Federal Employees: Insurance Open Season

Federal employees with a life-threatening illness can improve
their financial condition by tens of thousands of dollars by
taking advantage of a special open season, which ends July
21.

During the open season, employees who are not insured can
enroll in life insurance up to slightly over their annual
salary, with NO physical examination or health questionnaire.
This allows them to take advantage of a new "accelerated
benefit" option, which allows those with a life expectancy of
less than nine months to collect the above amount while they
are alive. (Unlike "viatication," this provision allows them
to receive almost 100 percent of the insurance amount in
cash.) A little-known provision can double the amount for
those expected to die before age 36.

An estimated one third of unmarried Federal employees do not
yet have life insurance. For them, this open period is
especially important.

Note on life insurance early benefits (for anyone, not only
Federal employees): Tom McCormack of Affording Care, Inc.,
says that the best way to get money from a life insurance
policy is through a private loan from friends, family, or
relatives, in return for naming them beneficiaries; if they
have equity but no cash, a reverse mortgage without monthly
payments can be used. The second best way is through
accelerated benefits, if available. The least desirable way
is through viatication (sale) of the policy. Income from
accelerated benefits or viatication is still taxable under
Federal law.

For more information, call Tom McCormack, 202/479-2543.