Group Life Insurance
This University-paid benefit provides life insurance coverage for all Faculty, Professional and Scientific, Merit Supervisory Exempt, and Merit staff.
Additional Information/Forms
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.
Merit Staff are automatically covered by Group Life Insurance at a set coverage level as a function of their employment.
Faculty, Professional and Scientific, and Merit Supervisory Exempt staff have multiple Group Life coverage options.
No Statement of Health or physical exam is required for this program.
Schedule of Life Insurance
Your Annual Benefits Salary determines the amount of insurance available under this program. 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.
EXAMPLE:
Employee salary = $29,750 annually.
The salary is rounded to $30,000 and then multiplied by the appropriate level of coverage.The University pays the premium for 2 ½ times the rounded salary for all benefits-eligible employees. How the premium is paid differs with your employment classification.
If the staff member in the example above was Merit Staff, the University would multiply the $30,000 by 2 ½, and provide the staff member with $75,000 in insurance.
If the staff member in the example above participated in the Flexible Benefit Program, the cost for 2-1/2 times the salary ($75,000) would be added into their Flexible Credits. This coverage costs $0.43 per $1000 of coverage. The staff member would then select the Group Life Insurance option they desired from the following options: $50,000, 1 time salary, 2 times salary, 2-1/2 times salary, or 3 times salary. You must take at least 1 times your salary or $50,000 in coverage, whichever is less.
Cost and Maximum Coverage Limits
Cost is $0.43 per thousand of coverage per month.
The maximum amount of obtainable life insurance is $1,000,000.
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 W 2. This income is based upon 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 |
$24.72 |
Example:
Salary: $50,000
3 times life insurance selected: $150,000
Age: 46
Calculation:
150,000 minus 50,000 = 100,000
100,000 divided by 1,000 = 100
100 times 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 (faculty, professional and scientific, and merit supervisory exempt). If you have any questions concerning this calculation and the possible effect on your taxable income, please contact the University Benefits Office.
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.
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:
Age |
Monthly
Rate per $1000 |
Less
than age 40 |
$.04 |
40
but less than 50 |
$.09 |
50
but less than 60 |
$.24 |
60
and up |
$.51 |
For Faculty, Professional & Scientific, and Merit Supervisory Exempt Staff: 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.
For Merit Staff: the amount of insurance and the rate paid for the insurance will adjust monthly, reflecting a change in age or budgeted salary.