The "no reduction" option


Q: Can you define the “no reduction” option? My understanding of it is this: For example, take a basic life insurance policy, prior to retirement, worth $100,000. At retirement, I can choose to keep paying for $100,000 coverage up to age 65 with the “no reduction” option. Is that correct, or is the coverage amount based on your retirement annuity, which would be much less ($58,000)?

A: The “no reduction” option allows you to preserve the face value of your insurance on the day you retire. It has no connection to the amount of your annuity.


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Reg Jones was head of retirement and insurance policy at the Office of Personnel Management. Email your retirement-related questions to

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