Group and Supplemental Life

Group Life Insurance

This University-paid benefit provides life insurance coverage for all Faculty, Professional and Scientific, Merit Supervisory Exempt, Merit Confidential, Merit, and House Staff.  This coverage is for the employee only.

Mandatory Participation

Participation in the University’s group term life insurance program is a condition of employment for regular University faculty and staff members who hold a 50% time or greater appointment. Coverage is required. No Statement of Health or physical exam is required for this program.

Schedule of Life Insurance

Your annual benefits salary determines the amount of life insurance coverage.  If your salary is not an even thousand dollars, it is rounded to the next highest thousand dollars, and then multiplied by the coverage desired. The maximum amount of obtainable group life insurance is $400,000.

Merit Staff and House staff are automatically covered by Group Life Insurance at 2 times their annual budgeted benefits salary as a function of their employment.

Faculty, Professional and Scientific, and Merit Supervisory Exempt staff may choose from the following Group Life coverage options:

  • 2 times annual budgeted benefits salary
  • 2.5 times annual budgeted benefits salary
  • 3 times annual budgeted benefits salary
  • $50,000

Cost

Cost is $0.43 per thousand of coverage per month. 

The University contribution to the cost is equal to the cost of 2 times the rounded annual budgeted benefits salary for all benefits-eligible employees.

Faculty, Professional and Scientific, Merit Supervisory/Exempt, Merit Confidential staff options who elect additional coverage will pay the difference between the cost of their elected coverage and the cost of 2 times the rounded annual budgeted benefits salary. 

Faculty, Professional and Scientific, Merit Supervisory/Exempt, Merit Confidential staff options whose salary is over $25,000 who elect to receive only $50,000 in life insurance may receive an additional $40 per month in Shared Savings Credits.

Taxable Life Insurance

The Internal Revenue Service (IRS) has determined that if an employer allows employees access to life insurance in excess of $50,000, the amount in excess of $50,000 has a value to the employee. This value must be added to the individual’s taxable salary when reporting income earned on the annual W 2. This income is based upon the following IRS table:

Taxable Life Insurance by Age and Rate
Age Rate per $1,000 of Excess
Life Insurance Per Year
Under 25 $.60
25-29 $.72
30-34 $.96
35-39 $1.08
40-44 $1.20
45-49 $1.80
50-54 $2.76
55-59 $5.16
60-64 $7.92
65-69 $15.24
70 and older $24.72

Example: For a 46 year old employee with a salary of $50,000, electing the 3 times the annual salary life insurance coverage option, an additional $180.00 is added to the W2 as taxable income.

Calculation:
$150,000 minus $50,000 = $100,000
$100,000 divided by $1,000 = $100
$100 times 1.80 = $180.00

In determining the amount of life insurance in excess of $50,000, the employer must total all life insurance programs in which the employee participates. For The University of Iowa, this would include the basic group program and the supplemental life insurance program.

Supplemental Life Insurance Plan                                                                       

This optional program allows you to obtain additional life insurance, for yourself only, in excess of the amount provided by the group life coverage.

Schedule of Life Insurance

The optional Supplemental Life Insurance plan allows you to acquire additional life insurance from 1/2 to 3 1/2 times your salary. The amount of coverage is based upon your annual benefits salary. If your salary is not an even thousand, it will be rounded to the next highest thousand and then multiplied by the coverage chosen.  Coverage is available in the following amounts:

  • 1/2 times annual budgeted benefits salary
  • 1 time annual budgeted benefits salary
  • 1 1/2 times annual budgeted benefits salary
  • 2 times annual budgeted benefits salary
  • 2 1/2 times annual budgeted benefits salary
  • 3 times annual budgeted benefits salary
  • 3 1/2 times annual budgeted benefits salary

Rates

The Supplemental Life Insurance plan is age rated and the rates change as a person reaches 40, 50, and 60. Until a person reaches the age of 60, the rate for this program is less than the group life product. The rates for the group life product are higher since it must insure all employees no matter what age they are or what medical conditions they might have. Carefully evaluate these two plans to insure you are getting the most coverage for your money.

Rates are keyed to the coverage levels in the Schedule of Life Insurance. The rates for coverage are:

Supplemental Life Insurance Rates by Age
Age Monthly Rate per $1000
Less than age 40 $.04
40 but less than 50 $.10
50 but less than 60 $.26
60 and up $.56

Faculty, Professional & Scientific, Merit Supervisory Exempt Staff, and Merit Confidential: Adjustments to the amount of insurance and/or the rate paid for the insurance that are due to a change in age or budgeted salary will generally adjust annually on Jan. 1st.

Merit Staff: The amount of insurance and the rate paid for the insurance will adjust monthly, reflecting a change in age or budgeted salary.

Additional Information/Forms