The Curious Case of FEGLI Incontestability

Incontestability is where you get to keep erroneous coverage even though it is…well, erroneous. When it comes to FEGLI and federal benefits, incontestability is only possible in certain rare circumstances.

Before we get to the incontestability, it might be a good idea to consider the ways in which you may get erroneous FEGLI coverage in the first place.

That could happen in the following ways:

– Your agency allows you to elect coverage when you are not entitled for it;

– Your Notification of Personnel Action (SF 50) code is incorrect and gives you more coverage than you elected;

–  Your agency payroll office collects premiums for a coverage that you did not elect for; or

– OPM allows you to continue your coverage after federal retirement or separation from federal employment when you have become an annuitant or compensationer.

Note that erroneous coverage in this reference is always about “extra” coverage than you are entitled to or opted for. If it’s less, then it’s not an erroneous coverage issue, but an overpayment on your federal employee payscale, annuity or compensation.

Incontestability Conditions For FEGLI Erroneous Coverage 

Now assuming you happened to get erroneous coverage under one of the circumstances described above, you still need to satisfy the following criteria in order for the coverage to be incontestable.

– The erroneous coverage must have been in effect for at least two years between the time it started and was discovered; and

– You must have paid the required premiums for the erroneous coverage during this period.

If you did this, then your erroneous coverage will no longer be an error, and you will be entitled to it by law. Of course, you have the option to cancel the erroneous coverage upon discovery. Note that if it fulfills the conditions for incontestability, you will not get a refund of the FEGLI premiums you paid on the erroneous portion of your coverage.

The only exception to this no refund clause is Option C coverage. If you erroneously paid premiums for Option C coverage for family members when you did not have any eligible family members, then you may cancel this coverage retrospectively and seek a full refund of the premiums paid for Option C coverage.