Providing For The Person Who Has an Insurable Interest in You

A provision of the federal retirement that is not quite popular allows one to provide a survivor annuity to a person with an insurable interest in you. A person with an insurable interest in you is a person that is financially dependent on you and is expected to attain a financial benefit if something were to happen to you.

The insurable interest annuity is generally used to provide benefits to someone else other than your spouse seeing as spouse’s benefits are covered under standard spousal survivor benefit policies. The eligibility for this benefit will fall to an adoptive or blood relative such as a child, a qualifying partner or former spouse, a same-sex domestic partner that meets some qualifications and last but not least a person you are engaged to be married.

Also one can establish an insurable interest by submitting affidavits from two or more people who are aware of your relationship, this is if the person you want to provide a benefit for isn’t on the list above. They will need to confirm the extent as to which they are dependent on you, your relationship, and the reasons she or he might expect, if you stayed alive, to derive a financial benefit. In addition, you will need to have a medical exam done and have a report signed and dated by a physician that’s licensed to prove that you are in good health.

The amount of your annuity that could be used as a base and the age difference between you and the person you intend on getting the benefit for. This are the two things that will determine how much the benefit will cost you. 10% if the survivor is the same age, older than or less than five years younger. 15% if 5 but less than 10 years younger, 20% is 10 but less than 25 years younger, 25% if 15 but less than 20 years younger, 30% if 20 but less than 25 years younger, 35% if 25 but less than 30 years younger, 40% percent if 30 or more years younger.

The proceeds of your Federal Employees Group Life Insurance and your TSP account are examples of other benefits that may be provided for a non-spouse, and as long as someone else doesn’t have a legal title to them, they will easily receive those benefits.

financial dependent insurable insterest