Frequently Asked Questions U.S. Office of Personnel Management . . . .
Benefits are payable based on the death of an enrolled individual no matter how the death happened.
However, if someone else causes your death, he or she may be excluded from receiving the death benefits. Funeral homes have the form to do this. Life insurance proceeds are not considered taxable income for the recipients for personal income tax purposes. You may wish to consult your tax advisor for further advice. The Office of Federal Employees' Group Life Insurance pays interest on all claims from the date of the insured's death to the date of the payment.