Continuation of Life Insurance Coverage As an Annuitant or Compensationer

1. Basic Insurance
What is Basic insurance?
That is the coverage equal to your annual basic pay, rounded up to the
next $1,000, plus $2,000 (or a minimum of $10,000).
Will I have Basic insurance in retirement?
If you are eligible and want to carry Basic insurance in retirement, you
must mark "Yes" in Item 7. If you mark "No" in Item 7, you will not
have any insurance in retirement.
You cannot elect life insurance as an annuitant.
Who is eligible?
You are eligible to have Basic insurance in retirement if: (1) you retire
on an immediate annuity; (2) you were enrolled in Basic insurance for
the five years of service immediately before your annuity began or for all
opportunities during which it was available to you, if enrolled less than
five years; (3) you or the assignee(s), if applicable, do not cancel the
coverage; (4) you or the assignee(s) do not convert it to an individual
policy; and (5) you did not receive a full Living Benefit. See page 3 for
information on compensationers, assignments and Living Benefits.
How much Basic insurance will I have?
The amount of your Basic insurance will depend on your final annual
basic pay, your age, your choice of reduction in Item 8, and whether you
elected a Living Benefit. See page 3 for information on Living Benefits.
Your Basic insurance in retirement is equal to your final annual basic
pay, rounded up to the next $1,000, plus $2,000 (or a minimum of
$10,000). This amount continues until you reach age 65. If you are under
age 45, you have an Extra Benefit (see below). Your Basic insurance will
reduce after you retire and turn age 65, unless you elect No Reduction in
Item 8.
What if I don't want Basic insurance in retirement?
If you don't want to have Basic insurance in retirement and you have not
assigned your coverage, mark "No" in Item 7. Do not file a Life
Insurance Election (SF 2817). You will not have any life insurance in
retirement, but you will be insured for 31 days after your life insurance
coverage as an employee stops. You can convert to private coverage.
What is the Extra Benefit?
The Extra Benefit doubles the amount of Basic insurance payable if you
die at age 35 or younger. Beginning on your 36th birthday, the Extra
Benefit decreases by 10% each year. If you die at age 45 or older, there is
no Extra Benefit. You do not pay for the Extra Benefit.
Will I have accidental death and dismemberment
coverage in retirement?
No. Accidental death and dismemberment coverage stops when your life
insurance as an employee stops.
Will my Basic insurance reduce?
It depends. If you are eligible and choose to have Basic insurance in
retirement, you can choose either 75% Reduction, 50% Reduction or
No Reduction in Item 8.
What is 75% Reduction?
This means that your Basic insurance will reduce by a fixed
amount each month, equal to 2% of the amount of Basic insurance
you carried into retirement. Your Basic insurance will continue to
reduce until 25% of the original amount remains. You do not pay an
extra premium for this choice.


What is 50% Reduction?
This means that your Basic insurance will reduce by a fixed
amount each month, equal to 1% of the amount of Basic insurance
you carried into retirement. Your Basic insurance will continue to
reduce until 50% of the original amount remains. You pay an extra
premium for this choice.
What is No Reduction?
This means that your Basic insurance will not reduce. You pay an
extra premium for this choice.
When do reductions begin?
If you elect 75% Reduction or 50% Reduction in Item 8, your Basic
insurance begins to reduce on the first day of the second month after you
reach age 65 or on the first day of the second month after you retire,
whichever is later.
What do I pay?
As an annuitant, you will pay the same regular Basic premium, monthly,
that active employees pay, until you reach age 65. You probably paid a
biweekly premium as an employee. You stop paying the regular premium
on the first day of the month after you reach age 65. If you retire after
turning 65, you will never pay the regular premium in retirement. If you
choose 50% Reduction or No Reduction, you must pay an extra
premium. You continue to pay the extra premium for life or until you
cancel the coverage or change to 75% Reduction. See the Basic
Insurance table on page 4.
What if I want to change my reduction election?
You have 30 days from the date you receive your first regular monthly
annuity check to change your reduction election. Write to us and tell us
what you want to change. After that time, you or the assignee(s), if
applicable, may only change to 75% Reduction and not to 50%
Reduction or No Reduction. If you or the assignee(s), if applicable,
change to 75% Reduction, we will compute the amount of your Basic as
if you had originally elected 75% Reduction. Premiums will stop and you
will not receive a refund of premiums you already paid.

