Section 1 Short title
This Act may be cited as the “Federal Life Insurance Transparency Act”.
Federal Life Insurance Transparency Act
A BILL
To amend title 5, United States Code, to provide that payments under the Federal employees’ group life insurance program shall be made in a lump sum, unless the insured or the recipient elects otherwise.
Sec. 2 Amendment relating to form of payment
In general— Section 8705 of title 5, United States Code, is amended by adding at the end the following:
“(f)
“(1) Group life insurance and group accidental death insurance payable under this chapter, by reason of the death of an employee, shall be paid in the form determined as follows:
“(A) In the form of payment elected by the person to whom the payment is to be made.
“(B) In the absence of an election under subparagraph (A), in the form of payment elected by the employee.
“(C) In the absence of an election under subparagraphs (A) and (B), in the form of a lump-sum payment.
“(2) An election under subparagraph (A) or (B) of paragraph (1) shall not be effective unless it is made in such form and manner as the Office may require.
“(3) The Office shall prescribe any regulations necessary to carry out this subsection. Such regulations shall provide for at least 1 alternative form of payment besides the form of payment described in paragraph (1)(C).”
Effective date— The amendment made by subsection (a) shall apply in the case of any employee (as defined by section 8701 of title 5, United States Code) who becomes insured in any calendar year beginning at least 3 months after the date of enactment of this Act.