538 Beneficiaries, Benefits Payable, Claims

538.1 Beneficiaries

538.11 No Named Beneficiary
538.111 Order of Precedence

In the absence of SF 2823 or SF 54, insurance benefits payable upon the death of an insured employee or retired employee are paid to the survivors in the following order of precedence:

  1. Widow or widower.
  2. Child or children in equal shares with the share of any deceased child distributed in equal shares among the descendants of that child.
  3. Parents in equal shares, or the entire amount to the surviving parent.
  4. Executor or administrator of the estate.
  5. Next of kin as determined under the laws of the state in which the insured was domiciled.
538.112 Option C — Family

Option C — Family insurance in force on a spouse or child on the date of the family member’s death will be paid to the employee or former employee whose pay, annuity, or compensation is subject to the withholding for Option C — Family insurance coverage. In the event payment is not made prior to the death of the employee or former employee, Option C — Family insurance payment will be made to the person(s) eligible for the payment of the employee’s, or former employee’s, Basic Life Insurance.

538.113 Designating Trusts

An insured individual may designate a person or institution as a trustee under the terms of a trust agreement to receive the proceeds of the life insurance benefit upon the insured’s death. The designation must include, at a minimum, the name of the trust, if any, the date of the document, the name(s) of the person(s) who signed the document, and the name and address to contact to identify the trustee.

538.12 Specific Designation
538.121 SF 2823

An employee who desires an order of precedence different from listing in 538.111, or who desires to name some person, firm, or other legal entity not listed in 538.111, files SF 2823 with the employing office.

538.122 Contingent Provisions

Designations containing contingent provisions (such as “to John if he is living at home,” or “to John if he uses the money for educational purposes”) are not accepted by the employing office.

538.123 Agency as Beneficiary

An agency of the federal or District of Columbia government cannot be named as a beneficiary.

538.124 Procedures for Filing

The employing office:

  1. Checks to determine that SF 2823 is properly signed, witnessed, and otherwise complete. (A witness is not eligible to receive payment as a beneficiary.)
  2. Notes, in the space provided on SF 2823, the date that the form was received in the employing office, and the name of the person who received it.
  3. Retains the original receipted SF 2823 and places it in the employee’s official personnel folder. For exceptions, refer to 537.32.
  4. Returns the duplicate copy of the receipted SF 2823 to the employee.
538.13 Employee Informed
538.131 Previous Designation Invalid

At the time that an employee becomes insured, the employing office informs the employee that any designation of beneficiary previously filed is no longer valid and that another SF 2823 must be filed if the employee wishes to name a beneficiary. The employee is also informed that filing a designation is advisable under the following circumstances:

  1. An employee does not have and cannot easily obtain a certificate of marriage or evidence of death or divorce dissolving a prior marriage, and the employee wishes the life insurance benefit to be paid to the current spouse.
  2. A change in family status has occurred without a corresponding change in designation of beneficiary.
538.132 Order of Precedence

The employing office makes it clear to the employee that the insurance death benefit (basic and any optional) is paid in the order shown in 538.111 unless a designation of beneficiary is filed. The designation of beneficiary applies to both the basic and optional insurance unless otherwise indicated.

538.14 Change or Cancellation

Employees may cancel or change their designation of beneficiary at any time without the knowledge or the consent of any previous beneficiary.

538.15 Automatic Cancellation

Designation of Beneficiary is cancelled automatically:

  1. On the day a retired employee’s Civil Service annuity terminates unless the employee is entitled to continued insurance while receiving injury compensation benefits.
  2. On the day an employee’s injury compensation benefits terminate or the employee is held able to return to work unless the employee is entitled to continued insurance as a retired employee.
  3. 31 days after the employee ceases to be insured.
538.16 Retiring Employee Designations

Any valid designation on file at the time insured employees retire remains valid as long as the retiring employees retain insurance as retired employees unless they change the designation or cancel it. If there is no designation on file, retiring employees are informed of their right to file SF 2823 with OPM.

538.17 Reemployed Annuitant

See 537.3.

538.18 Designation While Receiving OWCP Benefits

Any valid designation on file at the time insured employees apply for continued insurance coverage while receiving OWCP benefits and unable to return to duty, remains valid. The employees may change or cancel the designation as long as they retain insurance while receiving compensation and are unable to return to duty. If there is no designation on file, the employee is informed of the right to file SF 2823 with OPM.

538.2 Benefits Payable

538.21 Amount

The death benefit is payable regardless of the cause of death and is always the amount that the employee is insured for on the date death occurs. Employees cannot have more than one amount of basic (and optional) insurance in force on their life at any one time.

