What your family gets if you die in service

They are separate benefits with separate rules, and this is the thing to understand first. The Basic Employee Death Benefit is a one-time payment. The survivor annuity is a monthly income stream that can last the rest of your spouse's life.

Each has its own service test. The Basic Employee Death Benefit requires 18 months of creditable civilian service. The monthly annuity requires 10 years of creditable service, of which at least 18 months must be civilian.

That gap matters more than it looks. An employee who dies at four years of service leaves a spouse who receives the lump sum and no monthly income at all. Crossing ten years changes the picture completely.

The Basic Employee Death Benefit is also a FERS-only benefit. There is no CSRS counterpart, so it is one of the places where FERS is unambiguously the better deal for a young family.

Nine months is the general rule, and it applies to both benefits. A surviving spouse qualifies if the marriage lasted at least nine months, which is meant to prevent deathbed marriages rather than to penalize recent ones.

Two exceptions waive it entirely. If your death was accidental, the nine-month requirement does not apply. If a child was born of the marriage, it does not apply either.

A former spouse can also receive these benefits, but only through a qualifying court order on file with OPM. The same nine-month marriage test applies, and for the lump sum, a former spouse must not have remarried before turning 55.

The paperwork point is worth acting on. A court order awarding survivor benefits does your family no good sitting in a lawyer's file, so make sure OPM actually has a certified copy on record.

Half of what you had earned. The survivor annuity is 50 percent of the annuity computed as if you had retired on the date of your death, using your service and your High-3 at that point.

One detail works strongly in your family's favor. No age reduction applies, even though you never reached retirement age. A 45-year-old who dies with 20 years of service leaves a benefit computed without the penalty an early retiree would face.

This is a different calculation from the survivor election you make at retirement, though it produces a familiar-looking number. At retirement you choose between a 50 percent and a 25 percent survivor benefit and accept a reduction to your own annuity to pay for it. Death in service involves no election and no reduction, because there was no annuity to reduce.

Health coverage rides along with it. A surviving spouse receiving a monthly annuity can generally keep FEHB, which is often worth more over time than the annuity itself.

Children get their own monthly benefit, separate from anything your spouse receives. Unmarried dependent children are covered until they turn 18, and a full-time student can continue to 22.

A child disabled before age 18 can receive the benefit indefinitely, with no upper age limit, as long as the disability continues and the child remains unmarried.

Now the part almost nobody expects. The FERS children's benefit is reduced by whatever Social Security pays your children for the same month, and OPM states plainly that this frequently reduces the FERS amount to zero.

That is not a loss so much as a design choice. Social Security survivor benefits for children are usually the larger of the two, so your family typically receives the bigger benefit rather than both. Planning as though they stack will overstate what your children actually get.

• Unmarried dependent children receive benefits until age 18.
• A full-time student at a recognized school can continue to age 22.
• A child disabled before 18 can receive benefits with no age limit.
• The FERS amount is offset by Social Security children's benefits for the same month.
• In many families that offset takes the FERS children's benefit to zero.

Most of this happens automatically, which is exactly why the parts that do not deserve attention. Your survivors will not have to elect the Basic Employee Death Benefit or the survivor annuity, but somebody does have to apply for them.

Your beneficiary designations are the piece most likely to be wrong. They override your will, they do not update themselves after a divorce or a remarriage, and they govern the lump-sum payments that fall outside the survivor annuity.

Ten years of service is the milestone worth knowing. If you are approaching it and have a family relying on your income, understand that crossing it converts a one-time payment into a lifetime annuity plus continued health coverage.

Finally, make sure your family knows these benefits exist. A surviving spouse who does not know to file for the Basic Employee Death Benefit may simply never receive it. To see how survivor income fits your household picture, run your free readiness score.