,000 x 2%), starting 5/1/97. On 6/1/00, the full 75% reduction will have been reached, and 25% of the Basic Insurance Amount ($15,000) will be paid to his beneficiaries upon his death.

If he elects 50% Reduction, the amount of Basic insurance in force reduces by $600 each month ($60,000 x 1%), until 6/1/01, when the full 50% reduction will have been reached. Upon his death, $30,000 will be paid to his beneficiaries.

Change of Election

If you choose 75% Reduction, you cannot later change that election.

You can cancel the 50% Reduction or No Reduction election at any time (unless you previously elected a partial living benefits or assigned your insurance). You then automatically get 75% Reduction. This is the only change in election that is permitted. You can't change from No Reduction to 50% Reduction (nor can you change from 75% Reduction to 50% Reduction or No Reduction).

If you do cancel your 50% Reduction or No Reduction election, the amount of Basic insurance in force is computed as if you had elected 75% Reduction at the time of retirement. Premiums will be reduced to the amount appropriate for 75% Reduction; however, you cannot receive a refund of the higher premiums that you paid before the original election was cancelled.

Contact OPM's Retirement Operations Center at P.O. Box 45, Boyers, PA 16017-0045 or 1-88USOPMRET (1-888-767-6738) if you wish to change your election.

You must elect No Reduction at the time of retirement if you previously elected partial living benefits. You cannot later cancel that election.

See "Assignment" for information on the effect of an assignment on elections and changes of elections.

Default Election

If you don't make an election regarding the post-65 reduction, you will have the 75% Reduction.