Although many federal workers don't know it, their government jobs allow them to provide their spouses with a lifetime benefit - indexed to inflation - if they die on or off the job while still on the payroll.

Unlike a one-time insurance payment, survivor benefits come every month for life. They rise with the cost of living so they cannot be eroded by inflation, like most pension benefits. These benefits combined with some life insurance can protect a federal family from financial catastrophe.

For workers under the old Civil Service Retirement System (CSRS), which are those employees hired before 1984, a spouse will get an annuity payable for life if the covered employee dies. This is often a surprise to many federal workers and their spouses, who tend to think of this as a benefit that only retirees can provide.

To be eligible, the employee must have completed 18 months of service and the marriage must have been in effect for at least nine months. This nine-month requirement is waived if the death was accidental or if a child was born of the marriage. There must be no court order awarding full survivor benefits to a previous spouse.

If the CSRS-covered employee has more than 21 years and 10 months of service at the time of death, the surviving spouse will get 55% of an annuity computed under the regular CSRS formula. This will be based on the employee's high-three-year average salary and length of service at death. For those with less than 21 years and 11 months upon death, the spouse will get a guarantee minimum annuity based on the CSRS disability formula.

The above computation gives the spouse 55% of an annuity amount that is based on 40% of the high-three average salary. Or, if less, 55% of an annuity amount obtained after increasing the employee's service by the time between his/her death and the date he/she would have been age 60, times his/her high-three. Because this is complicated, it is best to run this by the agency retirement counselor to see exactly how the benefit would be computed.

Workers covered by the newer Federal Employees Retirement System (FERS), which includes most people hired after 1983, have a much different benefit, although the eligibility requirements are similar to those for the CSRS survivor benefit.

The surviving spouse of a FERS employee will get a basic death benefit amounting to $15,000 increased by all the cost-of-living adjustments (COLA) since December 1, 1987. Additionally, the spouse will get 50% of the final salary or 50% of the high-three average salary, whichever is higher. The spouse can choose to take this basic death benefit in a lump sum or in 36 monthly installments.

The survivor of someone with at least 10 years of service gets a survivor annuity pluse the basic FERS death benefit. That is 50% of the annuity calculated as if the employee retired on the date of death. The annuity is based on the high-three average salary multiplied by length of service. Because this is complicated, it is best to run this by the agency retirement counselor to see exactly how the benefit would be computed.

The survivor annuity under CSRS and FERS ends if the spouse remarries before age 55, although it is restored if that marriage ends.