Life and Accident Insurance
What would happen to your family if you were no longer in the picture?
Choice Benefits offers you the security of knowing your family has financial protection in the event of your death. Life insurance is part of any financial protection strategy and Choice Benefits gives you the opportunity to tailor your choices to meet your needs with a variety of different levels of coverage.
Here are some key points to remember about the life insurance benefit options:
- An employee may not decline coverage. Each eligible employee must elect a life insurance option.
- Options include $5,000; $50,000; or an election of one (1) times to six (6) times the employee's annual base salary. Once an employee is enrolled in the life insurance plan, he/she may increase his/her coverage by one level at each future enrollment opportunity or if he/she has a qualifying family status change.
- Coverage is also available for the employee's spouse/domestic partner and eligible dependent children.
- How much the employee pays for life insurance depends on his/her age, annual base pay and the option he/she chooses.
- The premium increases in five (5) year increments beginning at age 35 on the pay period following the employee's birth date.
- The university pays for $50,000 or one (1) times annual base pay, whichever is less. The portion paid by the university is known as the Life Plans Credit.
- Up to $1,000,000 of Employee Life coverage is guaranteed if elected within 31 days of initial eligibility. If an employee does not make an election, he/she will be enrolled automatically for coverage at one (1) times annual base pay.
The Internal Revenue Service (IRS) considers the value of any life insurance over $50,000 to be a form of income called imputed income, and the employee must pay income taxes on this amount. If you want the maximum life insurance coverage available without paying imputed income taxes, employees can choose $50,000 in coverage. If an employee chooses $5,000 in coverage, he/she receives the difference between the Life Plans Credit and the life insurance cost as taxable income in their paycheck.
- Waiver of Premium: The employee may be eligible for a Life Insurance Waiver of Premium benefit if he/she is under age 60, insured under the Plan and disabled for at least nine months. If approved for waiver, he/she will not be responsible for any future premiums as long as he/she remains disabled, or until age 65 when the benefit ends, whichever is earlier.
- Accelerated Life Benefit: If the employee becomes terminally ill with 12 months or less to live, he/she may request early payment of up to 100 percent of the life insurance amount, up to a maximum of $1,000,000 in lieu of the death benefit.
- Portability: If the employee is no longer eligible for coverage, he/she and his/her dependents may be eligible to continue his/her in-force Employee and Family Term Life insurance. Premiums may be higher than those paid by active employees.
- Survivor Support and Financial Counseling: Survivor support and financial counseling services from PricewaterhouseCoopers are available for 12 months at no additional cost for beneficiaries receiving at least $25,000 in policy proceeds.
- Travel Assistance: Emergency travel assistance and travel information services are provided by Global Rescue.
Certain limits apply to these plans, including:
- Once coverage begins, any additional or increased coverage will begin coincident with the qualified status change, return from leave, or the next plan year depending on the date of the change, unless the employee is totally disabled. Any additional or increased coverage begins on the date the employee returns to active work after his/her total disability ends.
- The plans will not pay a benefit if the covered employee dies as a result of suicide within 24 months of the effective date of coverage or a change in coverage.
Do you know who would receive your life insurance or personal accident insurance benefit in the event of your death? Does the Human Resources Department know who that person is?
Be sure to name a beneficiary when you complete your enrollment online to make sure benefits are paid to the people you want to receive them.
- If the employee has not named a beneficiary, his/her life insurance will be distributed to his/her spouse.
- If no living spouse, the life insurance will be distributed to the employee's natural or legally adopted children.
- If no living children, the life insurance will be distributed to the employee's parents.
- If no living parents, the life insurance will be distributed to the employee's siblings.
- If no living siblings, the life insurance will be distributed to the employee's estate.
What would happen if your spouse or children were no longer in the picture?
The university offers life insurance for your spouse or domestic partner, and/or your children. If your family member dies while covered by one of these plans, the plan pays you a benefit.
How It Works
The employee pays the full cost of family life insurance with after-tax dollars through payroll deductions. Amounts for spouse/domestic partners are $5,000, $10,000, or $25,000. Children can be covered for $2,000, $5,000, or $10,000.
