What You Need To Know
Life and accidental death and dismemberment (AD&D) insurance is just-in-case insurance. Because life happens, it’s better to be prepared.
Life Insurance
You’re automatically enrolled in basic life insurance at 1x your base salary, up to a maximum of $700,000. This is 100% company paid.
You also have the option to purchase:
Supplemental life insurance: You can buy additional life insurance for yourself in multiples of 1x to 8x your annual base salary, up to a $2 million maximum.
If you’re a new employee, you’ll need to provide evidence of insurability (EOI) for coverage greater than 3x your base salary or $500,000, whichever is less. For current employees, EOI is required to enroll in or increase coverage.
Spouse life insurance: You can also purchase life insurance for your spouse in $25,000 increments, up to a $200,000 maximum.
If both you and your spouse work for the company, your spouse is not eligible for spousal life insurance. If you’re a new employee, you’ll need to provide EOI for coverage greater than $50,000. For current employees, EOI is required to enroll in or increase coverage.
- Child life insurance: You can buy dependent child life insurance for each of your children in the amount of $10,000, $15,000, or $25,000.
Accelerated Death Benefit
Accelerated Death Benefit
If you become terminally ill while covered under a life insurance plan, you may be eligible to receive an accelerated payment of 80% of your life insurance coverage before you pass away, up to a maximum of $500,000. This benefit is only payable once in your lifetime and will reduce the life insurance benefits that go to your beneficiary.
Imputed Income
Imputed Income
Federal law requires you to pay income taxes on the combined value of company-paid basic life insurance and your elected supplemental life insurance, if greater than $50,000, and on dependent life insurance coverage, if applicable. This is called imputed income.
Will I Need Evidence of Insurability (EOI)?
Will I Need Evidence of Insurability (EOI)?
EOI is a process by which you provide medical information about your health to the insurance carrier. You’ll need EOI for your initial enrollment if you’re signing up for:
- Supplemental employee life insurance greater than either 3x your base salary rounded to the nearest $25,000 or $500,000, whichever is less.
- Spouse life insurance greater than $50,000.
- Any increase in coverage after your initial enrollment period.
If EOI is needed, your new coverage will begin once your EOI is approved.
For more information on EOI, visit the Benefits Service Center website or call 888.850.1767.
Accidental Death and Dismemberment (AD&D) Insurance
AD&D insurance pays a benefit if you pass away in an accident or if you suffer certain losses or injuries because of an accident. You’re automatically enrolled in basic AD&D at 1x your base salary, up to a maximum of $700,000.
You have the option to purchase additional supplemental AD&D coverage for yourself in increments of 1x to 8x your base salary, up to a $2 million maximum. The cost of supplemental AD&D insurance varies by the amount of coverage you elect. EOI is not required to elect supplemental AD&D insurance in any amount.
The Rules
- Imputed income: Imputed income is the amount you pay in income taxes on the value of life insurance if the amount is more than $50,000.
- If you leave the company: You can take your basic and supplemental employee life and AD&D insurance with you by converting them to individual policies. Just make sure to apply for the policies and pay the premiums to the carrier within 31 days of your benefits termination date.
- After you turn 65: Basic and supplemental employee life insurance and basic and supplemental AD&D insurance benefits decrease by 35% at age 65 and by 50% at age 70. The same reductions apply to spouse life insurance.
- Don’t forget to choose a beneficiary: Keep your beneficiary designations up to date. You’re automatically designated as the beneficiary for any spouse or dependent life insurance. You need to choose the beneficiaries for your life insurance.
