Insurable interest annuity


Q: I’m planning to retire from the U.S. Postal Service in June, with 40 years of service under my belt. My questions are: First, over the years in my service, I had surgeries and a heart attack. A lot of the time that I used was leave without pay. The leave sharing program was not installed at the time I was out. Do I have to pay back or work off the hours that I used many years ago when I was sick? Second question is: I am a single parent and grandmother. I have no spouse or friend that I can put their name down as a beneficiary. The only person is my daughter, grandkids, sister, nieces and nephews. Can I put my daughter’s name on the required paper as an annuitant? If anything happens to me after I retire, I would like for her to get my retirement pay. I worked hard for it and I don’t want it going back to the post office as unclaimed income.

A: While you cannot name your daughter to receive a survivor annuity, you could elect to provide her with what is known as an insurable interest annuity, but only if you are in good health when you retire. If you make that election, your annuity would be reduced by a percentage amount that depends on the difference in your age and the person you named. Alternatively, you could name her as your beneficiary. Then, if you died before all the money you contributed to the retirement fund had been returned to you in monthly annuity payments, she would receive the balance in a lump sum.

— Reg Jones


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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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