Life insurance payments

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Q. How does life insurance pay when I retire? I don’t understand how it is reduced. If I keep the basic life insurance and die at 85, how much insurance will there be?

A. How much basic insurance there will be depends on the level of coverage you elect when you retire. Here are the choices:

No reduction: You retain the same amount of basic insurance you had when you retired. You continue to pay the premiums for the rest of your life.

50 percent reduction: Your coverage is reduced by 1 percent per month beginning at age 65 until it reaches half of the face value. You continue to pay the premiums for the lesser amount of coverage.

75 percent reduction: Your coverage is reduced by 2 percent per month until it reaches 25 percent of its face value. You continue to pay the premiums up to age 65; thereafter, no premiums are charged.

Because the premiums vary depending on the choice you make, you’ll need to check with your personnel office to learn which rates apply.

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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 fedexperts@federaltimes.com.

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