Q: I went to a Civil Service Retirement System seminar recently and an interesting question about retirement calculation came out during your Q-and-A: What I fail to follow was the first two options (of three) you mentioned regarding the basic life insurance choices.
First, if I opted to keep my basic life insurance at its current level, would that mean that the insurance’s face value would remain the same for me as when I was employed through the rest of my retirement years? I would then assume that I will still continue to pay the same premium on basic life insurance for the rest of my life, as well through my retirement years.
Second, at 50 percent face value, would my premium also decline until the face value reaches 50 percent? Would I then pay that premium for the rest of my retirement years?
A: Not quite. If you elect to maintain your basic insurance at the level it was at on the day you retired, you would pay $2.155 per month for every $1,000 of coverage until you reached age 65. After that, you would pay $1.83 per month for every $1,000 of coverage. If you choose the 50 percent reduction, you’d pay $0.925 per month per $1,000 until age 65 and $0.60 per month per $1,000 after that.