Voluntary Term Life Insurance

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

Voluntary Term Life Enrollment

Coverage is available in the following amounts:

1/2 times salary
1 times salary
1-1/2 times salary
2 times salary
2-1/2 times salary
3 times salary
3-1/2 times salary

Schedule of Life Insurance

The optional, voluntary term life insurance plan allows you to acquire additional life insurance from one-half to three and one-half times your salary. The amount of coverage is based on your annual budgeted salary. If your salary is not an even thousand, it will be rounded to the next highest thousand and multiplied by the chosen coverage. The maximum amount of available life insurance is $1,000,000.

Rates

The voluntary term life insurance plan is age-rated—rates change as a person reaches ages 40, 50, and 60. When determining the right amount of coverage for you, take note of group life rates and voluntary term life rates. The rates for group life insurance are generally 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 ensure you are getting the most coverage for your money.

Age	Monthly Rate per $1,000
Less than age 40	$.04
40 but less than 50	$.10
50 but less than 60	$.26
60 and up	$.56

Voluntary term life insurance premiums are paid on a pre-tax basis.

Adjustments to the amount of insurance and/or the rate paid for the insurance due to a change in age or budgeted salary will generally be adjusted annually on Jan. 1.

Taxable Life Insurance

The Internal Revenue Service (IRS) has determined that if an employer allows employees access to life insurance above $50,000, the amount over $50,000 is taxable and has value to the employee.

This value must be added to the individual’s taxable salary when reporting income earned on the annual W-2.

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.

Taxable Life Insurance Rate Table

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