538.22 Accidental Dismemberment
538.221 Single Accident

If, as a result of a single accident, an employee sustains more than one of the losses cited in 532.215, no more than the amount for which the employee is insured is payable.

538.222 Multiple Accidents

There is no limitation on the number of times a benefit is payable for accidental losses resulting from different accidents.

Example: An employee is paid for the accidental loss of sight in one eye. Later, as a result of another accident, the employee loses both hands and is paid the full benefit for the second loss.

538.23 Accidental Death

Accidental death is death resulting from bodily injuries incurred solely through violent, external, and accidental means within 90 days after the date the accident occurred. The accidental death benefit is payable in addition to the regular death benefit. The amount payable is the amount that the employee is insured for on the date that the accident resulting in death occurs.

538.24 Accidental Dismemberment and Accidental Death

If, as a result of a single accident, both an accidental dismemberment benefit and an accidental death benefit become payable, the accidental death benefit is no more than the difference between the insurance in force and the amount already paid as a dismemberment benefit.

538.25 Death During Thirty–One–Day Extension of Group Life Insurance

For an employee who, after separation (but within the 31–day extension period during which group life insurance protection is extended), converts insurance and then dies, the benefit payable is the amount of group life insurance less any amount paid under the converted individual policy.

538.3 Claims

538.31 Death of Insured Employee
538.311 Contacting Persons Entitled to Benefits

Upon death or dismemberment of an insured employee, the employing office (a) contacts the persons entitled to benefits, (b) assists in filing the claim, and (c) determines that required forms and documents are properly completed and forwarded to OFEGLI.

538.312 SF 2821

Proper completion of SF 2821 includes the following:

  1. Installation heads certify SF 2821, Agency Certification of Insurance Status, promptly and accurately. Particular attention is given to ensuring that basic pay, as shown in Item 8, is accurate and does not contain overtime pay, holiday pay, etc.
  2. Upon death of an employee, the employing office is required to immediately prepare SF 2821. The duplicate copy is forwarded to the Retirement Branch, Eagan Accounting Service Center, for certification that the basic pay in Item 8 is correct. After proper certification, the employing office will forward the certified copy to OFEGLI. The original copy of SF 2821 is to be forwarded to OFEGLI with FE 6, Claim for Death Benefits (Federal Employees’ Group Life Insurance), and the death certificate. If no claim is filed, the original copy of SF 2821 is filed in the OPF. It will be forwarded to OFEGLI only upon request.
538.32 Death of Reemployed Annuitant
538.321 Addressing Claims

If an insured reemployed annuitant dies during the period of reemployment, the claim for death benefits is filed through the:

1900 E ST NW
WASHINGTON DC 20415–0001

and not directly with the OFEGLI. A claim from a reemployed annuitant for accidental dismemberment benefits is sent directly to the OFEGLI in New York.

538.322 SF 2821

In completing SF 2821:

  1. Employing offices (1) show annual basic pay for insurance purposes (not reduced by annuity allocable to the period of reemployment), (2) enter the words “Reemployed Annuitant”, and (3) enter the CSA or CSI number under the deceased person’s name.
  2. Installation heads (or designees) certify each SF 2821 for accuracy and ensure that annual basic pay in Item 8 is correct, and excludes overtime pay, holiday pay, etc.
538.33 Requirements for Filing

Benefits are payable only upon submission of:

  1. A claim (FE 6, FE 6–Dep, or FE 7), and
  2. Satisfactory proof of loss (death certificate, physician’s statement, or similar proof), and
  3. A completed SF 2821, Agency Certification of Insurance Status, by the employing office.
538.34 Forms Used
538.341 Death Benefits

Claims for death benefits, including accidental death, are filed on Form FE 6, Claim for Death Benefits. Claims for benefits in the death of an insured family member are filed on FE 6–Dep, Statement of Claim.

538.342 Accidental Dismemberment

Claims for accidental dismemberment are filed on Form FE 7, Claim for Accidental Dismemberment. Form FE 7 is not supplied in quantity by OPM, but only by individual request on an as–needed basis. The form is not available from the material distribution center. All requests should be made to:

NEW YORK NY 10166–0188

538.35 Time Limits for Filing Accidental Death or Dismemberment Claims

In cases of accidental death or dismemberment, a written notice is sent to OFEGLI within 20 days of the accident. A claim for accidental death or dismemberment benefits, with proof of loss, is submitted within 90 days. If it is not possible to give the required notice and to file claim within the time periods specified, the notice and claims are submitted as soon as reasonably possible, together with satisfactory explanation for the delay.

538.36 Settlement

Claims for benefits are adjudicated and paid by OFEGLI. The claimant may elect payment of benefits in:

  1. Lump–sum payment, or
  2. Monthly or annual installments.