2. Optional Insurance

What is Optional insurance?
There are three types of Optional insurance. Option A (Standard) equals
$10,000. Option B (Additional) equals 1 to 5 multiples of your annual
basic pay, after rounding your pay up to the next $1,000. Option C
(Family) is 1 to 5 multiples of coverage for your spouse and eligible
children. Each Option C multiple equals $5,000 for your spouse and
$2,500 for each of your eligible children.
Will I have Optional insurance in retirement?
If you are eligible and want to carry Option A and/or Option B and/or
Option C in retirement, you must mark "Yes" and sign for that coverage.
If you mark "No", you will not have that coverage in retirement.
You cannot elect life insurance as an annuitant.
Who is eligible?
You are eligible to have Optional insurance in retirement if:
(1) you continue your Basic insurance in retirement (employees who
received a full Living Benefit are exempt from this requirement), (2) you
were enrolled in the option for the five years of service immediately
before your annuity began or for all opportunities during which it was
available to you, if enrolled less than five years; (3) you or the
assignee(s), if applicable, do not convert it to an individual policy; and
(4) you or the assignees(s), if applicable, do not cancel it. See page 3 for
information on compensationers.
How much Option A will I have?
If you are eligible to have Option A in retirement and choose "Yes" in
Item 9, you will have $10,000 of Option A coverage.
How much Option B will I have?
If you are eligible to have Option B in retirement and choose "Yes" in
Item 10, your Option B will equal your annual basic pay at retirement,
rounded up to the next higher $1,000, multiplied by the lower of (1) the
number of multiples you are eligible to continue; or (2) the number of
multiples you elect to continue in Item 11.
How much Option C will I have?
If you are eligible to have Option C in retirement and choose "Yes" in
Item 13, your Option C will be the lower of (1) the number of multiples
you are eligible to continue; or (2) the number of multiples you elect to
continue in Item 14; multiplied by $5,000 (for your spouse) and $2,500
(for each of your eligible children).
How many multiples of Option B and/or Option C can I
have?
You may have up to the number of multiples you had during:
a. the 5 years of service immediately before your annuity began, or
all service during which those multiples were available to you, if
enrolled less than 5 years.
b.
What if I elect to have more multiples of Option B and/or
Option C than I'm eligible to have?
You will have whichever number is lower - the number you elect to
continue or the number you are eligible to continue.
What if I don't want Optional insurance in retirement?
If you don't want to have an option in retirement, and you have not
assigned your coverage, mark "No" in Item 9 for Option A, Item 10 for
Option B and/or Item 13 for Option C. Do not file a Life Insurance
Election (SF 2817). You will not have that option in retirement, but you
will have it for 31 days after your life insurance coverage as an employee
stops. You can convert to private coverage.
Will my Option A reduce?
Yes. You do not have a choice. Option A reduces on the first day of the
second month after you reach age 65 or the first day of the second month
after you retire, whichever is later. Each month the amount reduces by
another $200. Reductions stop when Option A reaches $2,500.
Will I have accidental death and dismemberment
coverage for Option A in retirement?
No, you will not. Accidental death and dismemberment coverage stops
when your life insurance as an employee stops.
SF 2818 Instructions (page 2 of 4)
Revised May 2001
What do I pay for Option A?
As an annuitant you will pay the same premium, monthly, that active
employees pay, based on your age. You probably paid a biweekly
premium as an employee.
Option A is free starting on the first day of the month after you reach age
65 or starting at retirement if you retire after turning age 65. See the
Optional Insurance table on page 4.
Will my Option B and/or Option C reduce?
It depends on what you choose now in Item 12 and Item 15, and what
you choose later when you receive the second election opportunity.

Will I receive a second election opportunity for
Option B and/or Option C?
Yes. We will send you a letter shortly before you turn age 65, or shortly
after you retire (if you retire after age 65). At that time, you can mix and
match multiples - you can choose to have some of your Option B and/or
Option C multiples reduce and have some not reduce. If you assigned
your life insurance, see page 3 for more information.
Can I change my mind before receiving the second
election opportunity?
Yes. You can write to us at any time before age 65 and change from
Full Reduction to No Reduction or vice versa (unless you assigned
your coverage, in which case only the assignee(s) can change to Full
Reduction). After reductions start, neither you nor the assignee(s), if
applicable, can change from Full Reduction to No Reduction.
What do I pay for Options B and C?
As an annuitant, you will pay the same premium, monthly, that active
employees pay, based on your age and the number of multiples you have
in retirement. You probably paid a biweekly premium as an employee.
For Full Reduction multiples, coverage is free to you starting on the first
day of the month after you reach age 65 or starting at retirement if you
retire after turning age 65. For No Reduction multiples, you will
continue to pay premiums for the rest of your life, or until you cancel
the insurance or change to Full Reduction.