Any additional or increased family coverage elected begins on the date of the qualified status change or the next plan year if elected during annual enrollment unless the spouse, domestic partner, or dependent is hospitalized or confined. If the eligible spouse, domestic partner, or dependent child is hospitalized or confined due to illness or disease, coverage will begin on the date he/she is no longer hospitalized or confined.
Accelerated Life Benefit
If the covered family member is terminally ill and life expectancy is less than 12 months, employees may apply for up to 100% of their individual coverage one time as an Accelerated Life Benefit. The death benefit will be reduced by the Accelerated Life Benefit paid. If 100% of the covered family member's coverage is taken as an accelerated benefit, his/her coverage ends.
The employee is the beneficiary of this coverage. Survivor support and financial counseling services from PricewaterhouseCoopers LLC are available to you for 12 months at no additional cost.
Certain limitations apply to these plans including:
- If the employee elects "Waive Coverage" for family members at initial eligibility, the employee may increase this coverage by only one level during the next annual enrollment.
- Accordiong to state insurance law, coverage for your family members cannot exceed 50% of your employee life insurance. For example, if you shooce $5,000 in coverage for yourself, you can choose $2,000 for your children but you cannot cover your spouse or domestic patner.
- An employee cannot also be covered as a dependent.
- A dependent child cannot be covered by more than one employee in the plan.
- The plan will not pay a benefit if the covered family member dies as a result of suicide within 24 months of the effective date of coverage or a change in coverage.
- The cost of coverage for dependent children is the same no matter how many children are covered.
Accidents happen....are you covered?
Personal Accident Insurance provides you or your family with a benefit if a covered person dies as the result of an accident. This insurance also pays a partial benefit for the loss of a limb or eyesight as a result of an accident.
How it Works
Employees may select single coverage or family coverage for his/her eligible family members. If family coverage is selected, the employee is insured for the full amount of the family coverage option. The employee's spouse or domestic partner's coverage equals 50 percent of the coverage and each child's coverage equals 10 percent of the coverage.
If an employee elects the $100,000 employee and family option, the employee's coverage equals $100,000, the spouse's coverage equals $50,000, and each child has $10,000 in coverage.
Under family coverage, personal accident insurance also pays an education benefit if the employee dies. For each dependent currently in college or who enrolls as a full-time student at an accredited post secondary education institution within one (1) year of the employee's death, the plan will pay part of certain education costs for up to four (4) years. For the employee's spouse or domestic partner, the plan will pay for job training needed to earn a living. Job training expenses must be incurred within 30 months after the employee's death. The maximum benefit is $3,000.
Seat Belt and Airbag Coverage
The plan will pay an additional benefit in the event an insured dies as the result of a covered accident while properly wearing a seat belt. An additional accidental death benefit is also ayable if the employee was protected by an airbag.
You pay the full cost of this coverage with after-tax dollars. The cost of Personal Accident Insurance is $0.017 per $1,000 per month for employee only coverage and $0.025 per $1,000 per month for employee and family coverage.
Certain limitations apply to these plans including:
- The plans will not pay a benefit if the injury or death is the result of an act of war, declared or undeclared, suicide, or intentionally self-inflicted injury. Other exclusions and limitations also apply and are explained in the Personal Accident Policy.
Keep in Mind
- These plans pay benefits only in the event of an accident.
- The beneficiary under this coverage can be the same beneficiary the employee named for the employee life insurance. The employee is the beneficiary for any death benefit paid on a family member.
- Minnesota Life: Beneficiary Designations
- Before enrolling in this coverage, employees should review all of his/her life insurance coverage (both university-provided and individual) and, if considering family coverage, review any life insurance that their spouse/domestic partner or dependents may have.
The personal accident insurance plan also pays benefits for certain injuries resulting from an accident.
|Type of Loss Due to an Accident||Plan Coverage|
|Death||The full benefit|
|Both hands or both feet||The full benefit|
|One hand and one foot||The full benefit|
|Sight of both eyes||The full benefit|
|Sight of one eye or one limb||The full benefit|
|One hand||One half of the full benefit|
|One foot||One half of the full benefit|
|Sight of one eye||One half of the full benefit|