Group Life Insurance

To support the well-being of faculty and staff, the University of Iowa provides comprehensive life insurance coverage. This benefit is available to all benefits-eligible employees with appointments of 50% time or greater.

Participation in this program is required for eligible employees. No health questionnaire or physical exam is needed. This coverage helps protect you and your family by providing financial security in the event of a loss.

Enrollment Options

Regular benefit-eligible employees may choose from the following coverage options:

$50,000 only - Includes a $40 shared savings credit.
Two times your annual salary - This option is fully covered by the University.
Two and half times your annual salary
Three times your annual salary

House staff employees receive coverage equal to two times their annual salary only.

Schedule of Life Insurance

Your life insurance coverage is based on your annual benefits salary. If your salary is not an even thousand, it will be rounded up to the next highest thousand. That amount is then multiplied by the coverage option you choose.

The maximum group life insurance available is $400,000.

Beneficiaries

Primary beneficiaries receive the life insurance proceeds first.
Contingent beneficiaries receive proceeds only if no primary beneficiaries are living.

Cost of Coverage

The cost of life insurance is $0.221 per $1,000 of coverage per month.
The University pays an amount equal to the cost of coverage for two times your rounded annual benefits salary.
If you choose additional coverage beyond this amount, you will pay the difference.
Regular faculty and staff with a salary over $25,000 who select only $50,000 in coverage may qualify for an extra $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 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 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:

Taxable life insurance Rates
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.

How to Calculate Your Premium

Your monthly premium is based on your annual benefits salary and the coverage level you choose.

Formula:

Round your annual benefits salary up to the next highest $1,000.
(If your annual benefits salary is $63,456, your rounded salary = $64,000).
Divide that amount by 1,000
($64,000 ÷ $1,000 = 64)
Multiply by the coverage level you select (2, 2.5, or 3 times your salary).
Multiply by $0.221 (the cost per $1,000 of coverage per month).

Note: The University covers the cost for two times your salary. You only pay for coverage beyond that amount.

Examples are listed below in the following drop-downs:

Electing only $50,000

Electing $50,000 in Group Life

You receive a $40 Shared Savings Credit (for regular benefit-eligible employees).
This credit is added to your $90 General Benefit Credit, for a total of $130 in credits each month.
These credits appear in the Earnings section of your paycheck.

You can also purchase additional life insurance through the Supplemental Life plan during enrollment.

Electing Two Times Annual Benefits Salary

You pay nothing for coverage equal to two times your annual benefits salary. The University covers the full cost by applying credits to your paycheck.

A credit equal to the cost of this coverage is added to your $90 General Benefit Credit in your paycheck under "Earnings."

Example:

Calculation:
- The University then adds $28.29 in credits to your benefit credit amount.
  - Total credits: $90 (general credit) + $28.29 (2x's your salary credit) = $118.29 credits/month
  - The $28.29 credit will offset the premium cost of two times your annual benefit salary for group life insurance. There is no cost to the employee.

Electing Two and a half or Three Times Your Annual Benefits Salary

The University pays the full cost for coverage equal to two times your annual benefits salary. If you choose more than 2 times your salary, you pay only the difference, since the University will continue to apply the credit amount calculated for 2 times your salary.

Example Using $64,000 Salary

University-paid coverage (2x salary):
($64,000 ÷ 1,000) x 2 x $0.221 = $28.29 credit

For Two and a Half Times Coverage:

Minus University Credit:
$35.36 - $28.29 = $7.07 (employee cost)

For Three Times Coverage:

Minus University Credit:
$42.43 - $28.29 = $14.14 (employee cost)

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