2009 Benefits Open Enrollment
Group Life Insurance
Instructions and Information for
Completing Your Personal Enrollment
These instructions will assist you in completing your Personal Enrollment for The University of Iowa Flexible Benefits Program.
MANDATORY PARTICIPATION
Participation in the University’s group term life insurance program is a condition of employment for permanent University faculty and staff members who hold a 50% time or greater appointment. No statement of health or physical exam is required for this program.
This plan allows you to select from five levels of life insurance coverage. This coverage is for yourself only. These choices provide coverage of a flat $50,000, 1 times salary, 2 times salary, 2-1/2 times salary, or 3 times salary. Enrollment in the group life plan is mandatory. You must choose either $50,000 in coverage or one times your salary, whichever is less. Next to each selection is the amount of coverage that is provided by each choice. The next column to the right shows the monthly costs of each choice. Once your selection is made, enter the corresponding number on the “Option Code” line.
MAXIMUM COVERAGE LIMITS
The maximum amount of obtainable life insurance is $500,000
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 W2. This income is based upon the following IRS table:
Age |
Rate per $1,000
of Excess Life Insurance Per Year |
|---|---|
Under 25 |
$0.60 |
25 - 29 |
$0.72 |
30 - 34 |
$0.96 |
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:
Salary--$50,000
3 times life insurance selected--$150,000
Age--46Calculation:
150,000 minus 50,000 = 100,000
100,000 divided by 1,000 = 100
100 times X 1.80 = $180.00
$180.00 is added to W2 as taxable income
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, the supplemental life insurance program and spouse and dependent life. If you have any questions concerning this calculation and the possible effect on your taxable income, please contact the University Benefits Office.
If you have questions or concerns regarding the enrollment process, please contact:
University Benefits
120-40 USBEmail: benefits@uiowa.edu
Web Site: www.uiowa.edu/hr/benefits
Phone: 319-335-2676 or
877-830-4001 (toll free)Fax: 319-335-2776