Q: I just submitted a request for a retirement estimate. I was confused about the reductions section in life insurance. The three selections were 75 percent, 50 percent or no reduction at all. What do the reductions mean? In my estimate request, I selected no reduction with Basic and Option B (times 1). What would be the difference, if I did select a 75 percent or 50 percent reduction?
A: In simple terms, the smaller the reduction in the face value of the coverage you elect, the higher your premiums will be. For example, if you elect the 75 percent reduction in your Basic insurance, until you reach age 65 you’d pay 32.5 cents for every $1,000 of coverage. With the 50 percent reduction you’d pay 92.5 cents per thousand. And with no reduction $$2.15+ per thousand. In the month after you reached age 65, the premiums would be zero, 60 cents or $1.83 per thousand. You can see the rates and more by going to OPM’s life insurance website at www.opm.gov/insure/retirees/index.asp?Answerld=49 and scrolling down to “Do my premiums change…”
