Employee Life Insurance pays a benefit to your beneficiary(ies) if you die while covered under the Plan. This coverage also includes a terminal illness benefit, which pays a portion of your coverage amount to you to help defray the expenses associated with your illness.
Back to TopThrough FlexSolutions, you may elect a coverage amount equal to...*
$50,000
50% of your annual base salary
1 times your annual base salary
2 times your annual base salary
3 times your annual base salary
4 times your annual base salary, or
5 times your annual base salary
... up to a maximum benefit of $1,000,000.
* See Enrollment Rules below for information pertaining to your election.
Coverage is rounded up to the next $1,000. For example, if your salary is $31,600 and you elect two times your salary, your coverage amount would be $64,000, not $63,200.
If your salary changes during the Plan Year, your coverage amount will automatically change accordingly; however, your FS Credits and the cost for the new coverage level will remain the same until the next Plan Year.
Annual base salary as it applies to Employee Life, Accidental Death & Dismemberment and Business Travel Accident insurance is defined as your annual earnings from A&B, not including bonuses, commissions, overtime pay, or any other form of extra compensation.
Back to TopIf you elect a coverage amount above $50,000, you will have "imputed income" for federal income tax purposes. This means that, according to IRS rules, the value of the coverage in excess of $50,000 provided by A&B (based on the FS Credits the Company provides) will be assigned a value based on the applicable IRS table. That value will be reported as "other compensation" on your W-2 Form and treated as taxable income.
For example: Let's assume you are 45 years old and the amount of life insurance coverage you have in excess of $50,000 is $100,000. According to the IRS table, an additional $15 per month ($180 annually) would be considered "other compensation" and therefore taxable.
If you have any questions regarding this provision, consult with a qualified tax advisor.
Back to TopEmployee Life Insurance is part of the "core" package of FlexSolutions benefits. This means that you must elect a minimum level of coverage, either...
$50,000, or
50% of your salary
... whichever is less.
If you do not enroll in FlexSolutions when you are first eligible to do so, and during each Open Enrollment thereafter, you will automatically receive the core coverage amount.
Back to TopUnder the Employee Life Insurance Plan, there are certain situations in which the Insurance Company requires "evidence of insurability" (proof of good health) before your elected coverage amount will take effect, as explained below.*
* The rules regarding evidence of insurability are subject to change in the event A&B changes insurance companies and/or renegotiates the contract. The rules outlined here are as of the date of this publication.
When you first enroll in FlexSolutions, you may elect any coverage amount up to $600,000 without submitting evidence of insurability. Any election amount above this level will require you to submit evidence of insurability.
Back to TopDuring Open Enrollment (or as a result of certain qualifying "changes in status") you may increase your life insurance coverage without submitting evidence of insurability. However, evidence of insurability is required if...
Such an increase would bring your coverage level to an amount in excess of $600,000; or
You choose to increase your coverage amount by more than one level—even if your new election is less than $600,000. For example, if you choose to increase your coverage amount from 1 times to 3 times your salary, you must submit evidence of insurability, even if 3 times your salary equals an amount less than $600,000.
If you make an election requiring evidence of insurability, you will receive a form from the Insurance Company. Be sure to complete this form and return it to the Insurance Company as directed. You may also be required to take a medical exam at your own expense before your coverage can be approved.
Until your higher coverage amount is approved, you will be covered at—and pay only for— the maximum coverage amount you would be eligible for without evidence of insurability.
Back to TopThe life insurance coverage you choose either when you initially enroll as a new hire or during the annual Open Enrollment will remain in effect throughout the Plan Year (January 1 through December 31), unless you have a qualifying "change in status" as defined by the IRS. These include...
Marriage, divorce, or legal separation
Birth or legal adoption of a child
Death of a spouse/domestic partner or child
A change in your or your spouse's/domestic partner's employment, resulting in a loss of coverage
A reduction or increase in the hours of employment
If you have a change in status and want to make a change in your benefit plans and/or coverage levels, you must notify your local Human Resources representative and complete the necessary form no later than 31 days after the qualifying event (e.g. marriage, birth, etc.). If you fail to notify Human Resources within 31 days, you will not be able to change your elections until the next Open Enrollment. Any benefits change you make must be directly related to the status change.
You may also update your beneficiary designations at any time.
Back to TopIn the event of your death, your beneficiary(ies) normally will receive a lump-sum benefit equal to the coverage amount in force at the time of your death. However, your beneficiary(ies) may elect another form of benefit payment, such as installment payments, according to the terms of the insurance contract.
Generally, the benefits paid to your beneficiary(ies) will not be taxable.
Back to TopIf you are not expected to live more than 12 months (as certified by a doctor), a terminal illness benefit may be payable. This benefit payment is intended to assist with the medical and related expenses incurred as a result of the illness, and which may not be covered by any other coverage you may have (such as medical coverage).
The maximum terminal illness benefit is 50% of the life insurance coverage amount, up to $150,000. The minimum benefit amount payable is $5,000.
This benefit payment is not taxable. However, any life insurance benefits payable in the future to your beneficiary(ies) will be reduced by the amount of terminal illness benefits paid.
For more details on the terminal illness benefit, see Claim Procedures.
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