Group Life Insurance Plan Documents
Plan administrator number 1119933
Enrollment Options
Regular benefit-eligible employees may enroll in the following options:
- $50,000 only (receive a $40 shared savings credit)
- Two times (2x's) your salary (University covers this option)
- Two and half times (2.5x's) your salary
- Three times (3x's) your salary
House Staff employees will only receive the two times (2x's) salary option.
Schedule of Life Insurance
The amount of life insurance coverage you receive is based on your annual benefits salary. If your salary is not an even thousand dollars, it is rounded up to the next highest thousand and then multiplied by the coverage desired. The maximum group life insurance available is $400,000.
House staff members are automatically covered by group life insurance at twice their annual budgeted benefits salary.
Life insurance proceeds are distributed among primary beneficiaries. Contingent beneficiaries receive proceeds only if there are no living primary beneficiaries.
Cost
The cost of coverage is $0.246 per thousand dollars per month.
The University contributes an amount equal to the cost of coverage for two times the rounded annual budgeted benefits salary for all benefits-eligible employees.
Staff in the following employment groups who choose additional coverage will pay the difference between their selected coverage and the cost of two times the rounded annual budgeted benefits salary.
- Faculty
- Professional and scientific (P&S) staff
- Merit staff
- SEIU staff
Staff in the following employment groups with a salary over $25,000, who opt for only $50,000 in life insurance, may receive an additional $40 per month in Shared Savings Credits.
- Faculty
- Professional and scientific (P&S) staff
- Merit staff
- SEIU staff
How to Calculate Your Group Life Premium
To calculate the group life premium:
(Annual benefits salary, rounded to the next highest thousand) divided by 1,000 x (amount elected - 2, 2.5, or 3) x $0.246 cost/thousand = group life premium
For example, a regular benefits-eligible employee with an annual benefits salary of $63,456 can elect different levels of coverage (e.g., $50,000, 2x, 2.5x, or 3x their salary). Below is how each option works.
Please note these are examples/estimates to illustrate how the University covers two times the annual salary for the Group Life Insurance plan.
How to calculate group life premium
Electing only $50,000
Electing $50,000 in Group Life
- When electing $50,000 in Group Life, you receive a shared savings credit of $40 (regular benefit-eligible employees only), added to your $90 general benefit credit, totaling $130 in credits.
- These credits appear in the earnings section of your paycheck.
- You can purchase additional life insurance through the Supplemental Life plan during enrollment.
Electing Two Times Salary
- The University covers the total cost of two times your salary.
- The total "credit" amount of 2 times your salary is added to the $90 general benefit credit in the earnings section of your paycheck.
Using our example:
(64,000/1,000) × 2.0 × 0.246 = $31.48 credit
- $121.48 ($90 + $31.48) will show in the earnings section of your paycheck.
- These credits help offset any out-of-pocket pre-tax benefit premiums.
Electing 2.5 or 3 Times Salary
- The University covers up to two times your salary. For our example, this cost is $31.48.
- You pay the remaining amount after the 2x salary UI credit.
For 2.5x coverage:
(64,000/1,000) × 2.5 × 0.246 = $39.36 total cost
- $39.36 - $31.48 (UI credit) = $7.88 (employee cost)
For 3x coverage:
(64,000/1,000) × 3 × 0.246 = $47.23 total cost
- $47.23 - $31.48 (UI credit) = $15.75 (employee cost)
Taxable Life Insurance
The Internal Revenue Service (IRS) has determined that if an employer allows employees access to life insurance of more than $50,000, the amount above $50,000 has a value to the employee and is taxable. To review the rates per age, please visit the table below.
taxable group life insurance
Taxable Life Insurance Rate Table
This value must be added to the individual’s taxable salary when reporting income earned on the annual W-2. This income is based on the following IRS table:
| 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. |
Example: For a 46-year-old employee with a salary of $50,000, electing the three times the annual salary life insurance coverage option, an additional $180 is added to the W-2 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 above $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.
Have a Question?
The information presented on our website describes only the highlights of the plans and does not constitute official plan documents. Additional terms and conditions may apply. If there are any discrepancies between the information contained herein and the official plan documents, the plan documents will govern.