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U.S. Code as of:
01/03/05
Section 8706. Termination of insurance; assignment of ownership
(a) A policy purchased under this chapter shall contain a
provision, approved by the Office of Personnel Management, to the
effect that insurance of an employee stops on his separation from
the service or 12 months after discontinuance of his pay, whichever
is earlier, subject to a provision for temporary extension of life
insurance coverage and for conversion to an individual policy of
life insurance under conditions approved by the Office. Justices
and judges of the United States described in section 8701(a)(5)(ii)
and (iii) of this chapter are deemed to continue in active
employment for purposes of this chapter.
(b)(1) In the case of any employee who retires on an immediate
annuity and has been insured under this chapter throughout -
(A) the 5 years of service immediately preceding the date of
the employee's retirement, or
(B) the full period or periods of service during which the
employee was entitled to be insured, if fewer than 5 years,
life insurance, without accidental death and dismemberment
insurance, may be continued, under conditions determined by the
Office.
(2) In the case of any employee who becomes entitled to receive
compensation under subchapter I of chapter 81 of this title because
of disease or injury to the employee and has been insured under
this chapter throughout -
(A) the 5 years of service immediately preceding the date the
employee becomes entitled to compensation, or
(B) the full period or periods of service during which the
employee was entitled to be insured, if fewer than 5 years,
life insurance, without accidental death and dismemberment
insurance, may be continued, under conditions determined by the
Office, during the period the employee is receiving compensation
and is held by the Secretary of Labor or the Secretary's delegate
to be unable to return to duty.
(3) The amount of life insurance continued under paragraph (1) or
(2) of this subsection shall be continued, with or without
reduction, at the end of each full calendar month after the date
the employee becomes 65 years of age and is retired or is receiving
compensation for disease or injury, in accordance with the
employee's written election at the time eligibility to continue
insurance during retirement or receipt of compensation arises, as
follows:
(A) the employee may elect to have the deductions required by
section 8707 of this title withheld from annuity or compensation,
and the employee's life insurance shall be reduced each month by
2 percent of the face value until 25 percent of the amount of
life insurance in force before the first reduction remains; or
(B) in addition to any deductions which would be required if
the insurance were continued as provided under subparagraph (A)
of this paragraph, the employee may elect continuous withholdings
from annuity or compensation in amounts determined by the Office,
and the employee's life insurance coverage shall be either
continued without reduction or reduced each month by no more than
1 percent of its face value until no less than 50 percent of the
amount of insurance in force before the first reduction remains.
(4) If an employee elects to continue insurance under
subparagraph (B) of paragraph (3) of this subsection at the time
eligibility to continue insurance during retirement or receipt of
compensation for disease or injury arises, the individual may later
cancel that election and life insurance coverage shall continue as
if the individual had originally elected coverage under
subparagraph (A) of paragraph (3) of this subsection.
(c) Notwithstanding subsections (a) and (b) of this section, an
employee who enters on approved leave without pay to serve as a
full-time officer or employee of an organization composed primarily
of employees as defined by section 8701(a) of this title, within 60
days after entering on that leave without pay, may elect to
continue his insurance and arrange to pay currently into the
Employees' Life Insurance Fund, through his employing agency, both
employee and agency contributions from the beginning of leave
without pay. The employing agency shall forward the premium
payments to the Fund. If the employee does not so elect, his
insurance will continue during nonpay status and stop as provided
by subsection (a) of this section.
(d) If the insurance of an employee stops because of separation
from the service or suspension without pay, and the separation or
suspension is thereafter officially found to have been erroneous,
the employee is deemed to have been insured during the period of
erroneous separation or suspension. Deductions otherwise required
by section 8707 of this chapter shall not be withheld from any
backpay awarded for the period of separation or suspension unless
death or accidental dismemberment of the employee occurs during
such period.
(e)(1) Under regulations prescribed by the Office, each policy
purchased under this chapter shall provide that an insured employee
or former employee may make an irrevocable assignment of the
employee's or former employee's incidents of ownership in the
policy.
(2) A court decree of divorce, annulment, or legal separation, or
the terms of a court-approved property settlement agreement
incident to any court decree of divorce, annulment, or legal
separation, may direct that an insured employee or former employee
make an irrevocable assignment of the employee's or former
employee's incidents of ownership in insurance under this chapter
(if there is no previous assignment) to the person specified in the
court order or court-approved property settlement agreement.
(f) If the insurance of a former employee receiving a disability
annuity under section 8337 of this title stops because of the
termination of such annuity, and such annuity is thereafter
restored under the second or third sentence of subsection (e) of
such section, such former employee may, under regulations
prescribed by the Office, elect to resume the insurance coverage
which was so stopped.
(g) The insurance of an employee under a policy purchased under
section 8709 shall not be invalidated based on a finding that the
employee erroneously became insured, or erroneously continued
insurance upon retirement or entitlement to compensation under
subchapter I of chapter 81 of this title, if such finding occurs
after the erroneous insurance and applicable withholdings have been
in force for 2 years during the employee's lifetime.
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