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Life Plan Options
All plans are administered by Standard Insurance Company.
Basic Term Life and Accidental Death & Dismemberment (AD&D) Insurance Plan
CU Medicine provides an employer-paid Basic Term Life Insurance Plan which also includes an AD&D benefit in the same amount. The Basic Term Life plan pays a benefit to your beneficiary/ies if you die while covered under the policy. The AD&D provision provides a benefit of up to and in addition to the amount of the Basic Term Life if you die as a result of an accident. Benefits are payable to you, the covered member, for losses other than life, including loss of hand, foot, sight, speech, hearing, paralysis, or certain other losses caused by an accident. The policy has neither a cash value nor provisions for loans.
Eligible employees are automatically enrolled in a $50,000 basic term life and $50,000 AD&D insurance policy.
Optional Term Life and Accidental Death & Dismemberment (AD&D) Insurance Plan
CU Medicine provides eligible employees, spouse and dependents an opportunity to purchase additional life insurance through the Optional term Life and AD&D Insurance Plan. The policy has neither a cash value nor provisions for loans.
Employee paid premiums through monthly payroll deduction.
Rate Discount – available for non-tobacco users (no use of tobacco products within the past 12 months)
If you are enrolling in optional life insurance for yourself and/or your spouse/SGDP and are asking for more than the guaranteed issue (GI) amount, you are required to submit a medical history statement as proof of evidence of insurability (EOI).
Rate Discount
If you and/or your spouse/SGDP are non-tobacco users, meaning that you have not used tobacco products within the past 12 months, you are eligible for a discounted rate in the Optional Term Life/ AD&D Insurance Plan.
Voluntary Accidental Death and Dismemberment (AD&D) Insurance Plan
CU Medicine provides eligible employees, spouse/SGDPs and dependents an opportunity to purchase a separate and elective AD&D insurance plan. AD&D insurance provides a benefit in the event of an insured member's covered loss of life, hand, foot, sight, speech, hearing, paralysis, or certain other losses caused by an accident.
Employee-paid premiums through monthly payroll deduction.
Beneficiaries
Primary beneficiaries receive the benefit in the event of your death. If you name more than one primary beneficiary, you must indicate the percentage assigned to each and make sure the total in this category equals 100 percent.
Contingent beneficiaries receive the benefit only if your primary beneficiary/ies is deceased. If naming more than one contingent beneficiary/ies, please indicate the percentage assigned to each and make sure the total equals 100 percent.
For spouse and dependent Optional Life/AD&D and Voluntary AD&D coverage, the beneficiary is automatically you, the CU Medicine employee.
Imputed Income on Life Insurance
According to IRC regulations (IRC section 79), life insurance coverage in excess of $50,000 may be subject to federal taxes based on a graduated rate table provided by the IRS. The amount of life insurance coverage in excess of $50,000 is multiplied by a premium rate based on an employee's age at the end of the calendar year, which results in a monthly amount of imputed income.
This imputed income, reduced by the amount the employee paid toward the insurance, is taxable as a benefit and is, therefore, added to the employee's applicable wage base for federal income tax, Social Security tax, and Medicare tax purposes.
Imputed income will be calculated on the employee's life plans (basic and optional) and on their spouse's optional life insurance, as applicable. The $50,000 exclusion for employees does not apply to their spouse's optional life insurance.
Although the taxable portion of the group life insurance benefit is subject to federal income tax and is recorded on an employee's W-2 annually, CU Medicine is not required to withhold income tax from an employee's paycheck. CU Medicine is required to withhold Social Security and Medicare taxes on the life insurance benefit each month.
For most employees, this usually equates to a very small sum of money.
Termination of Coverage
If you are enrolled in one or more of the term life insurance plans and you lose eligibility, contact HR immediately for information on your rights for conversion or portability.