The Federal Employees’ Group Life Insurance (FEGLI) Program covers over 4 million federal employees, retirees, and their family members. Consisting of basic life insurance coverage and three options, the cost is shared between the employee and the government. On rare occasions, FEGLI incontestability for overpayment is possible. This means you get to keep erroneous FEGLI coverage.
How FEGLI Incontestability Occurs
You might receive erroneous FEGLI coverage for a handful of reasons. First, your agency might have allowed you to elect coverage when you are not entitled to it. Or your Notification of Personnel Action (SF 50) code is incorrect and gave you more coverage than you elected. Additionally, your agency payroll office may have collected premiums for a coverage that you did not choose. Lastly, the U.S. Office of Personal Management (OPM) may have allowed you to continue your coverage after federal retirement or separation from federal employment when you have become an annuitant or compensationer.
Conditions for Erroneous Coverage
Even if you have the erroneous coverage as described in one of the above circumstances, you will still need to meet the following criteria for the coverage to be considered incontestable:
- Erroneous coverage must have been in effect for at least two years between the time it started and was discovered.
- You must have paid the required premiums for the erroneous coverage during this period.
If you have satisfied all the above criteria, then you will be entitled to erroneous coverage by law. You will not receive a refund of the FEGLI premiums paid on the erroneous part of the coverage. The exception to this no refund clause, however, is if you erroneously paid premiums for Option C coverage for family members that were not eligible. You may then cancel this coverage and obtain a full refund of the premiums paid for Option C coverage.
FEGLI coverage can be complex and nuanced. At Federal Educators, we can help you better understand your federal retirement benefits and make a plan that best supports you. Give us a call and request your free analysis at 866-226-8160.
