Florida Health Insurance Definitions

Florida Health Insurance Terms:
"Living Benefit"

Define: "Living Benefit":

This is a benefit that provides for the payment of a portion of the death benefit prior to an insured's death should the insured be diagnosed as terminally ill. The specific requirements vary by company. This is commonly called an Accelerated Death Benefit.

More Information

When you cash or deposit the living benefit check, the Office of Federal Employees' Group Life Insurance (OFEGLI) sends a copy of the Explanation of Benefits (FE-8C) to your personnel and payroll offices. This Explanation of Benefits shows the effective date of your living benefit election and the amount of Basic insurance that remains (the post-election Basic Insurance Amount); if you elected a full living benefit, the post-election Basic Insurance Amount is $0.

Your employing office does not calculate the amount of your post-election Basic Insurance Amount; this is done by OFEGLI. This post-election Basic Insurance Amount never changes. Even if your salary changes, the post-election Basic Insurance Amount remains the same. The age factor used in computing benefits payable upon your death also will not change.

Example -- Joe elects a partial living benefit; his post-election Basic Insurance Amount is $15,000. Three months later he gets a pay raise; two months later he turns 41; one month later he dies.

At the time of death, his Basic Insurance Amount is $15,000; his pay raise had no effect on his Basic Insurance Amount, since a post-election Basic Insurance Amount never changes. Although he was 41 at the time of death, the death benefits are computed based on age 40, since that was his age at the time of election. His beneficiary(ies) would therefore receive $22,500 (Basic Insurance Amount of $15,000 x an age factor of 1.5 [the age factor for age 40]).

Further details - Living Benefit: FYI


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