Court-Ordered Benefits

Yes. If a court-ordered benefit for a former spouse will prevent a spouse from receiving a benefit that is sufficient to meet anticipated needs, you may want to provide an insurable interest benefit for your current spouse.

To elect the insurable interest benefit, both you and your spouse must jointly waive your current spouse’s right to a maximum survivor annuity benefit. Your annuity will be reduced to pay for both the cost of your former spouse’s court-ordered benefit and for the cost of your insurable interest election. If your former spouse loses entitlement to the court-ordered survivor annuity benefit, you can request that the insurable interest benefit you elected for your current spouse be converted to a fully reduced annuity to provide a maximum survivor annuity for your current spouse (or, with the current spouse’s consent, a partially reduced annuity to provide a partial survivor annuity) within two years after the former spouse loses eligibility.

As an annuitant you may want to convert your insurable interest survivor annuity to a maximum survivor annuity as the amount of survivor annuity payable to your current spouse would change.

Under CSRS, a maximum survivor annuity is 55% of your unreduced annuity (annuity payable prior to the reduction for the survivor annuity). An insurable interest maximum survivor annuity is 55% of your reduced annuity (annuity payable after the reduction for the insurable interest survivor annuity).

Under FERS, a maximum survivor annuity 50% of your unreduced annuity (annuity payable prior to the reduction for the survivor annuity). An insurable interest maximum survivor annuity is 50% of the reduced annuity (annuity payable after the reduction for the insurable interest survivor annuity).